By now, we all know that leadership is tough, hard, exciting and demanding. But, at the same time, what most people learn the hard way is that it is not a short drive in the beautiful countryside. Instead, it is a long drive across the entire country that requires a look at the roadmap to avoid the roadblocks while understanding the routes and the detours along the way, long before the drive begins. When leaders decide to take this journey, decisions will have to be made that will determine whether success, or a lack of it will be realized once the journey has begun.
How are your leadership skills? Likely not as good as you think. There’s no shortage of independent empirical data generated over the years supporting the fact most people tend to overrate their leadership ability. The best leaders the world has ever known had room for improvement – so do you. I’ve always said leaders need to get over themselves and get on to the practice of leadership. In today’s post, I’ll offer 8 things every leader should evaluate with regard to their capabilities.
People arrive at a position of leadership in many different ways – some individuals openly and aggressively seek out positions of leadership, while leadership is thrust upon others. Whether leaders are elected, appointed, anointed, or self-proclaimed, and regardless of whether it’s by design or default, once in a position of leadership they all carry the burden and responsibilities associated with being a leader. The question is, do most leaders live up to their responsibilities?
Leader Beware – ignorant bliss, no matter how enjoyable, is still ignorant. If you’re in a position of leadership and don’t feel you have any blind spots, you’re either very naïve or very arrogant. All leaders have blind spots – the question is what are they doing about them? The reality is most leaders invest so much time assessing the cultural and functional dynamics of their organizations they often forget the importance of critically assessing themselves – big mistake.
It has consistently been my experience, leaders who are not growing are simply incapable of leading growing organizations. Moreover, leaders who fail to continue developing will always be replaced by those who do. A leader who fails to understand the value of self-awareness fails to understand their own true potential as a leader.
It’s at the C-suite level an executive must be on top of his/her game as they have the broadest sphere of influence, the largest ability to impact a business, and they also now have the most at risk. It is at this place the leader should make the heaviest investment in refining their leadership ability, because increased performance will pay the biggest dividends. Let me be as clear as I can – the more responsibility a leader has, the bigger their obligation to be on the forward edge of learning, growth and development.
Think about this – YOU are the single biggest threat to your role as a leader. This means YOU are also the single biggest risk to those whom you lead, your employees, your family, and to your friends. If you are in a position of leadership, you will lead – you will either lead people toward the right things or lead them astray, but you will lead.
The ancient Greek philosopher Socrates had a few guiding principles that today’s leaders would do well to adopt: Socrates said, “Know Thyself” and “An unexamined life is not worth living.” Those leaders who actively pursue gaining a better understanding of themselves will not only reduce their number of blind spots, but they’ll also find developing a sense of awareness is the key to increasing emotional intelligence. The better you know yourself the more effective you’ll be, and the better you’ll relate to others.
Following are 8 things I suggest you reflect upon should you desire to continue to develop as a leader:
- Never Stop Learning: I’ve never understood leaders who make heavy investments in personal and professional development early in their careers, who then go on to make only minimal investments in learning once they have reached the C-suite. Learning and development are lifelong endeavors. The learning journey doesn’t come to an end just because you reach a certain station in life – or at least it shouldn’t.
- Context Matters: Just as life is not static, neither is the environment you work in. Leadership isn’t a one-size-fits-all endeavor. The best leaders apply their craft contextually based upon the needs of those whom they serve. If you don’t know how to nuance your leadership skills you will simply miss opportunities others won’t.
- Be Kind: People go out of their way to help those whom they like. Likewise most people won’t lift a finger to help those they don’t care for. Smart leaders are purposed to build into those they lead. They understand leadership success is found by ensuring those they lead are better off for being led by them. Self-serving, arrogant, or belittling behavior may feed your ego, but it doesn’t serve your best interests as a leader.
- Surrender: A leader simply operates at their best when they understand their ability to influence is much more fruitful than their attempt to control. Here’s the thing – the purpose of leadership is not to shine the spotlight on yourself, but to unlock the potential of others so they can in turn shine the spotlight on countless more. Control is about power – not leadership. Surrender allows a leader to get out of their own way and focus on adding value to those they serve. Forget span of control and think span of influence.
- Begin the Process of Unlearning: Just as important as learning is shedding the emotional and intellectual baggage trapping you in the past. Human nature causes most of us to hold onto wrong, unhealthy, or outdated ideas, concepts, thoughts, feelings or practices. The fastest way to become a better leader is to challenge your own logic. If you’re really serious about finding the flaws in your thinking, ask others to help you identify gaps or faults, and then listen very carefully to what they share with you.
- Likeability Matters: While becoming a great leader shouldn’t be reduced to a popularity contest, the fact is most great leaders are both well liked and respected. They have the full faith and trust of their stakeholders, and possess strong positive relationships across constituencies. What do you reflect, and what do people see in you? If you are not well liked and respected then you will have consistent, self-imposed obstacles placed in your path that inhibit your ability to be an effective leader. Ask yourself this question – If an election for CEO were held today, would your stakeholders re-elect you in a landslide victory? If not, why not?
- Attract Don’t Repel: If people see you coming and quickly run the other way, you have a leadership problem. If people shy away from you versus clamor for your attention, you need to work on your leadership.The simple truth is people strongly desire to work with and for great leaders. Great CEOs are talent magnets…people want to be led by those who have much to offer. If you struggle with recruiting, team building, and leadership development your leadership skills are in need of improvement.
- Results: Great leaders produce great outcomes. If you have vision, strategy, talent, culture, or performance problems you have a leadership problem. Remember, businesses don’t fail – leaders do.
Becoming a better leader isn’t difficult, but it does take effort. It requires you to place humility above hubris, and to place a higher value on truth than you do on your ability to rationalize and justify your thinking. It means placing more emphasis on the right outcome than being right. I’d encourage you to view yourself as a lifelong student of leadership more than a master of leadership – it will serve you and those you lead well.
When it comes to leadership, I can share the issues of creating and delivering on expectations are no small matter. In fact, understanding how to come out on the right-side of the expectation curve can often be the difference between being viewed as an average leader and one held in high regard. Let me make this as simple as I can; managing expectations is gamesmanship – aligning them is leadership. Moving the goal posts by arbitrarily raising and lowering expectations creates confusion, and is often an intellectually dishonest exercise. Aligning expectations doesn’t need to be difficult – set them, align them, stick to them, and execute on them.
Conflicts, disagreements, disputes, and litigation are often born out of expectation gaps. The thing leaders need to keep in mind is expectations cut both ways. Keeping what you perceive as being your end of the bargain is only half of the equation, as what you think only matters if it’s in alignment with the understanding of the other party. We have all found ourselves in the unenviable position of assigning work product only to end-up with the deliverable falling far short of expectations, while having the producer of said work product thinking they exceeded all expectations. I’ve often said, those leaders who fail to clearly communicate their expectations have no right to them.
Nothing engenders confidence and creates a trust bond like delivering on promises made, and likewise, few things erode confidence and credibility like commitments not kept. Leaders who deliver on promises quickly rise to the top, and those that fail to develop this skill won’t survive long. The best leaders make a practice of saying what they mean, meaning what they say, and doing what they say they’ll do.
The science of aligning expectations is about systematically connecting what is said with what is done. The art of aligning expectations is about closing, or better yet, eliminating the expectation gap. Blend the art and science together and you have the framework for what is becoming the differentiating factor in performance based decisioning. Several years ago I created the Venn diagram depicted below to explain the confluence of factors that need to occur in order to close the expectation gap:
Expectations exist throughout the entire value chain, with every stakeholder needing and deserving to have their expectations understood and met (hopefully exceeded). Whether it is addressing customer expectations, board expectations, shareholder or analyst expectations, or the inverse situation of employees having to deal with the expectations of executives, it is the ability to excel at decisioning based upon setting, aligning and executing expectations that creates high performance organizations.
Promises made and consistently kept based upon solid reasoning and underlying business logic, will help to create a solid brand attracting loyal customers and talented employees. The following three practices will help create an organization that delivers on its commitments:
- Collaborate early and often: Decisioning in a vacuum, or without all the facts, will place you in a deficit from the beginning. It is at best extremely difficult to align expectations and deliver on commitments made if you don’t have clear visibility as to what is wanted or needed. Before making promises or commitments collaborate with all concerned parties to ensure that expectations are understood.
- Resist making verbal commitments: Most misunderstandings occur as a result of improper interpretation of oral communications. Most broken commitments result from impulsive verbal promises made before all the details were sorted out. Once you have gained clarity as to the perceived need to be fulfilled, place your understanding of the deliverables in writing by outlining key business points and circulate the document for review and comments. Where possible resist formalizing agreements, proposals, or other commitments until you have alignment on key expectations and deliverables.
- Treat promises like projects: Build a culture that breaks down all commitments into deliverables, benchmarks and deadlines. Allocate resources, budget and staff while delivering the commitment within a framework of measured accountability. Treating all commitments and promises as formal projects will help manage performance risk and will also create continuity of process and delivery.
Performance focused decisioning based upon principles of expectation alignment will lead to a certainty of execution that should translate into one of your company’s greatest competitive advantages. Top CEOs recognize that they can promise and deliver, under-promise and over-deliver, or even over-promise and deliver…they just don’t dare over-promise and under-deliver. Thoughts?
Is the customer really always right? How far should a company go to satisfy their clientele or customer base? What is the lost opportunity cost associated with customer churn? Is there a point when satisfying the customer is actually harmful to the enterprise, or back to the original question, is the customer always right? In today’s post I’ll share my opinion as to the validity of this old business axiom, and also offer a few insights on where to draw the line…
I believe all businesses should use great care and concern when determining how their customers and clients are treated. The time, energy, and cost associated with acquiring a customer are substantial, the benefits of retaining customers are considerable, and the costs associated with customer churn are significant. I’m always amazed at how much money will be spent to acquire a new customer, but how little care is given to insuring customer satisfaction after the sale. There is great truth in the old axiom that states: “if you’re not serving your customer well, someone else will.”
If as an executive you believe customer service is someone else’s problem, you have a much bigger problem than you realize. While I believe most CEOs have a grasp on the concept of lifecycle value, I’m not sure they really understand the true cost of losing a customer. Let’s just assume that the lifetime value of a customer for company X is $2,000 dollars. If company X loses just one customer, the total lifecycle loss could run well into the tens of thousands, if not the hundreds of thousands. If you don’t believe me consider the following 7 points:
- The Initial Churn: First you have the $2,000 dollar lifetime value loss attributed to churning the account itself.
- Sunk Acquisition Costs: Don’t forget to add in the cost of acquiring the account to begin with. You spent very real dollars to acquire the account so you need to factor that into the total equation. I’ll let you pick the percentage you want to use and add that into the total number.
- Replacement Costs: Remember the cost of acquisition number you just calculated above? Well, you need to add it back in again, because now you have to go out and replace the customer you just lost. By the way, you should probably multiply the cost of acquisition number by 5 since it costs about 500% more to acquire a new customer than retain an existing one.
- Lost Ancillary Revenue: On average, a single account is good for a 30 -40% cross-sell/up-sell revenue increase over time as new products, services, joint ventures etc. are brought on line and offered to existing accounts. This means you can conservatively expect to lose another $600 dollars of upside in our $2000 dollar example.
- Lost Referral Revenues: Depending on your business, and whether or not you have a solid customer acquisition process in place, a single account should be good for a minimum of 2-3 referrals (direct or indirect) on an annual basis. Over a 10 year period of time, assuming only 2 annual referrals, without any cross-sell or up-sell value being added-in, you just lost another $200,000 dollars.
- Loss of 2nd & 3rd generation referrals: But wait; it just gets worse….Those lost referrals mentioned above would have also given you 2-3 referrals each year, and if you carry this formula out over 20 years the loss of a single account could easily cost your organization more than a million dollars in lost revenue.
- Negative Brand Impact: If it isn’t bad enough already, a lost account can easily have a negative impact on future sales due to spreading the news of their bad experience with your company. The average dissatisfied customer will persuade 10-20 other people from doing business with your firm. If the upset customer takes their dissatisfaction online and amplifies it via social media you could see a much bigger problem. This will not only impact your revenue, but can also taint your brand equity.
The bottom line is that it is very expensive to lose an account. That said, I also believe there is a point where customers can begin to abuse the good will of the merchants and service providers who work so hard to earn their business. So, when does a customer cross over to the dark side and become your worst nightmare? The answer is a fairly simple one – when the squeaky wheel becomes so loud that the brain damage involved in greasing it becomes too high, if an account doesn’t deal in good faith, if they become unprofitable to keep, or when you can replace them with more profitable accounts.
Regrettably, experience has shown me that a small percentage of customers/clients live for the chance to wield their perceived power over their merchants, vendors, suppliers and professional service providers. These customers are the proverbial “squeaky wheels” that demand to be greased. These are the verbally abusive customers who expect special consideration, and whose demands can far exceed the boundaries of reason. There is in fact a point where “bad customers” can erode margins, negatively affect morale, or even tarnish a brand. These customers not only are not right, they deserved to be fired…
The following tips will help you minimize the amount of bad customers served by your enterprise and will show you what to do once a customer crosses over to the dark side:
- Align Expectations: Where possible, and especially if your business has the luxury of choosing your customers, make sure that mutual expectations are both defined and aligned at the outset of the relationship. Ensure your client understands what types of customer behaviors will be accepted and what types of behavior will not be tolerated.
- Develop Customer Scorecards: You should actually profile your clientele such that you understand the difference between good accounts and bad accounts. Much like you have performance reviews for your employees, you should also conduct an analysis of how your customers are performing. Not all accounts are accretive, and more accounts than you think may in fact be dilutive.
- Turnover Bad Accounts: When a client is identified as being a bad account either not capable of being saved nor worthy of salvaging, you should strongly consider firing the client. Evaluate the bottom tier of your clientele each year, and look to upgrade your clientele either by improving account performance or by releasing the client and replacing that business with a better quality account.
Those of you who have worked with me know that I state very clearly at the outset of any new relationship that I reserve the right to terminate an engagement if said engagement turns out to be less than a fruitful endeavor. While I feel privileged to serve my clients, and am thankful for the opportunity to earn their business, I also believe that the relationships should be reciprocal in nature. Business as they say is after all a two-way street…
While you might be lucky enough to survive in business with little or no advice from others, you will certainly not maximize your potential for success by doing so. All CEOs and entrepreneurs need advice in a wide variety of constantly changing areas…That said, I’m always somewhat perplexed as to why people hire certain professionals. The nature of my business is that I often succeed other advisors who have failed in their assignments, and I have witnessed first hand the carnage that can occur from unsuccessful engagements/implementations with third party professionals. So, in today’s post I’ll share some thoughts on both selecting and managing outside advisors…
Even though many of the CEOs and entrepreneurs reading this next sentence won’t agree with my conclusion, I am nonetheless obligated to share the reality of what is most often times the harsh truth…When you engage a professional advisor, the outcome you receive will most often times be the outcome you deserve. You see, as with any other profession there are excellent practitioners, middle of the road journeyman, well intended light-weights, and brilliant academics with no practical experience or common sense. The reality is that if you hire someone who doesn’t meet your needs, the fault rests with you.
Making things even more complex is the fact that talent, while clearly an important consideration, is only one factor in determining whether your engagement will have a successful outcome. A smart advisor doesn’t necessarily translate into a good advisor. Just because someone possesses an advanced degree doesn’t mean they have any practical experience. Most consultants don’t graduate from business school with any real world business experience. Furthermore, the real world experience they do possess may offer little benefit or applicational value to your specific circumstances. It is imperative that you select advisors who are not only a subject matter experts in their practice area, but that also possess solid business acumen and a bit of savvy. I have a very simple rule that I’ve followed for years in evaluating whether or not to hire a consultant: If an advisor is not fluent in my business, they won’t be retained by me to represent my business…end of story.
As nice of a thought as it might be, the reality is that you cannot just hire an advisor and expect all of your problems to be solved. As a C-level executive you should be bright enough to realize that if you turn the asylum over to the lunatics, chaos will certainly ensue. At the risk of enraging many in my profession, consultants and advisors are not superheroes, they are role players. Now mind you, the role can be of a complex or critical nature, but it is still just a part of the equation. The outcome of your engagement will be largely be dependant upon the following items:
- Problem Identification: You’d be surprised at how many executives retain professional advisors to either solve problems they can’t even define or articulate, or worse yet, to provide a solution to a problem or challenge that doesn’t even exist. If you don’t know what you’re trying to accomplish, how are you going to direct and manage an outside advisor. Moreover, how are you going to assess whether you are receiving great advice or flawed counsel? Don’t engage an advisor unless you know specifically what it is you are trying to accomplish.
- Selection: Did you hire the right advisor for the right reason? The first step in the selection process should not be based upon talent, price, availability, geography, past track record, etc. Rather it should be based upon value alignment. Do the consultants engaged share your values, understand your culture, understand your market, and understand your objectives? If not, their track record and their solutions will be meaningless. I can’t tell you how many times I’ve witnessed companies select advisors who were “high-powered” or “trendy, hip, and avant-garde” only to find their recommendations to be nothing short of a train wreck because they were not consistent with the values of the client they were supposed to be serving. Why would you ever let someone tinker with your brand, your credibility, and your business who didn’t share your values? Trust me when I tell you that if you do, you’ll regret it…
- Cost: Hire the best practitioner you can afford, not the cheapest you can find. As with any profession, there is value in experience and knowledge, as well as a competitive advantage to be gained with talent, reputation and connections. Never hesitate to get a second opinion as there are very few stock answers to any business issue.
- Accountability: The best way to manage your engagement risk is to be proactive not reactive. Assess your risks and take aggressive and proactive measures to mitigate said risks by being actively involved in the management of the engagement. As a principal owner or senior executive the buck stops with you. You need to manage the advisorand the process to the best possible outcome, and this cannot be accomplished with a passive management style. You can either manage the engagement process or let it manage you. Make sure the project deliverables are clearly understood, and that a plan with benchmarks, milestones and deadlines is put forth outlining how to reach said deliverables.
So how do you know if the advisor you’ve hired is as good as they say they are? Match-up their rhetoric with the following warning signs:
- Beware the Part-Time Expert: My father has an old saying that I’ve found to be very accurate over the years: “part-time efforts, yield part-time results.” If the person seeking your business has a day job that constitutes something other than the services he or she is pitching, run for the hills. If your potential advisor is moonlighting then they really have no business asking for your business.
- Beware of those with no Social Presence: If you want to get to know someone, do a little social snooping. If you don’t like how an advisor engages online, you probably won’t like what you see when you get face to face. If your would-be advisor cannot be found online, doesn’t blog, tweet, or is invisible on the major social networking platforms you might want to rethink their qualifications. Important Caveat: the mere existence of a website, blog, YouTube channel, LinkedIn profile, Facebook account, or a Twitter page doesn’t guarantee competence…anyone can amass thousands of followers on Twitter – those with a large following on Twitter often just follow-up to the Twitter maximum, wait for others to follow them back, delete the others and then repeat the process. Look for someone who has amassed a quality list of followers, who has more people following them than they follow, and who actively engages with their followers.
- Beware the Expert without Clients: No referenceable clients equals zero credibility. Your position should be one of “don’t tell me – show me.” It’s one thing to show you their own work, but quite another to show you demonstrated success on behalf of paying and satisfied clients. Equally as important, have they served clients similar to you? Have they served clients who have already been where you want to go? Don’t let someone cut their teeth on your business. Experience counts.
- Beware the Expert without Industry Recognition: Good advisors cannot remain in stealth mode. Talent can’t hide, because news of performance spreads. If your so called expert doesn’t have a professional body of work you may want to think twice. If your expert isn’t referenced as such by credible, independent third parties, isn’t published, doesn’t speak, lecture or teach, hasn’t received any industry recognition, etc., then they might not be a true expert.
- Beware the Expert too Aggressive in their Pursuit: There is a big difference between professional follow-up and desperation. Let me be blunt…most professionals at the top of their game haven’t made a cold call in years. In fact, even in this down economy they typically have more business than they know what to do with. If your world-beater of a consultant is chasing you down like a hungry dog after the meat wagon then you may want to take pause.
- Beware of Bargain Basement Expertise: In most cases the reality is that you get what you pay for…True expertise doesn’t come cheaply, but is well worth the investment. Few things in business will get you in as much trouble as not getting advice and counsel when needed, or worse yet, getting poor quality or incorrect advice. I would much rather pay an expert a larger fee for 30 minutes of their time and get what I need rather than pay someone $50 dollars an hour who is hoping to fake it until they can make it…Questionable advisors will take much longer to get from point a to point b (if they get there at all), and will likely cost you more money at the end of the day when contrasted with true professionals.
As a consumer of professional services, the phrase “Caveat Emptor” (Let the buyer beware) applies in spades. If you take an informed and proactive approach to managing your engagement risk you will fare better than those who don’t. A plus might just be that if you hire the right advisor for the right reasons, you may in fact end-up developing a strong personal and professional relationship that won’t end-up as subject matter for another horror story or consulting joke.
I have read some interesting articles and blog posts of late on the subject of CEO term limits, and felt this topic worthy of discussion. You should know from the outset that I fundamentally disagree with the concept of CEO term limits, and quite frankly I cannot really come up with a valid reason for supporting such a regressive concept. Any such argument in my opinion is rooted either in flawed business logic or politically correct rhetoric (usually one in the same). I would encourage you to read my arguments in opposition to CEO term limits, as well as to think through the ramifications on the corporate landscape if such thinking were to ever take hold…
Okay sure, the topic of CEO term limits makes for a nice sound bite given some of the C-suite debacles that have laundered the front pages of the media in recent times. However it is my opinion that rogue CEOs are the exception and not the rule. Why would we want to institute yet another bureaucratically mandated, one size fits all solution that addresses the symptom and not the problem? My basic feeling on the topic of CEO Term Limits can be summed-up with this quote:
“There exists a season for all things, but decisive, prudent & principled leadership never goes out of season.” ~Mike Myatt, 2003
With the average CEO tenure hovering at an all time low, who needs CEO Term Limits anyway? Why would you ever want the person in charge of corporate leadership, vision and strategy to be a lame duck right from the get go? Furthermore, last time I checked a CEO can always be removed for lack of performance, or moral and ethical indiscretions, so what purpose do CEO term limits serve other than to disincentivize the CEO?
The basic flaw in most arguments in support of CEO term limits stems from a belief that tenure is somehow a very relevant metric, and that there is some mystical optimum time to serve. WRONG…The simple truth of the matter is that the time needed to attain performance goals varies depending among other things the age, size and competitive positioning of the company, the industry, sector and vertical, etc. Stating that a CEO of a start-up should operate with the same term limit constraints of a CEO of a Fortune 500 company is very unrealistic and dangerous thinking.
Great CEOs possess the ability to refine their thinking and leadership skills to reflect the evolving needs of the enterprise and the changing global business climate. CEOs that cannot operate fluidly and contextually won’t be effective whether they hold the job for 12 minutes or 12 years. Chronological tenure is not the issue…business savvy, leadership ability, and the ability to provide a certainty of execution should constitute the metrics surrounding CEO performance evaluation.
An additional argument in support for CEO term limits is based upon the premise that the price of CEO terms that last too long goes deeper than the obvious performance metrics…that there is somehow the missed opportunity of a different vision, never heard and never realized. This line of thinking assumes that a CEO is operating statically within a vacuum. Great CEOs are the glue that provides continuity between vision and strategy. Great CEOs provide inspiration and leadership, as well as offer a steady hand at the wheel. They also seek the advice and counsel of their board and executive team in addition to a plethora of outside advisers. Great CEOs adapt, improvise and overcome…they are not static eunuchs operating inside a bubble.
The issue has never been, nor should it ever become, how long a chief executive remains in the position based solely or arbitrarily on the issue of tenure. Rather the issue should be based on something as simple as the following question: does the CEO deserve to keep their job based upon performance? If you want to drive CEO performance, start by hiring the right person for the job. Then follow-up your great hiring decision by providing the CEO with the tools and resources necessary to get the job done. Compensate the CEO for performance, and hold him or her accountable for a lack thereof…its just that simple.
If you have the wrong CEO replace him or her…If your board of directors is asleep at the wheel and does not hold the CEO accountable shame on them, but CEO term limits…why? The simple truth of the matter is that corporate impatience driven by the short-term mentality of Wall St. is most often times incongruous with the long-term best interests of shareholders. My recommendation is not to hand-cuff or bridle your CEO, rather give the CEO room to lead, maneuver, innovate and succeed. But hey, what do I know?
I’d love your thoughts on this subject – Do you think leadership has a shelf-life? If so why? If not why not? Sound off in the comments below…
Entrepreneur, CEO or Both? Which hat, or hats do you wear? CEO…that title sounds good doesn’t it? Okay, so you founded the company, but does that mean you should also be the chief executive? Did you bestow the title upon yourself simply because you had the authority to do so, or are you the right person for the job? Perhaps you were the right person for the job initially, but has the company outgrown your management ability? As the founder, can you, or should you, attempt to grow with the company? What does a CEO really do anyway? In today’s post I’ll assess what it takes to be an effective CEO and you can decide for yourself if you have what it takes to get the job done.
Sure, it’s your business, your idea, your net worth at risk and certainly nobody else will work as hard as you will, but is this really the right way to evaluate who should be the chief executive? In most cases the answer is no it’s not…however this is often times exactly how the decision is made. While entrepreneurs are clearly talented innovators and visionaries, most first time entrepreneurs don’t have prior experience as a CEO.
Over the years I have come across many self-appointed CEOs that struggle with leadership, team-building, creating a healthy culture, reading a balance sheet, understanding capital formation or financial engineering, have poor communication skills, have never built a sales force, authored a business plan, or lack any number of other requisite operational abilities. I’m not suggesting that all entrepreneurs are incapable of being chief executives, but I am suggesting that you stop and make an honest assessment of whether you are doing the job because you’re the most qualified, or just because you don’t know what you don’t know…
Before I start breaking this down, let me disclaim that a post of this nature works off generalizations and stereotypes, and that there are clearly exceptions to every rule. I have known many entrepreneurs that are exceptional CEO’s, but I have known many more that don’t measure-up and shouldn’t be fulfilling the role of CEO. I’m not making any judgments or pointing any fingers, but readers of this post will know which camp they fall into.
It is the nature of the beast that most entrepreneurs are a disruptive force within a company. A VC friend of mine refers to most entrepreneurs as practicing “seagull management” in that they fly in, flap their wings, crap all over everything and fly back out again…Many entrepreneurs desire to have input on everything, yet don’t want anything to do with the details. They often don’t possess the skill sets to add value to the initiatives they want to control. This type of behavior is proof certain that the entrepreneur is not being effective at leading, team building, delegation, leveraging process and a variety of other highest and best use activities for CEOs.
Let’s begin by determining what it is that a CEO does…First and foremost it is the CEO’s job to provide consistent leadership by insuring that the corporate values are reflected in a clearly articulated vision which in turn translates into a well defined strategy. Priority number two is team building and talent management. One of the main keys to generating organizational leverage is for chief executives to know when, where and why to deploy (or redeploy) talent and resources. It has been my experience that it is much easier to recruit talent or acquire resources than it is to properly deploy talent and allocate resources.
Jack Welch the former head of GE built a reputation as one of the great chief executives of this era. When asked how he transformed a lack-luster, institutional, global corporate giant into a dynamic culture focused on innovation and growth, Welch responded by saying; “My job is to put the best people on the biggest opportunities and the best allocation of dollars in the right places. That’s about it. Transfer ideas and allocate resources and get out of the way.” Welch clearly not only understood the concept of organizational leverage through proper deployment of talent and resources He mastered it.
I’ve heard it said that the role of a leader is to create and manage good followers. While there is an element of truth in that statement if this is what you aspire to as a leader it constitutes a complete under-utilization of leadership responsibility. I believe great leaders will mentor and coach subordinates for the purpose of identifying and developing other great leaders.
To achieve maximum success I believe it is incumbent upon an entrepreneur to take an honest inventory of his/her skill sets and competencies, and contrast them with the needs of the enterprise as it relates to what is required to efficiently and effectively lead the company forward. If your skill sets are best suited for business development, product development, branding, finance or other areas you may want to consider playing to your strengths by taking a senior position in the area of your subject matter expertise and hiring the best chief executive you can find to lead the company.
Surrendering the chief executive role doesn’t mean that you must give-up financial control or lose the ability to have input on decisioning, but it does mean that you’ll have to trust in, collaborate with, and delegate to someone who has the necessary domain expertise to get the job done.
At the end of the day, the choice of who occupies the chief executive role is yours to make…choose wisely. As always, I’m interested in your thoughts…please share your insights and experiences in the comments section below.
All great leaders have one thing in common: They read voraciously. Did you know that the average American only reads one book a year? Worse than this is the fact that 60% of average Americans only get through the first chapter. Contrast this with the fact that CEOs of Fortune 500 companies read an average of four to five books a month. Even more impressive is that some of the most successful leaders throughout history were known to read one book every single day. Bottom line…If you’re a leader and not an avid reader, you’re wrong. In today’s post I’ll share my thoughts on the value of reading…
If the statistics in the opening paragraph didn’t convince you of the power of reading, here are a few more telling observations for your consideration – according to our surveys at N2growth, a very large common denominator shared by executives who feel that they are not achieving the level of success they feel capable of, is that many of them are “too busy to keep up with their reading.” Hmmm…. Furthermore, studies show that active readers are likely to have annual incomes more than 5 times greater than those who spend little or no time reading. Do I have your attention yet?
Up until a few years ago Rick Warren read a book every single day. Abraham Lincoln who only had one year of formal education credited his appetite for reading with his success. Teddy Roosevelt was rumored to actually read two books a day. Thomas Jefferson had one of the most exhaustive personal libraries of his time prior to donating it to the Library of Congress (which many joked Roosevelt had read). The moral of my story continues to be that in order to be a great leader, you absolutely must be a great reader.
As an advisor to CEOs, there is little doubt that I’m passionate about personal and professional development, and there is one simple reason why – it works. Great leaders are like a sponge when it comes to the acquisition of knowledge, the development of new skill sets, and the constant refinement of existing competencies. To the person, the best leaders I know are prolific readers. The most successful people I know consume written content at a pace that far exceeds that of the average person. My message today is a simple one – if you want to improve your station in life, as well as the lives around you – read more.
While there are certainly numerous ways to learn (observation, experience, classroom instruction, relational interactions, etc.), I am a huge fan of the benefits of professional development gained from good old-fashioned reading. Someone once said “you are what you read” and while I think there is far more to the equation of our individual make-up than our choice of reading material, the statistics mentioned above prove there is also an element of truth contained in the aforementioned quote.
If I told you how much time I spend reading and researching you probably wouldn’t believe me, but suffice it to say, I am a voracious reader. I will often read a book in one sitting, have more than a dozen books presently underway on my Kindle, subscribe to online clipping services, use RSS feeds to scour news groups & forums, I devour social content on blogs, podcasts, Twitter, Facebook, various iPhone apps, etc., and this is in addition to reading a variety of industry publications and periodicals.
With what I’ve noted thus far I’m always amazed at the number of executives who don’t keep up with their professional reading. To be blunt, I have little patience for those leaders who are “too busy” or “too smart” or “too important” to learn. Put simply, if you’re not learning you have no business leading. How can you possibly be expected to grow an organization if you’re not growing yourself? How can you accept the responsibility to develop a team if you’re not developing yourself?
The greatest leaders throughout history have been nothing short of relentless in their pursuit of knowledge. If you are anything less then you are not only cheating yourself, but you’re also cheating your organization. I believe Michelangelo said it best when he uttered the words “Ancora Imparo” which when translated from the Italian means “I am still learning.” By the way, his first public use of this phrase was noted to have been on his 87th Birthday. I don’t know about you, but I’m still learning. Moreover, the day I stop reading, the day I stop learning – that’s the day I stop leading and likely the day I stop breathing.
Let me be clear that when I speak of acquiring knowledge, I’m not promoting intellectual elitism, rather I’m espousing the benefits that are derived by those who have a true and sincere passion for learning…there is a difference. Intellectual elitists are by-in-large braggarts that acquire knowledge (or feign possession thereof) for public acclaim and their own self-promotion. Learning serves little purpose for leaders if it is not actionable. If you acquire knowledge, yet choose not to use it for the benefit of others then you’re not a leader, you’re self indulgent.
In concurrence with Michelangelo’s quote above, I have never been a believer in the adage “you can’t teach an old dog new tricks.” In fact quite to the contrary, I believe anyone (yes I mean anyone) can change/learn/grow/develop given one prerequisite; the desire to do so. When it comes to topic of learning, it has been my experience that there are generally three types of people: those who constantly seek to acquire knowledge, those who think they already know it all, and those who just don’t care. What distinguishes members of one group from another rarely has anything to do with intellect, wealth, social pedigree, career standing, or other like pursuits…It has everything to do with desire.
Reading should not be something that is done when you’re bored, or have nothing better to do, rather it needs to be incorporated into your daily regimen. I have personally worked with literally hundreds of C-suite executives and without question the most successful professionals are those that constantly seek out learning opportunities and who are voracious readers. They realize the importance of learning and make reading a priority. Think of the business leaders that have had the biggest positive impact in your life, and I’m sure you’ll find that these individuals were in constant search of new and better information. They use the information acquired through reading in order to inspire, motivate, and lead those around them.
The question is not if you should be reading, but rather what should you be reading? With the plethora of reading material on the market today it is not a simple thing to make sure that you’re covering all the bases in a time efficient fashion. Therefore the following tips were designed to help you get the most out of your reading while maintaining efficiency in your reading efforts:
Books: My first piece of advice is that if you don’t own a Kindle or other e-reader, go get one. It’s much easier to have your reading material in one completely portable, digitally organized reader than it is to go old school and tote your books and magazines with you.
Periodicals, Trade Publications and Industry Journals: Again, not being able to address the specific needs of each reader, you must make your own choices here as well. However being aware of industry trends, competitive positioning, who the thought leaders are, etc. are all critical to your success. Pick the top couple of publications in your industry, sector, vertical or micro-vertical and pour-over the content looking for opportunities to exploit. Most print publications now also have Internet versions, Kindle editions, or digital newsletters that can be subscribed to as well.
Digital Media: If you’re reading this post then you probably understand the value of blogs, but don’t ignore, other forms of social content like Twitter, Facebook, Linkedin Groups, Forums, and News Portals. Don’t forget information that can be gleaned from services like Google Alerts and other online clipping services and aggregators. What I particularly like about this genre is that it is often “real time” information as opposed to other mediums that have a built in latency factor. Another benefit is that much of the content produced in this medium is not from the typical industry pundits, but rather true “in the trenches” thought leaders that see things coming long before journalists report it in the news, or the so-called gurus publish it in their latest book. This medium has been my preferred reading choice for a number of years now because it is extremely productive and time effective. I subscribe to these venues because I’m able to be “pushed” content that I’ve asked for in a medium that I enjoy. If you are not a heavy consumer of online information you are truly missing the boat.
Whether young or old, experienced or inexperienced, the best way to approach personal and professional development is to always stay in the learning zone. When you think you have all the answers is when you are headed straight for the proverbial brick wall. That said, most things in life happen as a result of choices we make…It is clearly within your grasp to make the choice to gain an understanding of what it is that you don’t know, and determine how you want to deal with that situation. My recommendation is simple, if you want to increase you income, your impact or your influence, then I would suggest you increase your reading.
If you have any additional tips, or want to recommend any great books, please share your thoughts and ideas in the comments section below. Here’s an idea – just like the popular use of “what’s on your iPod” to share what music people are listening to, how about sharing what’s on your Kindle?
Success is not random…CEOs need to realize that neither their success, nor their failure is a random act. CEOs also can rarely lay blame for their victories and losses on anyone other than themselves. Top CEOs have a knack for consistently exhibiting the right combination of skill sets, competencies, leadership aptitude, and decisioning ability. Failed CEOs simply do not. Having success as a CEO is little more than a matter of understanding where and when to apply leverage to highest and best use activities. In today’s post we’re going back to “CEO 101″ to get a bit of a refresher course on things you should already know, but that you most probably fail to apply correctly on a day-to-day basis…
So, what does it take to become a top CEO? Much more than it did even 5 years ago to be sure. The rapidly changing global landscape, and the evolving complexity of business, makes the job of CEO something that is only well suited for a rare few. For these reasons sustainable success at the C-suite level has become a very elusive thing. With the average tenure of a CEO being less than 4 years, it is critical for executives to understand what it takes to beat the odds. In the review that follows, I’ll examine the characteristics necessary to both achieve and sustain success as a CEO…
The job of CEO is all about managing expectations. Put simply, a CEO’s shelf life will be equal to their ability to align values, vision, and passion with execution. A CEO must be able to focus on deploying the necessary resources, at the right time, to achieve to desired results. By exhibiting strong leadership skills, top CEOs manage talent, performance, change, innovation, influence, rapport, and messaging to consistently drive an enterprise forward regardless of circumstances. If you want to insure longevity as a CEO, work towards developing a high degree of competency in the following areas:
Integrity: Always do the right thing regardless of peer pressure and/or public sentiment, and above all, never compromise your core values. If you cannot build trust and engender confidence with your stakeholders you cannot succeed. No amount of talent can overcome illegal, immoral, or otherwise ill-advised actions. A leader void of integrity will not survive over the long-haul. (see “Character Matters“)
Excellent Decision Making Skills: As a CEO you will live or die by the quality of the decisions you make. When you’re the CEO good decisioning is expected, poor decisioning won’t be tolerated and great decisioning will set you apart from the masses. (see “Executive Decisioning“)
Ability to Focus: If you cannot focus you cannot perform at the level necessary to remain in the C-suite for very long. The ability to do nothing more than understand and lock-onto priorities will place you in the top 10% of all executives. (see “The Power of Focus“)
Leveraging Experience: Inexperience, a lack of maturity, needing to be the center of attention, not recognizing limitations, a lack of judgment, an inferior knowledge base or any number of other common mistakes made by rookie CEOs can cause your house of cards to fall. If you don’t have the experience personally, hire it, contract it, but by all means acquire it. Great CEOs surround themselves with tier-one talent and the best advisers money can buy. They don’t make uniformed or ill-advised decisions in a vacuum. (see “Young CEOs“)
Command Presence: Great CEOs possess a strong presence and bearing. They are unflappable individuals that never let you see them sweat (unless of course it serves a purpose). Everything from how they carry themselves to how they speak and dress messages that they are in charge. (see “Never Let Them See You Sweat“)
Embracing Change: Great CEOs have a strong bias to action. They don’t rest upon past accomplishments and are always seeking to improve through change and innovation. In today’s fast paced and competitive environment those CEOs who don’t openly embrace change will often be shown the door prior to the expiration of their initial employment contract. (see “Catalyzing Change“)
Brand Champions: Great CEOs understand branding at every level. They seek to build not only a dominant corporate brand, but also a strong personal brand. CEOs that are not well branded on a personal basis or who let their corporate brand fall into decline will not survive. (see “Branding Demystified“)
Boundless Energy: Great CEOs have a boundless amount of energy. They are positive in their outlook, and their attitude is contagious. A low energy CEO is not motivating, convincing, or credible. (Since I don’t yet have a dedicated post on this topic, I guess I’ll need to expand my thinking in the days ahead…)
Business Acumen: Great CEOs have a deep understanding of the business and a strong orientation toward profit. Great CEOs possess what often appears to be a sixth sense or an almost instinctive feel for what the company needs to do to make money and remain competitive. (see “Leadership DNA“)
People Acumen: Great CEOs have a nose for talent…They understand how to recruit, develop and deploy talent focusing on applying the best talent to the best opportunities. They also know when it’s time to make changes and cut losses as needed. (see “Employee Engagement“)
Organizational Acumen: Great CEOs know how to engendering trust, when and how to share information, and are expert listeners. They develop strong and positive corporate cultures driven to performance by aligned motivations. They can quickly diagnose whether the organization is performing at full potential, delivering on commitments, and whether the company is changing and growing versus just operating. (see “Making The Most of Talent“)
Curiosity: Great CEOs possess a powerful motivation to increase their knowledge base and to convert their learning into actionable initiatives. They question, challenge, confront, and are never accepting of the status quo. (see “The Downside of Best Practices“)
Intellectual Capacity: Great CEOs are also great thinkers both at the strategic and tactical levels. They are quick on their feet and know how to get to the root of an issue faster than anyone else. I’ve never met a great CEO who wasn’t extremely discerning. (see “Critical Thinking“)
Global Mindset: Regardless of the geographical boundaries of the current business model great CEOs think globally. Limited thinking results in limited results. Whether global thinking is applied to capital formation, supply-chain issues, business development, strategic partnering, distribution or any number of other areas those CEOs who don’t grasp the importance of thinking globally will not endure. Great CEOs are externally oriented, hungry for knowledge of the world and adept at connecting developments and spotting patterns. (see “The Impact of Globalization“)
Never Quit: Great CEOs refuse to lose…They have an insatiable appetite for accomplishment and results and while they may reengineer or change direction they will never lose sight of the end game. (see “Play To Win“)
CEOs are in a state of crisis. As an adviser to CEOs, I can tell you that chief executives are under siege on all fronts…This is clearly a defining time for CEOs as an occupational class. To be clear, I’m not using the term “crisis” as it relates to dealing with the difficulties and challenges associated with navigating a recession, rather I’m talking about CEOs being able to successfully manage the intensity of negative public opinion. In today’s post I’ll share why I believe most CEOs are unfairly being vilified.
Will the actions of a few bad CEOs take down the reputations of all, or is the American public smart enough to see through the blame game currently being played by the media and the politicians? Look, I understand that Americans are upset about the economic debacle we find ourselves presently entangled in. I’m upset and outraged as well. Nobody could listen to the stories of CEO abuse that have circulated in the media of late and not have the hair stand-up on the back of their neck. That being said, not all CEOs are bad guys…in fact I’ll go so far as to say rogue CEOs are the exception and not the rule.
So, are CEOs getting a bad rap? In a word, yes. We’ve entered the blame zone of rash allegations and finger pointing in order to deflect responsibility. While I understand that no sane person could have watched the events of the last few month’s and not want to pin the blame on someone, simply assigning “villain” status to chief executives as a class because their compensation plans seem egregious to some is not the answer.
So, is CEO compensation out of control? In some cases I absolutely believe it is, but not in every case as many politicians and pundits would have you believe. I take great exception to those chief executives that take advantage of the position they hold, the shareholders they represent, and the relationships they’re entrusted with. That being said, the CEOs described in the preceding sentence don’t constitute the majority of chief executives.
I have called for transparency in previously addressing the issue of Rogue CEOs and Board Accountability. I can tell you from first hand experience that most chief executives are hard working professionals who take their fiduciary obligations very seriously. Moreover they hold the position of chief executive while incurring great personal risk and sacrifice. All one has to do is watch a CEO testify on Capitol Hill to know that the buck does eventually come to rest with the chief executive. I would be remiss if I didn’t take this opportunity to chasten the shameless politicians who use national tragedy and congressional testimony as a publicity platform to air venomous soundbites in order to transfer blame and placate their constituencies, but I digress…
At face value, I don’t care how much money a CEO does or doesn’t make. The issue is not the amount of remuneration paid out to CEOs, but rather on what basis, and when it is paid out. Simply put, CEOs that perform deserve all the compensatory benefits that accompany said performance, and to compensate them for the risk they undertake in the execution of their duties. Conversely, those CEOs who fail to perform have no business maximizing compensation to the detriment of the stakeholders they were supposed to be serving. I have no troube with a CEO using a corporate jet to conduct business that is in the best interests of shareholders. It is the CEO who abuses shareholder trust by using the corporate jet for personal gain or frivolous activities that has crossed the line. Again, keep in mind that most CEOs have never even seen the inside of a private jet…
Sure some CEOs are idiots, but so are a certain percentage of people in any occupational class. No doubt CEOs will need to work overtime in order to rebuild trust and credibility with the public…Their actions must match their words, and they need to demonstrate an understanding that holding the title of chief executive is a priviledge, not a right. All of this said, what is perhaps most important for the American public to realize is the true peril that lies ahead if we over-react and neuter CEOs such that they become nothing more than powerless figureheads. Oversight is a good thing, but where were these concerned politicians leading up to this current mess.
Bottom line…it is not wrong to assign some blame to the rogue CEOs who deserve it, but it is terribly wrong to assign blame to those good chief executives just because CEO is printed on their business card.
I’m often asked how to tangibly measure personal brand equity and my answer is quite simple…The value of a personal brand is directly proportionate to its ability to create and wield influence. When it comes to the subject of personal branding much has been written about authenticity, transparency, marketability, thought leadership, etc., but it is the ability to leverage the sum of these individual brand components for influence that determines the true strength of a personal brand. Put simply, a personal brand that cannot open doors, or influence actions and decisions, is not much of a personal brand.
When I refer to influence I’m not talking about manipulation, cheap marketing gimmicks, or other forms of skulduggery, as ill-gotten gains will always be exposed for what they are, and will never be worth the compromises that were made in order to achieve them. Not only is true influence much easier to acquire, but it is also sustainable. Put simply, true influence is nothing more than leveraging your personal brand to work with and through others to achieve a stated objective while staying true to your core values and maintaining your integrity.
The following concepts comprise the three pillars of influence, which if properly understood and implemented can help anyone become more efficient, productive, secure and successful:
1. Influence is built upon making others successful: This is often times referred to as the law of reciprocity. The theory is that if you invest yourself in making someone else successful then they in turn will likely be predisposed to helping you become successful. While this principle will not always pan out, in my experience it has held true in well over 90% of my interactions over the years. Those who make astute investments into people and relationships will benefit tremendously by doing so.
2. Likability: People do business with people they like and avoid doing business with people they don’t like it’s just that simple. Are you approachable, positive, affable, trustworthy, a person of character and integrity or are you someone who is standoffish, pessimistic and generally not to be trusted? Those the fall into the camp of the former as opposed to the latter will find themselves having more influence and success.
3. Value and scarcity drive influence: Understanding the value of your position, brand, authority, resources, access to people or knowledge and any number of other items as it relates to fulfilling the needs and desires of others creates influence. To the extent that anything under your direct or indirect control is scarce or proprietary your ability to influence will increase significantly.
Bottom line Don’t manipulate for personal gain, rather facilitate for mutual benefit. Take a sincere interest in the success of others, work on your likability factor, have access to things of value or scarcity, and as your influence with others increases so will the value of your personal brand. Lastly, I would ask that you consider using your influence to assist those who have little influence. If you don’t incorporate this last thought into your world, you’ll be missing one of the greatest rewards life has to offer…serving via influence.
Character Matters…if our society can take anything away from watching the ridiculous nature of the public debacles that seem to occur on a daily basis, it should be that Character Matters. Character; that oft discussed leadership trait that seems to be inexorably tied to sustainable success…while much has been written about the importance of character, there is surprisingly little information in circulation which actually defines it. The word “character” surfaces in most every article, blog post, speech, book, or even casual reference to the topic of leadership so surely it must be easy to define…In today’s post I’ll take a crack at defining a word which is often used, and in my opinion often misunderstood…
Some would say that character needs no formal definition and is a principle that should be universally understood by all, with anyone lacking understanding of the concept to be a person of bad character. Wouldn’t it be nice if that was so? While this line of thinking makes for a good sound bite, it hints at a rather myopic and naive view of the world. You see, much of how one defines character (good or bad) begins with their view of the world as guided by their moral compass.
One of my favorite sayings is that “you measure a person’s character by how they act when no one is watching, and by the choices they make when they believe no one will ever know.” Regrettably, many people choose to live in two worlds…their public world, and their private world. The people who walk this fine line between the ever increasing conflicts posed by the duality of their principles are destined to suffer as a result.
The class of people mentioned above also tend to subscribe to the theory of moral relativism. They believe anything that can be justified or rationalized by the need at hand, or worse yet, manipulated for a desired outcome, constitutes right thinking (some would call this subjective reasoning). These subjective thinkers are the masters of spin, who while often appearing to do things right, often fail to do the right thing. People that fall into this camp frequently exhibit an inconsistency in their reasoning and/or positioning. While they would describe themselves as flexible, fluid, and open-minded, my take is that their character lacks integrity and can be easily influenced. When a person allows popular opinion, or situational characteristics to either define or supersede their principles, then I suggest their character is flawed. Simply put, my contention would be that if you subscribe to subjective reasoning and you serve as your own moral compass, your character will only be as good or bad as your thinking at that time.
In contrast, others utilize a form of objective reasoning that is guided by a higher authority (law, religion, or some other third party code) which provides a consistent set of governing principals or ideas. My belief is that objective reasoning will lead to a consistency of character and a predictable pattern of behavior (also reflected in both good and bad character, as well as the higher authority being subscribed to). People who subscribe to this line of reasoning may often choose to ignore doing things right in favor of doing the right thing. While they may be labeled as hard-headed, inflexible, extreme or even as zealots, you know where you stand with objective thinkers. My belief is that an unyielding commitment to principled behavior will serve you better than a subjective, ad-hoc approach eleven times out of ten.
It was Ralph Waldo Emerson who said, “Character is higher than intellect.” I could not agree more with Emerson as virtually anyone can develop their intellect, but it is the rare person who can retain their character. Emerson clearly understood the law of scarcity in placing more value on character. The most successful business leaders of our time have built their personal brand by consistently exhibiting strong character regardless of the situation at hand. They let right thinking, right decisioning and right acting serve as their guide. If you have to manipulate the truth or compromise your values to gain an advantage, the advantage is not worth the perceived gain for any advantage gained in deceit will surely come at a very high cost the sacrifice of your character.