May, 21

WHAT DOES IT MEANS TO BE A GREAT LEADER AND, ABOVE ALL, A GOOD CEO?

As a great leader, you have to master some challenges, which typically make or brake leaders.

As a board and business advisor, I often talk to business professionals, non-executive member, shareholders and owners who are critical of their CEO’s and who are convinced that they could do a better job.

Yet I suspect that few of you have seriously thought about the scope of problems that every CEO must face, and what capabilities the key to success are, whether your company is a small startup or a multibillion multi-national corporation.

Running a large global company is an exceedingly complex job. The scope of the organization’s managerial work is vast, encompassing functional agendas, business unit agendas, multiple organizational levels, and numerous external issues. It also involves a wide range of constituencies—shareholders, customers, employees, the board, the media, government, community organizations, and more. Unlike any other executive, the CEO has to engage with them all. On top of that, the CEO must be the internal and external face of the organization through good times and bad.

Sure, I have my own views on what it takes to be an effective leader at the top, from my many years experience as an executive and non-executive in large companies as well as in small companies. Of course, my view is also enriched not only out of real-life experience, but also related to many books or further education I participated in the last years, learning is a never ending process and leadership is just a journey. It was and still is always an important topic to me to better understand how to be a more effective and successful leader, but also to support others to develop. Therefore, I have seven questions to think about and to question yourself, how well you might handle those seven kind of objectives as follows:

1. Are you able to develop a simple plan for your complex strategy?
Simplifying complexity and being ready to implement a solution are key pillars. I have found that many people are great in providing critic, or can analyze and study a problem forever. Far fewer are skillful enough at getting to the heart of a challenge and offering then a simple strategy and plan, a solution. If this is your strength, you could be a really great CEO.

2. Do you walk the talk to create a winning company culture?
Every company talks about their culture these days, but in many places it is still messy and political. Only the best leaders and CEO’s pay real attention to how and when people commit, how employees accept accountability, and how they win. If your focus is on an value based culture to become sustainable effective, you are a leader.

3. Can you build teams that work together to drive the strategy?
Teams that work together are the ones that build trust in an organization and they have each other's back, all while engaging with their leaders and following a commonly developed strategy. CEO’s who make this happen start by hiring the right people, communicating a strategy and being the role model for a trustful and mutual beneficial collaboration.

4. Do you provide leadership to drive a transformation?
There is no more dangerous position in business than sticking to the status quo. The challenge of reinventing almost every aspect of a company on an ongoing basis can be overwhelming to everyone, so you are expected to questioning, to provide the passion, framework and incentives for continuous innovation.

5. Are you able to listen for danger signals and bad news?
Too many CEO’s today like to talk and trust their gut, but fail to listen to their team or the customer. They overlook danger signals and make excuses for bad news. Great CEO’s humbly invest the time and energy to walk through the halls, travel to customers and hold regular employee meetings, with real anticipatory listening.

6. Can you avoid predictable mistakes in handling a crisis?
Real leaders don't run and hide, or try to deflect blame, when a crisis hits. You have to be visible, show a sense of urgency and communicate a plan, with regular status, to everyone. Stay calm and project confidence, while arranging your team to understand and attack the root cause of the problem.

7. Do you understand the demands of leadership?
True leaders are expected to be optimistic yet realistic and compassionate yet demanding; to create freedom with structure and to make unpopular calls, while keeping your ego in check. You have to appreciate the long-term rewards of a positive legacy, bringing out the best in others and new learning.

Before you become a critic now, take the time to do an honest assessment of your own capabilities and tendencies against these tough challenges. The business world needs more leaders and effective CEO’s to better serve their customers, their employees, and their companies.

Every day is a good day to start sharpening your skills.

I often have to illustrate the complexity of the CEO position to others who want to place ambitious people without a real bottom-up experience directly into a big CEO position and classically underestimate the challenges and pressure those potentially nominated people may face, outside of their technical background. It will be dangerous and risky for both sides. Coaching and focus are requested in such situations and to try to start to focus on three things as follows:

1. Harnessing strategy
The CEO’s single most powerful lever is ensuring that every unit—and the company as a whole—has a clear, well-defined strategy. Strategy creates alignment among the many decisions within a business and across the organization. By spending time on strategy, a CEO provides direction for the company, helps make its value proposition explicit, and defines how it will compete in the marketplace and differentiate itself from rivals. Strategy also provides clarity on what the company will not do. A compelling strategy—if well understood throughout the organization—is motivating and energizing. And without clarity on strategy, the CEO will be drawn into too many tactical decisions. In large, complex firms, CEO’s can almost never spend enough time on strategy—they must constantly be working to shape it, refine it, communicate it, reinforce it, and help people recognize when they may be drifting from it. CEO’s must also ensure that the strategy is renewed from time to time and based on changes in the environment. Portfolio choices such as divestitures, mergers, and acquisitions are critical to strategy, and a CEO must be personally involved with them.

2. Aligning organizational structure and culture
To foster appropriate decisions across the company, the organization’s structure needs to be aligned with its strategy. Otherwise, the CEO will be drawn into endless adjudication among units. It can also become a big drain on the CEO and others if the organization is constantly lurching from one structure to another. Culture—which encompasses an organization’s values, beliefs, and norms—is another key CEO lever for reinforcing strategy and influencing how the organization as a whole goes about doing its work. CEO’s can shape a company’s culture in many ways, from the time they spend talking about it at various forums, to personally living the valued behavior’s, to recognizing, rewarding, and celebrating those who exemplify the desired culture while taking corrective action with those who don’t. It is the CEO’s job to champion the organization’s culture and constantly look for opportunities to strengthen it.

3. Finding time for customers
As an executive ascends from managing a line of business (which involves more-frequent customer contact) to the job of leading the entire company, it is natural for customer-facing time to decline. Nonetheless, customers are a key source of independent information about the company’s progress, industry trends, and competitors. In the B2B space, meeting with customers’ CEO’s is highly valuable, since peer conversations can be very candid. In B2C companies, there are also rich opportunities for customer contact. For retail CEO’s, for example, store visits—especially unannounced ones—are an indispensable way to talk to regular customers, not just the company staff.

Summarized and in other words, CEO’s are in general more likely to be risk takers than other executives. There are six other characteristics that differentiate the typical CEO from other executives on a statistically significant basis:

1. Drive and resilience

2. Original thinking

3. The ability to visualize the future

4. Team building

5. Being an active communicator

6. The ability to catalyze others to action

SAGE