I’ve seen a wide variety of researched estimates of the average tenure of a CEO. They range from 2.5 to 7+ years. I don’t know many private investors who are that patient. The last two CEOs I met, gave themselves considerably less time to make their mark; 1 year and 6 months respectively.
CEOs seem to have a honeymoon period of around 18 months. By the end of which, if things aren’t significantly better, their ‘marriage’ with the investors will probably not last.
A chat with Professor Colin Coulson Thomas prompted me to write this blog. Colin, author of Winning Companies:Winning People, is Chairman and fellow board member of Cotoco Ltd .
Here are the warning signs that CEOs fear most.
- Bad earnings news: the most likely and quickest sign of departure.
- Corporate programs don’t deliver: mergers and acquisitions “achieve 70% of their potential” at best.
- Failure to turnaround ailing sales quick enough.
- Change takes too long: “Corporate Firewalls” prevent people from getting it done. More on this later.
- Investors don’t understand: a CEO spends 40% of their time articulating strategy and some argue that’s not enough.
- Personal wealth at risk: e.g. missed deadlines can lead to private investors swallowing up the shareholding of a company
- Lack of innovation: playing it safe is no longer an option these days. Competitors and customers are moving too quickly.
- Talent gaps in performance: e.g. 20% of the salesforce bring in 80% of the revenue (and probably a much higher percentage of the profit).
- Conflict in the boardroom: too much time spent looking inwards leaves too little time to focus on the customer.
- Personal credibility at risk: any of the above means less likelihood of stepping up the ladder of success and/or lack of a legacy of note. These in turn can lead to…
- Personal health at risk: where the stressed mind-body connection can have serious consequences. I know of one CEO who, after missing targets set by investors, developed terrible eye problems because he didn’t like what he saw. Another developed disabling back pain through a lack of self esteem. Another who was deemed too rigid and inflexible developed problems with their joints.
Getting the strategy right will largely depend on the advice the CEO receives from those around them and experts (those they know who have done it before). This is called mentorship. And many stop there because it’s traditionally acceptable to have mentors.
But the CEO’s job is not just about getting it right. It’s about influencing people who don’t want to be influenced at first. If they were easily influenceable they’d have done what was needed long ago. This leads us to those constructs that get in the way – I call them….
With a select group of people, the CEO works out what tomorrow’s reality for their organisation will look like – and the strategy to get there. They find the first firewall just outside this group. Everyone on the inside ‘gets it’. Those on the outside don’t – certainly not the whole picture. Which means they miss perhaps key pieces to the corporate jigsaw. The more select the CEO’s inner group, the higher or tougher the ‘wall’ is to breach.
The wall filters out some of the cognition and understanding of what went on inside. It only takes a small amount to create ambiguity. Once ambiguity kicks it can start a trail as follows:
ambiguity –> confusion –> stress –> dysfunction.
This occurs especially in organisational cultures where ‘not understanding’ is perceived as a weakness. And when a ‘senior middle manager’ (say, from outside the group) doesn’t get it, they tend to do one of 4 things. They…
- Ask for clarity (’tis surprising how little often this happens)
- Put their head down, pay lip-service, and hope it will go away
- Push back (the larger the hierarchy the less egalitarian the culture)
- (Most dangerous of all) Make up the missing pieces of the jigsaw for themselves
The latter habit creates the most confusion for everyone in the value chain right through to the customer interface or the grass roots level of the organisation. For just behind this ‘grass roots’ operational level we observe a second firewall. Curiously, those at the ‘grass roots’ level seem to get the gist of CEO messages quite easily. It’s how those messages are translated into action where the confusion lies. And they are sometimes less prone to keeping quiet when things don’t add up. So the CEO has the challenge of involving those who will carry their message wholly and articulately into the organisation on their behalf.
7 Key Traits
CEOs require a mixed repertoire of personal strategies to influence influencers. In my personal research (of several hundred top performers in organisations around the globe) I’ve observed 7 key traits (or characteristics) in those who influence the best:
- Faith-in-Self – when there is no data (or time to gather it) to make big decisions.
- Passion – if you don’t radiate passion how can you expect others to shine?
- Sensibility – to see where others are at, where they come from and where they are headed, in their minds
- Articulate – to simplify complex concepts and make them compelling
- Curiosity – to explore what’s going on below the surface of things
- Networker – it’s not what you know it’s who you go to, to find and share wisdom to get things done
- Composure – under pressure or facing the unknown
We demonstrate traits. They describe how we come across to others. We do not learn them in a classroom through conventional training. We nurture traits. A good Executive Coach accelerates the process of how a CEO nurtures winning traits and behaviours (that may feel uncomfortable at first) – to forge a strategic personal-identity with those people whom they do not have personal contact with. If these winning traits were purely intellectual or comfortable they wouldn’t need a coach – would they? With this in mind, we can see the difference between mentoring and coaching.
We get what we project.
CEOs get people to copy what they project. The onus they face: to transfer the above traits and characteristics to others. Some CEOs see coaching as something for other people with problems. They are part right. It is. But the problems I talk about are all associated with an inability to influence those people who will block/thwart even the best thought out plans. CEOs might not even know what those that hinder are up to – because they are hidden behind a Corporate Firewall.