Are You Really An Effective CEO?
Those in corporate leadership positions, as well as the consultants paid to assist them, have long been taught that their success is measured by various quantifiable metrics such as profitability, earnings per share, return on equity, etc… Over the long term, these numbers tell a clear truth, and confirm the quality of those in the executive suite.
However, even the strongest companies have spills and gluts over the long term, and the rebuilding phase at times gives way to many years of profitability, growth and fortified structures on which to build sustainable enterprises, only because principled leaders recognized the right time to assert certain strategies and held the right traits to marshal the company behind them.
Research has shown that, over long periods of time, quantifiable metrics alone are not determining factors in knighting corporations as “successful”. CEO’s need to take note; success at the company you lead may have as much to do with the strong foundation that your predecessor championed as your own ability to recognize and fix departmental deficiencies.
CEO’s coming in at the right time can benefit without really putting in much effort at the beginning. In the early 1990’s, Barry Switzer replaced Jimmy Johnson as coach of the Dallas Cowboys and inherited a team structurally sound and at the height of its collective success, primarily due to the forward-thinking and team-building abilities that Johnson and Jerry Jones, the team’s owner, possessed.
Switzer won a Superbowl with the Cowboys in the second year of his tenure, but without Johnson’s strong direction, the team devolved into mediocrity, and, arguably, continues there presently.
So what exactly makes a good leader over the long term- defined as that period of time encompassing short-term spikes in quantifiable metrics- or just “good-times”-as well as rebuilding episodes? Our research of companies, clients, and resources reveals that the following 3 traits continuously reveal themselves when answering this question:
- Caretaker for Future Generations
The overarching quality among CEO’s who lead prosperous companies is a desire to protect and promote the mission of the organization. There’s an understanding that everyone is there not just to make money, but also to promote each other’s welfare and contribute to society.
In Built To Last, Jim Collins and Jerry Porras write about how Motorola founder Paul Galvin prepared for the future at his company by ensuring that the core management philosophy would continue after his departure. He began grooming his son Bob Galvin years before the formal transfer of power, and made his son work from the ground up to see and appreciate the work involved in making the company a success. The elder Galvin told his son that they would act as one in the task of leading the company, and Paul learned the vital tasks of leadership by example and by observing his father care for employees firsthand.
To reinforce the concept of leadership continuity, Gavlin championed the concept of the Chief Executive Office as opposed to a lone individual. The office was held by team members (usually three), who acted as a cohesive unit to lead the company. All three had a unified set of leadership principles, there was always a clear understanding of succession hierarchy, and they were always prepared for unscheduled and seamless changes in leadership. Any one of the three could step in and thereby preserve the core values of the organization from the top.
As a result, Motorola has suffered no leadership discontinuities, and has displayed unbroken continuity in top management excellence steeped in core values, even when it has lost top management talent.[1]
- Coach your People
Top CEO’s realize the benefit of good talent, and take direct measures to ensure that these people are cultivated and recognized. Each employee is different, and each needs to be individually recognized. If this is done regularly and sincerely by the top leader, top employees will respond positively and will catalyze the growth of the company, because the CEO has convinced them that it is in their best interest to do so. People of a certain caliber want to work for a good cause; if you give them that cause, they will respond positively.
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Coaching people includes ensuring that they are happy in the workplace, and for top talent, that means challenging them to harness and grow their skill set. Avery Augustine argues that top leaders will continually do this in order to stretch their people. Doing so will maintain the workers commitment to the company, because they will be sufficiently stimulated and in a position where they can be rewarded.
As an example, for those displaying leadership qualities, the CEO provides them with increasing leadership roles commensurate with their ability, which is itself tracked by the CEO. The encapsulating reason for the CEO to do this is that, while mentoring the employee, the CEO has the ability to affirm and promote the mission and core values of the company.
The right employee will follow suit.[2]
- Good listener
In the 1990’s, Anan Mahindra, CEO of the Mahindra Group, asked a number of people at his headquarters to scout for opportunities beyond his group’s tractor and utility-vehicle businesses. Among the pitches he received was one for a time-share based hospitality business. Recognizing that time shares in India at the time were operated unethically, Mahindra sensed an opportunity and invested $5 Million in company resources. By 2012, Mahindra Holidays & Resorts had become India’s market leader in the space, with a current member base of over 15,000 and a market valuation of over $50 Million. This is all because Mahindra had fostered an environment where employees had empowerment and could exert their talents for the benefit of the company.[3]
Leaders will not always have the answers, and if they have hired the right people, these people are going to want to – and have the ability to - make smart strategic decisions, and in so doing believe that they themselves are part of the mission of the organization.
These traits have a common cord – a conscious effort by CEO’s to focus on something other than themselves – a trait of giving rather than taking, of the future rather than the present. For those aspiring to help others and contribute to the corporate landscape, these lessons should be quickly implemented by new CEO’s.
Nicholas Kilpatrick is a partner at the accounting firm of Burgess Kilpatrick. He assists companies at all stages of development and growth to secure funding, improve operations and maximize business development. Please visit our website at www.burgesskilpatrick.com or on Facebook at www.facebok.com/BurgessKilpatrick for more information on our firm.
[1] Collins, Jim; Porras, Jerry; Built To Last; 2002; HarperCollins; p178-180.
[2] Augustine, Avery, How To Coach Your Really Good Employees, www.forbes.com, January 22, 2014.
[3] Ramachanran, J., Manikandan, K.S., Pant, Anirvan, Why Conglomerates Thrive (Outside the U.S), Harvard Business Review, December 2013, Harvard University Press, p117.
