schneiderism

Everybody is being tested right now. The state of the economy being but one of many forces acting on modern business, leaders within companies find themselves operating increasingly in uncharted waters and dealing with operational realities that had previously, in many ways, been inconceivable. And yet, deal with them they must. Business always demands tough decisions and decisive action, but the present seems to be intensely unforgiving of hesitation, confusion, and inexperience. These challenges must be doubly difficult for those new in positions of leadership, especially as those around them look desperately for guidance and indications that everything is going to be fine.

I just read a brief but interesting article at the site for the Harvard Business School’s Working Knowledge. The Seven Things That Surprise New CEO’s succinctly outlines some of the more frequent challenges to new leadership, challenges that are being magnified by the realities we all now are attempting to navigate. I am sure that we have all seen manifestations of each of these with those we work with, with the leaders of the companies we know well. That, and the headlines at present seem to itemize daily the consequences of failed leadership. As a starting point, below are the seven things that surprise new CEO’s from the article:

1. You can’t run the company - You are too deeply entwined in operations, involved in too many meetings and tactical decisions.
2. Giving orders is very costly - You are the bottleneck in the decision process and your employees feel obligated to consult you before they act.
3. It is hard to know what is really going on - You keep hearing things that surprise you and you do not hear them directly. Often, you are learning about situations after the fact.
4. You are always sending a message - Stories about your behavior magnify or distort reality and people seem to always be attempting to anticipate your likes and dislikes.
5. You are not the boss - You do not know where you stand with board members, and roles between the board and management are not clear. The discussions in board meetings are limited mostly to reporting on results and management’s decisions.
6. Pleasing shareholders is not the goal - Executives and board members judge actions by the effect on stock price and management incentives are disproportionately tied to stock price.
7. You are still only human - Your lifestyle is more lavish or privileged than that of other top executives in the company and you have few if any activities not connected to the company.

One overriding theme pointed out in the article is that we need to look closely at how the role of CEO is defined. My take is that this is not a position that we need invested in operations and tactical planning for the organization. It is a position that needs to set, nurture, and monitor the strategic direction for the company while mentoring the executive team for success with their individual responsibilities, and for success in working together as a team. It is a position that needs to embody the culture of the organization, and act as role model for the behavior, management style, and vision that the company requires to be successful in the marketplace over the long term. The CEO is a role that needs to own the long view, that plans for and relentlessly pursues the five and ten year plans, while holding others accountable for the successful day-to-day operations of the organization and for quarterly and yearly performance.

To the point of the article’s authors, successful leadership will come from becoming absorbed in the best definition of the role, by maintaining personal balance, and by staying grounded. This may mean being clear about your own strengths and weaknesses, working to maximize the former and compensate for the latter. Additionally, it is important that the position does not confer the right to lead and that this is something that is, and always will be, an earned position based on effectiveness. A position that can be taken away by failed leadership, investors, the markplace, or organizational dysfunction. Ultimately, only by working through all of this and being honest with oneself will a CEO find success in leading an organization through challenges.