THE CEO LIFEGUARD
Your senior managers should be building you up – but they may be weighing you down
The last CEO may not have noticed the conditions rapidly changing; the senior managers (though functionally competent) may be out of their depth when it comes to supporting the CEO as a strategic leader. Instead of captaining the business as expected along a predetermined course, the CEO must overhaul the entire boat, retrain the crew and map out a winning strategy.
WHY THIS HAPPENS
If this is your story, you are not alone. Some 75% of Chief Executives find themselves in the same boat. There are several contributing factors. Firstly, functional managers are typically promoted to general managers without any preparation or leadership development. Secondly, the ‘experts’ are given special status, even though their colleagues and direct reports may find it almost impossible to work with them. Thirdly, although HR run some well-designed internal leadership courses, it may be unsafe for the CEO and the GMs to ‘let their guard down’ in front of their colleagues, rendering the course ineffective.
“30% of senior managers are considered poor leaders by their peers and direct reports, and 40% are considered ill-prepared to take the step up.”
AN EXAMPLE OF HOW ISL HELPED
There are hundreds of tales of CEOs who found themselves in these situations. Robert’s story is a classic example.
Robert was a GM when he attended our Strategic Leadership Programme and kept in touch to update us with his progress and career ambitions. When Robert landed the CEO job at ‘Newco’, naturally he was pretty chuffed.
Robert met with us after his first 30 days as CEO. He attended a two-day CE Class, so that he could assess the ‘State of the Nation’. The Class gave him the opportunity to process his thoughts and discuss the issues with three other Chief Executives in a trusted, safe and confidential environment.
Robert was frank: “…nothing looks good. I sense that I may have received a hospital pass.”
Financials: After trawling the Profit and Loss with an external financial advisor, Robert saw that revenues were flat-lining. Moreover, the EBITDA, when expressed as a Return on Shareholders’ Funds, was well below what the Board and investment analysts would expect for a business like this.
Leadership and Culture: Sitting in on meetings: Robert sensed that although senior managers were committed, they did not have the leadership capabilities to operate at the level required of them. Their approach was tactical and mechanistic, not systemic or strategically informed.
There was a lack of accountability and the culture was hierarchical. Senior managers were focused on protecting their power, patch and status, rather than working collaboratively across ‘the whole-of-the-business’. Many important issues were discussed in whispers between colleagues behind closed doors, and there was no debate and no acknowledgement of the ‘elephants in the room’ in senior management meetings.
Human Resources: HR were operating in a very hands-on way and measuring their contribution by their level of ‘busyness’. Leadership ‘training’ was entrusted to freelance facilitators and coaches, and focused on mid and lower-level managers. There was an absence of a systematic, integrated approach, which meant a very narrow pipeline of capable leadership talent, and very few successors for the CEO, GMs, or middle-management.
THE ACTION TAKEN
At the end of this 20-minute ‘State of the Nation’ download in the CE class, Robert pushed back his chair, put his hands behind his head and said: “It strikes me that all of the things that are keeping me awake at night are, at their core, stemming from my Senior Managers. I’ve got to invest in their development. I’m not going to get anywhere focusing on the symptoms. I need to step up my GMs and empower my senior management team. And I need to get this underway, sooner rather than later.”
The following Monday morning, Robert called the Head of HR and asked her to identify an ‘accelerator’ to step up his senior managers to strategic leaders. His goal was to change their mindset and the team culture. “Let’s start with the difficult ones and create some great role models.” Robert also initiated (at the suggestion of the other Chief Executives) a weekly CEO blog, in which he reminded his 2,000 staff that engineering, accounting, marketing, customers and staff all had one thing in common: people. Everyone in the Organisation was regularly reminded that the Company’s number one goal was to create “a wave of leadership talent”.
THE INCREASE IN PERFORMANCE OUTCOMES
Twelve months later, at his annual CE class update, Robert reported to the other Chief Executives that he was finally getting traction. The engagement survey response rate had gone from 20% to 65%; engagement scores had risen from 31% to 46%. The hierarchical structure had flattened. Leaders now understood that their job was to make decisions, not delegate them to the CEO or external consultants. Most importantly, highly talented people were starting to apply for jobs at ‘Newco’, which reflected a strengthening of the company brand in the employment market. By upgrading the skills of his senior management team, Robert had built a robust platform for reinvention and take off.
“Many Boards and CEOs make multi-million dollar investments in technology and spend big money on international consulting firms, yet are myopic when it comes to investing in their key human assets.”
While this exemplar relates to leaders stepping up to a new CEO role in a commercial business, we have found a similar dynamic with Government CEs.
Chief Executives who have been in their role for a few years may also face a similar situation, especially when their senior managers haven’t kept up with the growth of the organisation or the senior team hasn’t adapted to changes in their sector.
CALL US TO DISCUSS SOME OPTIONS THAT MIGHT SUIT YOU
If you are a Chief Executive being held back by senior managers or a dysfunctional organisation culture, call +64 9 366 1560 or email email@example.com to set up a time to meet with our CEO Lifeguard in our LeaderLAB, or over Skype.
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