Archive for March, 2012

The 8 traits of a great CEO

I’ve never been a CEO; I’ll fess up on that one at the outset.  I was going to have a shot at it on two different occasions, and thought the better of it.

For the past 20 years though, I have sat beside a whole range of CEOs as company secretary, colleague, coach and chairman.  I have seen the good, the bad and the hopeless.

I have observed 8 factors which I reckon are common to great CEOs:

  1. A deep wellspring of energy.  The demands are huge, and unless you have been in close proximity to a CEO in daily action, you might not see the effort required.
  2. An ability to see the big picture, and in particular where the organisation they are heading sits in the wider world.  The pressure from the board, the market and other motley stakeholders to focus on the immediate and the specific, rather than beyond the current financial year cycle, is intense.
  3. A willingness to get down and dirty in the detail when required and actually understand the inner workings of the business: and, god forbid, even write the first draft of something really important instead of throwing that task to an underling.
  4. A thick skin which shelters and protects them: from the intra-firm political machinations; the detached thoughtlessness often displayed by the board of directors; or the short-sightedness of executives protesting against near-term pain in the cause of medium-term gain.  The capacity not to take it personally as a CEO is priceless.
  5. Sufficient self-awareness to enable them to temper a highly-tuned ego, an unavoidably essential attribute for an effective CEO, with sufficient insight to make it healthy rather than destructive, charismatic rather than ruthless.
  6. Preparedness to take one for the team.  There’s nothing that builds loyalty  like the boss taking the rap for some executive screw-up for which they themselves weren’t actually responsible; or going into bat , notwithstanding the inevitable belting from above, for a staff bonus when there’s been a big team effort but the KPIs haven’t strictly been met.
  7. A spouse or partner prepared to go on the journey, or at least let the protagonist get on with it.  The time demands on a CEO are relentless (see point no. 1) and there’s no such thing as a weekend, let alone a holiday, without the job intruding.
  8. Someone to periodically debrief it all with, preferably outside the organisation.  Sometimes it’s a mentor or coach; sometimes it’s a guru; sometimes it’s a mate.  In rare cases it’s that understanding spouse/partner.  Whoever it is, the value of having a non-involved but open listener to spill to is one of the best pressure valves going.

So given these factors, what is the pass-mark for an effective CEO?  I’m tempted to say 100%, but realistically 6 out of 8 will likely get you there.

There are probably work-arounds for most of the above if you can’t tick any particular box.  I’m certain, though, that without a big dose of point no. 1 you may as well not apply.  No. 7?  Well, make your own call on that one.

I gave myself 5 out of 8 and withdrew from the pursuit of that particular milestone. I like going on holiday without a BlackBerry.

 

P.S.  This analysis doesn’t look specifically at leadership, a whole other dimension.

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She who controls the agenda – Part 2

An agenda which contains the right items is only the start.  A well-constructed agenda can achieve so much more.

How do you ensure the board gets through the agenda?

The next priority after coverage is to ensure that the agenda is structured to give the board the best chance of getting through the business of the meeting.

Some of the most useful tools are:

  • Putting in suggested times– while timing can only be indicative in a practical sense, specifying the estimate duration of each discussion item can give the chairman a mechanism to hold the board responsible, and accountable, for covering everything necessary in the meeting.
    • If discussion around one item blows out (and that may be unavoidable for contentious or significant items) the board will need to consider what other adjustments must be made (compressing some items, rolling others over to a subsequent meeting, extending the closing time – even, god forbid, delaying the board lunch) to finish the meeting.
  • Specifying the presenter – doing this can help with smooth transitions between agenda items.
  • Putting things in the right order– there’s no point in an agenda which cannot optimise the chances of completing the most important pieces of business.
    • Consideration of significant matters might easily take longer than estimated.  If the agenda is structured to put all the “must do’s” right up the batting order, then the prospects of those matters being resolved will be maximised.
    • So: necessary formalities first, must do’s next, followed by everything else.

How can you ensure the agenda promotes the right result?

Finally, effective agendas help to get the desired outcomes.  An agenda can most usefully do this by being clear about what kind of outcome is actually required.

There is a range of outcomes which might be relevant to a given agenda item, and it is helpful in getting that outcome if the chair, and the board, know what is being sought.

A column in the agenda which specifies “Action Required” can assist in getting the necessary clarity of result (and also in focusing management’s minds on what they really want the board to do).

The most common outcomes are:

  • Formal resolution – where it is important to clearly approve a transaction or some other course of action.  There may sometimes be a need to disclose the formal resolution where proof of proper corporate authority is required – e.g. to a lender, or when the annual financial statements are adopted.
  • Approval – where the board’s assent to a course of action is required but formal and demonstrable corporate authority s not essential.
  • Resolution or approval “subject to”– where the board formally resolves on or approves a proposal but sets one or more conditions precedent before the resolution or approval can kick in.
    • The resolution or approval may express the conditions as self-fulfilling – once they have been met, the outcome becomes operative.
  • Approval in principle – where the board agrees to a proposal, but requires management to take some further action, usually to be reported back to the board.
  • Confirmation – where some formality is dealt with, like the minutes or the running order of the meeting.
  • Ratification – where something has been previously done which didn’t quite meet the requirements for formal resolution, but needs to be in unimpeachable form.
  • Noting – where the material is for the board’s information rather than discussion or extended consideration in the meeting.

So, getting the agenda sorted will not only help the board address the right topic – it will also help the meeting run optimally and get the desired outcomes.

5 reasons why you might have reached your use-by date

I just quit a job which I really liked.  I did it with uppsy-downsy feelings.  I have had the real privilege of chairing an advisory board which helps channel the efforts of a visionary sustainability entrepreneur into the non-profit arena.

I love the concepts we have been applying;  I love the projects we are turning out;  I love the smart young people we get to work with.

But somehow it felt like time: like it was no longer a start-up, like I had reached my use-by date on the board and I ought to be making room for new ideas and talents.

Plus, we had got this board to a state of relative equilibrium, and I could be throwing my own resources at things to which I could make a better contribution.

How do you know when your use-by date is up for anything you are doing? I reckon there are 5 good indicators:

  1. It’s too easy, or you are too comfortable  – you walk in and just switch onto automatic pilot.
  2. You find yourself only doing the bare minimum that the job requires, and some or all of that at the last minute.
  3. You have something else on the plate, or available if not yet embraced, which is harder or more challenging, and you can’t seem to fit it in or devote the time which it deserves.
  4. You wonder about the downside of giving it up, and the best you can come up with is “It looks good on my CV” or “I’ll miss hanging out with those people.”
  5. There’s not much more for you to learn, or for other people to learn from you.

I had at least 4 of those warning lights blinking, and 3 out of 5 is probably enough to say “Move on”.

So, sadly, I tendered my resignation.  They generously refused to accept it, but I think everyone knew it was probably right.

There’s a funny kind of serendipity about the decision.  I had been trying for a while to hook up with a local organisation whose work I really like.  We finally agreed on what I might be able to do to help them, and since I said “yes” they have just imploded.

There will be no easy or comfortable there in the foreseeable future, and plenty of challenge and hard work.  But at least I won’t have to worry about ticking any of the above boxes on that job for a while.



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