Insights- CEO Excellence – Notes from the Book
While CEO Excellence by Carolyn Dewar, Scott Keller and Vikram Malhotra is focused on those working in the CEO role, many of the concepts can be applied equally to the business owner and can help develop a mindset for success in your own business.
“The test of first rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still hold the ability to function” F Scott Fitzgerald.
After researching a group of successful high performing executives from around the world they created a list of 6 mindsets exhibited by all.
Further they established although not all top performers excel at all mindsets they are generally great at a few and strong on others.
The mindsets are summarised below:
Direction Setting Mindset:
Embrace uncertainty – fortune favours the bold mentality
- Reframe the game and what winning means to your team eg Netflix – didn’t just focus on DVDs but rather looked at bigger picture.
- Finding and amplifying intersections- finding the intersection of what the world needs, what you are good at, what you are passionate about, how you can make money.
- Making it about more than money eg Adidas – rather than focus on $ it was helping the athletes be better- the financials will follow.
- Not being afraid to look back to look forward – sometimes don’t need a new vision but just to tweak the original one in line with outside changes.
- Involving a broad group of leaders in the process – people support what they help create as the desire for cntrol is a deep rooted survival instinct – Daniel Kayneman lottery experiment.
- Need a North Star that redefines success, influences decisions and inspires people to act in desired ways.
- Make big moves early and often
- Five strategic moves matter most when pursued with a man on the moon boldness
- Buy and sell – acquisitions and spin-offs.
- Invest – when capital is used wisely it can help to grow.
- Improve productivity- reduce administration and costs.
- Differentiate- improve business models or create price advantage.
- Allocate – resource allocation includes money and talent.
- Courage to make big moves comes from being an exceptional futurist
- Keep track of shifts in ech, customer preference, competitors and threats
- Keep an eye on the downside – understand the cost of getting it wrong and what mistakes you can afford to make, pattern recognition and analytics
- Act like an owner – overcome the imbalance in short term v long term thinking.
- Regularly apply heart paddles – reinvent amd think of moves as s curves driving change
Resource Allocation Practice
- Act like an outsider- Wald analysis of surviving planes that were hit but returned successfully in WW2 – if resources are not deployed in the right area, battles will be lost.
- Highest performers reallocate capital over 6% each year. But use to line up with vision and strategy.
- start with a zero base – can’t be wed to tradition, internal loyalties or short term pressures.
- Anchoring heuristic – Kayneman – is cognitive bias – focusing on last years budget anchors us to a higher point of reference, meaning it will distribute in a similar pattern to last year.
- Solve for the whole – consider best for whole business rather than for each individual business unit.
- Manage by milestones not annual budget – don’t turn something profitable around just because it’s not in the budget- have the reserves to move things around.
- Killing as much as you create – seed, nurture, prune and harvest stages – nurture and prune include reallocation of capital.
Organisation Alignment Mindset:
Culture eats strategy for breakfast.
- Find the one thing
- Reshape the work environment – through
- stories that are told and questions that are asked
- formal mechanisms – structure, processes, systems, incentives
- role modelling
- confidence in ability to behave in desired way
- ” you are either helping a client or helping a colleague help a client”
- make it personal
- Be the change you want to see- good but not enough
- Discuss your failures
- Ask for help on what you need to improve on
- Make it meaningful
- Take risks
- Have their backs
- Give everyone the identity they need – in hospital all employees had the name badge I am a caregiver – even the kitchen staff/ cleaners.
- Measure what matters – not everything that counts can be counted and not everything that is counted, counts
- Get feed back from team on how culture is going
Organisational Design Practice
- Solve for stagility ie stable and agile
- Fast growing companies are built for innovation and can change quickly, but also on the other hand, stable, strategically consistent and unchhanging and strong culture
- The best CEOs
- Stop the pendulum swing – Goldilocks principle- the just right moment – balance of centralisation / decentralisation, stability/ agility
- Emphasise accountability – Set reporting structure to avoid confusion and duplication, understand who really makes decisions
- Think helix, not matrix – Two leaders with joint responsibility but must work together to achieve success
- Make smart choices – What must be stable and what must be agile ie tankers v speedboats
- Teams of teams
- Resource pools that flow to work
- Fast to market and rapid customer response
Talent Management Practice
- (Don’t) Put people first – “Judge a fish by its ability to climb a tree and it will spend its whole life believing it is stupid”
- Roles should come first
- Clearly define high value roles – identify importatn roles and the key charactistics, strengths needed for each of those roles.
- Skills and attributes should also align with values- Other characteristics such as enthusiasm, smarts, flexibilty and results orientation,
- Don’t forget the left tackle – we need them to protect the quarterback
- Find unusual suspects
- Chose the best for the role whether internal or external
- Bring in new thinking
- May not be whom you initially thought it would be
- Actively build the bench
- Always keep an eye on what up and coming talent is in the wings
- Get right people in right place and actively coaching them to be good in their roles.
Mobilising Leaders Mindset
Solve for team psychology
Team Composition Practice
- Create an ecosystem – a group of high performers only become truly high performing if members are complementary and connected.
- Staff the team with an eye to aptitude and attitude
- Build a team you can rely on, trust and have synergy
- Look for those with the ability to push back against boss to present their ideas.
- Balance short and long term thinking and focus
- Teamwork can mean – getting along. But it can also mean standing up and saying I don’t agree with something because it’s not in the best interest of the company,
- Passion – infectious and people want to be around them
- Empathy – Act fast but fairly regarding those that don’t belong
- Create environment that supports people in learning, adapting and evolving to the extent the want to.
- Any coach that needs to replace all the players isn’t as good a coach as he thinks – Should ask these questions before acting
- Do they know expectations?
- Do they have tools and resources and a chance to learn to use them?
- Are they surrounded by others with right mindset?
- Do they understand consequences of not delivering?
- Stay connected while keeping their distance
- Understand strengths and weaknesses to form relationships and understand each
- Can be friendly but don’t want to become biased
- Grade behaviours first, then grade results
- Build a leadership coalition beyond their immediate team
- Engage leaders beyond the direct team
- Look for leaders who want to build other leaders
- Form a kitchn cabinet – provides a safe place to discuss highly sensitive issues and provide unfiltered feedback
- Talent wins games but teamwork and intelligence win championships – Michael Jordan
- Ensure team only does work that it can do
- Law of triviality – people tend to give a disproportionate amount of attention to trivial issues and details
- Top team only focuses on the big things
- Clearly define what it means to be a member on the team – Norms – company above disconnect or region
- Behaviour charter
- Combining dialogue, Data and speed in decision making
- Avoid groupthink and confirmation bias and optimism bias
- Having CEO included can stifle thought process
- Investing regularly in team building- Facilitator to build trust
- Activity – rank everyone in team who you trust most to least and identify any in team who fall below what you want it to be
- Peak performance as a team member and what that environment is like
- Alignment on direction
- Interaction built on trust, open communication and willingness to do conflict
- Sense of renewal and can take risks
Operating Rhythm Practice
- Setting template and tempo
- Meeting frequency and how they are run
- Weekly – Red flag green flag – issues and things to celebrate. What’s the best time to solve a problem – the minute you have one
- Monthly – strategic, operational and organisational plus external trends
- Quarterly – big issues
- Multi day offsite for top team
- Annual meetings for teams and individuals
- Connecting dots between decision making bodies – Need to mush different divisions and areas together including budgets, resource allocation and talent mapping
- Acting like an orchestra conductor – Build the decision making muscles in others so the leaders make less decisions
- Demanding disciplined execution
- Ensure the right info is available
- Come to meetings to make decisions- be there and be prepared
Board Engagement Mindset
“Be strong enough to stand alone, smart enough to know when you need help and brave enough to ask for it” Zinder Abdul our.
Role of CEO is to help board fulfill fiduciary duty
Board Relationship Practice
- Money is the currency of transactions- trust is the currency of interactions
- Radical transparency – Mitigate issues when bad news and help speed decisions if board has a heads-up
- Build strong relationship with board chair – Bridge the gap
- Reaching out to industry visual directors – Build trust and transparency
- Exposing board to management team – save time and energy as well as opportunities for management to learn
Board Capabilities Practice
- Tap the wisdom of elders – “Together we can do great things” – Mother Theresa
- Delineate roles of the board and management
- Succession planning – hire and fire the CEO, approve strategy of company, monitor and manage risk, through audit, governance and compensation committee. These need to be clearly defined and boundaries set to ensure conflict minimised. The CEO should provide perspective, not direction
- Specifying the desired profile of directors – Capability matrix is useful- directors self assess which skills they bring to the table in terms of board skills as well as diversity on other areas.
- Educating group – Need to understand the market, the opportunity, the threats, the internal players and the external. Boards should receive sufficient training onsite and off to grow knowledge and relationships.
- Encouraging the board to continually renew itself
- Performance evaluations – Receive feedback on what went well in a meeting.
- Get rid of old or stale members who are no longer contributing – Focus on the future = Don’t let too much of yesterday take up today.
- When the board mindset is to stop you from failing- you can’t help but focus on failure
- First hour for ceo and board only – no other management – gives them better perspective but requires radical transparency
- Promote a forward looking agenda – Focus more on topics that drive performance such as strategy, talent and org health. Set a framework for areas you want help with.
- Walk in the board members shoes- gain some experience being a board member in another company.
- Let the board run itself. – don’t get involved where you don’t need to. Should be spending less than 20% of time with your board
Even in a smaller business think who are your independent advisory members that advise and hold me accountable. What are their skills and what is missing.
Stakeholder Connection Mindset
- Start with why?
Social Purpose Practice
- Employees draw on 5 sources of purpose and motivation and each person has a different motivator.
- Themselves – development, financial and non financial reward and freedom to act.
- Fellow employees – sense of belonging, caring for others and doing the right thing for the group.
- Company – achieving industry leadership and beating the competition.
- Customer – making life easier and creating impact.
- Society – making the world a better place.
- Company purpose should tap into each different motivator
- Clarify the company’s societal why – Clearly show your social pulse through mission and vision of the business and stand by it
- Embedding it into the core of our business
- Consistency – Can only trust companies that think, say and do the same thing.
- Should be built int operation- not just offsetting damage after the fact
- Using strengths to make a difference
- ESG, social factors ( diversity and inclusion, working condition, fair wages, and community relation), government factors (risk mgt, donations, political lobbying, transparency, tax strategy )
- Making a stand when warranted – Don’t get personal politics confused with company but sometimes there is expectation to lead with your gut
People who report living their purpose are work report levels of well being five times higher than those who aren’t and four times more likely to be engaged with the business.
Stakeholder Interaction Practice– get to the essence
- A company relationship with external stakeholders can influence as much as 30% of earnings
- Just because you are right, doesn’t mean you aren’t wrong – point of view is different for everyone.
- Contain the time spent outside – Best CEO’s spend average of 30% of time with external stakeholders- finding the balance of which makes up that time is important
- Understand the other party’s why – Helps form profound connection, resolve conflicts, and create respect. See criticisms as opportunity to change
- Gather as many good ideas as possible from interactions – Harvest new ideas to make a better business.
- Maintain a single narrative across all stakeholders – Open, honest and consistent
Moments of Truth Practice
- Stay elevated – Best way to manage a crisis is to avoid it in the first place
- Stress test the company regularly – Create resilience before it happens by being prepared. Forecasting worst case scenario and have a contingency plan
- Create a command centre when a crisis hits – Cross functional team to deal with issues empowered to deal with primary (legal, technical, operational and financial challenges) and secondary (key stakeholder reactions) threats. Small agile team with senior leader, adequate budget and decision making authority. This allows the CEO to not be all consumed in a crisis.
- Maintains long term perspective – While crisis may impact parts of business we need to keep the rest operating
- Need communication but also to set context and define expectations
- Let committee report to you, don’t chair it, show you are in control, that you know what you are doing and you will take care of then and think of what else might happen and look for opportunity.
- Make sure you don’t put behind you until you address root cause
- Shows personal resilience – Deal with issues and plan the next move. Can’t take it personally.
- Get off the dance floor and up on the balcony.
How to apply each CEO mindset to a business owner.
Personal Effectiveness Mindset
Do what only you can do- “There’s nothing so useless as doing efficiently that which should not be done at all”
Time and Energy Practice
- Manage a series of sprints – How heavy a glass of water is depends on how long it is held.
- Keep tight but loose schedule
- Colour coding in calendar.
- Making lists – prioritised with importance
- Need to stay flexible enough to fit in stuff that comes up- not rigid
- Learn to say no
- Care enough to compartmentalise
- Be in the moment
- Leave work out of home
- Make vacation time
- Tune out external criticism
- Infuse energy into your routine
- Be aware of what generates and what depletes energy
- Schedule important strategies meetings at your best time of day ie morning or night
- White space in between meetings
- Exercise, sleep and eat right.
- Set worklife boundaries
- Tailor support staff to your needs
- Admin team to help manage your time
- Bring on others to support you when needed.
- Live your to be list
- Doing is never enough if you neglect being
- Act in a way that is consistent with your strengths and values
- Consistency of character means following the same principles in all circumstances.
- Adapt leadership to what the company needs
- Situational leadership – chose language and messaging relevant to the situation
- Embrace and act on feedback n spirit of growing as a leader
- Seek to continuously grow- get external coaching and ask for feedback, take ideas from others at all levels. Be vulnerable and open.
- Provide hope for the future in all situations
- True humility is not thinking less of yourself it is thinking of yourself less.
- never make it about yourself – Just make sure the boat doesn’t sink while you are in charge
- Embracing servant leadership – Find success and power in the growth, support and empowerment of others
- Create a diverse kitchen cabinet – Those able to talk to you without being afraid of you. A less formal team of advisors
- Displaying genuine gratitude for the opportunity
Author: Donna Bruce