July 12

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What you could learn from ‘The CEO next door’ by Botelho and Powell (2018, 250 pages)

What makes a successful CEO?

After studying 2600 CEOs, the Botelho and Powell suggest that there are four defining behaviours that separate successful CEOs from the rest.

  1. Speed over precision.  Decisive CEOs are 12 times more likely to be high performers.  Be a better decision maker by:
    • Making faster and fewer decisions
      • A potential wrong decision is better than lack of direction
      • Do not make a decision other people are better placed to
    • Using a decision-making framework
      • Do we need to make the decision now
      • Will waiting bring any additional insight
      • Could the issue resolve itself
    • Learning from your past decisions.  Reflect on your decisions 10/10/10.  What do will you think of your decisions in 10 minutes, 10 months, 10 years
  2. Engage for impact.  Results oriented executive are 75% more successful than those that are interpersonally orientated or ‘likeable’.  Engage for impact by:
    • Being too nice is as bad as not being nice enoughIMG_3384.jpg
      • Lead with intent.  Translate vision and goals in every interaction they have – make it real and relevant.
      • Understand the players.  Align their CEO vision with individuals hopes/dreams/fears.
      • Build routines.  Keep preception gap narrow through regular interactions, have a stable base for change.
      • Think/feel/do.  For important interactions think through beforehand what you want people to think/feel/do differently.  Reflect on whether you were successful after.
  3. Deliver consistently.  CEOs who are seen as reliable are 15 times more likely to be high performing and twice as likely to be hired.
    • A ‘safe pair of hands’ is a great reputation and means more than being just good at execution
    • Pillars of reliability are:
      • Personal consistency (also highly values in Google’s project Oxygen)
      • Setting realistic expectations
      • Practice radical personal accountability
      • Embedding consistency into the organization
    • Get the small things right.  Be on time, follow up, respond in a timely manner, mediate their mood highs and lows and keep people in the loop
    • Set realistic expectations.  Just as you set the clear company expectations, help translate these for your team.
    • Stand up and be counted.  Take ownership of your work, and volunteer for difficult (but high impact) projects
  4. Adapt boldly.    Leaders who adapt boldly are seven times more likely to be successful than those who wait for change.
    • Humility allows leaders to understand what they don’t know, and then go and find out
    • Make yourself more adaptable, but learning a new skill
    • If you are not uncomfortable, you are not learning or changing fast enough
    • Let go of the past.  Customers, competitors and stakeholders change – what worked in the past will not work in the future.   Re-visit your underlying assumptions and sacred cows at least annually.  Be careful you will need to strike a balance with not upsetting those who go the company to where it is now, with the need to be able to create a desire for change
    • Build antenna around the future.
      • Build a diverse information network inside and outside the company
      • Use questions to find out what is really going on
      • Use ‘premortems’ to predict the causes of failure before they happen
      • Spend time with customers (spend 20% of your time)

 

In the second half of the book, the authors argue that while you need to perform you also need to be recognised for that performance, they use the equation career success = get results x get know.  Here are ways they suggest to get noticed:

  • Invest time with your boss, their peers and your boss’s boss (what does success mean for them, what worries them)
  • Build sponsors
  • Build a critical mass  – you need 10% (see here) to 25% (see here) of the population to support your idea to impact change
  • Ask for what you want
  • Rock the boat – for the customer and business not for yourself (be careful, inexperienced, insecure or incompetent bosses will not take this well)
  • Look and speak the part
    • Speak a little louder
    • Speak more slowly
    • Pause more
    • Make every word count
    • Know opening and closing sentence before you begin
    • Look for the verbal and non-verbal feedback

 

Finally, once you have made the giddying height of a CEO, there are numerous pitfalls and traps.  The authors suggest the following advice.

  • The five hazards at the top:
    • Ghouls in the supply closet.  Stop, pause, think.  Encourage people to ‘bring out their dead’ with no repercussions.   You have six months to find all that is wrong (see below) and establish a baseline.
      • critical gaps between Boards expectations and the reality in the business
      • hidden financial or operational time bombs
      • sacred cow or blind spot
      • murmuring that senior people are not up to the job or on the way out
    • Entering warp speed.  Slow the game down.  Your time available for internal work will drop to 55%.   Managing your time is critical, get strong gatekeepers, track your time and say no.
    • Amplification and the spotlight.  You are at the top, every little thing you do is magnified by the organisation (see my post here).
    • It’s a smartphone, not a calculator.  Before you were an expert in one or a few areas, now you have to master (or at least be proficient) at all of them.  Know your weaknesses and get help.
      • Culture shaping (consistently articulate and model behaviour you seek, where you put time and attention, who you hire, fire and promote)
      • Financial strategy (capital allocation, cash flow, tax optimisation, M&A)
      • Corporate diplomacy (broad understanding, big picture patterns, formal and informal networks)
    • Psychology thunder dome.  Being a CEO is incredibly hard, these few pointers will help:
      • Create a winning routine (find something that works
      • Don’t lose yourself
      • Find confidants and consiglieri.
  • Language matters.  Find simple ways to convey the following:
    • “This matters”
    • “I’m paying attention”
    • “I know you go this”
    • “We are discussing not decision”
    • “I want the truth”
    • “I am never too busy for you”

 

What will I do differently after reading this book?

I think this book is an excellent amalgamation of advice, with substantial supporting research.   However, the only CEOs of large and established organisations were surveyed, and while I think much of the advice is widely applicable, SME or start-up CEOs need to be careful.

For me the lessons in this book are:

  • Try to shift from someone who ‘gets stuff done’ to a ‘safe pair of hands’
  • Tone down my enthusiasm and passion and be more considered so that my ideas and thoughts stand on their own merit
  • Communicate purpose and values all the time

 

You can buy ‘The CEO Next Door’ here on Amazon UK (all proceeds go to site upkeep, and any extra goes to veteran charities).

 

Self-diagnostic questions:

  • Test your ability to engage for impact p61
  • Assess your reliability p82
  • Assess your ability to adapt p101
  • Culture shaping p195

 

How to apologise p34

  • Be personal.  Take personal responsibility
  • Be focused.  Adress specific things that went wrong
  • Be genuine.  In words and tone say sorry and mean it
  • Make no excuses.  Don’t deflect or make excuses

 

Successful CEOs spent between 10-20% time with their board (up to 30% at critical times).  Questions to ask board members p238

  • What excites you most about being on this board?
  • How did you get connected to the board?
  • Who on the board do you talk to most often
  • Where have you focused your time and effort in the past
  • Where and how would you like to engage in the future?
  • What does success look like for the company and for me as CEO in one year?