A recent article in the Harvard Business Review about CEOs and leadership found that 68% of CEOs weren’t fully prepared for the job. One interviewee sums up the reason for this stark finding thus: “When you become the final decision maker, everything changes. It’s hard to train on this.”
Despite this high figure, the CEOs reflected that they were very well prepared from a technical, day-to-day operational perspective. These strategic and “running the business” components of the role came naturally, but the personal, interpersonal and accountability components were the piece that were missing.
While we can commiserate and perhaps empathize somewhat if we have found ourselves in a role that is new and unfamiliar, it is staggering that such a large number would feel unprepared. After all, strategy and running parts of a business are not unique to the CEO’s role. Nor are personal or interpersonal relationships. So despite their years of experience, these CEOs felt unprepared for a position which in many ways should be an extension of their previous roles.
I have had the privilege of working with many CEOs over the years and my experience reflects these findings.
Where I see CEOs as strong is with their strategy and business acumen; how to best run their business for superior performance for a quarter or for a year; how to manage teams to get the right talent in place to do the right things; making sure that the right products get to market at the right time to meet customer needs.
These are the strengths of a good CEO but all of those skills are focused on when things are going well. But what about the skills required that are not a day-to-day requirement? What about the skills needed when things go wrong and, as CEO, the buck literally stops with you?
The times when things go wrong are the moments when CEOs are tested most.
Sadly, it’s been my experience working with some CEOs that they are generally under-prepared for these challenging times. A crisis or critical moment is going to shape the reputation of their organization for the long-term but these situations happen rarely in the daily life of a CEO. In this context, the CEO’s lack of experience is understandable: in fact, not having been part of a ‘real’ crisis may even be a sign of successful risk and crisis management practices in the past. And that is a good thing.
So what determines the success or failure of a CEO when they are tested like this? I believe that it comes down to two things: preparation and leadership.
I will address preparation of a CEO in more detail in a separate article late this month as I have seen the benefits time and time again of preparation prior to an event. Developing clear, simple plans, agreeing protocols and practicing as teams in realistic settings will pay dividends if a real event occurs. More on that later.
But between these two, I believe that leadership is the key. The phrase I love here (and use often) is
“The crucible of crisis doesn’t develop your leadership, it reveals it.”
Unfortunately, what it sometimes reveals is an underpreparedness for these situations when everything is going wrong.
The leader who can manage in the good times and navigate the bad is the leader that truly creates a reputation-resilient organization. It’s not easy to grow your reputation and it’s not easy to compete in a hyper competitive marketplace. In fact nothing about being a CEO is, or should be, easy. This is a hard job.
But it is far more difficult to navigate through the disruption of crisis even when compared to the most difficult strategic decisions that companies face.
Obviously most of the decisions that a CEO has to make are difficult: that’s the singularity of their role. If problems were easy, anybody could address them – as the old adage in US government goes, ‘nothing easy reaches the President’s desk’.
But decisions in a crisis are an order-of-magnitude more complex. Facts are in short supply, time is tight and careers – even lives – are on the line. This is when the CEO really needs to come into the fore.
If you can keep your head when all about you
Are losing theirs and blaming it on you…
IF – Rudyard Kipling
It is these reputation-defining challenges that make leaders who they are and determines how we remember them – for better or for worse. How a leader performs in the most testing of times is always how we think of them whether they are from government, sport or business. A great performance will often seal their future success whereas a poor showing can be the beginning of their slide into ignominy irrespective of how they performed before or after the crisis.
So leadership is the key to this success or failure but the critical point to remember is that the crucible of crisis doesn’t develop your leadership, it reveals it.
And when it’s revealed, you don’t want to be surprised by what you see. You need to make sure that you are as prepared as possible. There are specific crisis management skills to learn and lots of tactical pieces of advice such as being able to differentiate smoke from fire, to act swiftly but not become hurried and to stay focussed on the big picture. These technical crisis management skills and specific tactics are important but cannot overcome a leadership deficit.
I believe that this was the biggest omission from the HBR article – preparation for when things go wrong.
At the beginning of this piece I quoted a CEO who said “When you become the final decision maker, everything changes. It’s hard to train on this.”
I respectfully disagree.
I have worked with and trained CEOs for the most testing of times and believe that if you can train for that, then you should easily be able to train for the day-to-day challenges of leadership. These are two different skill sets but both can be developed to ensure that CEOs have the personal and interpersonal skill to make them better leaders at all times.
So you need to develop yourself as a manager and a leader for both the good times and the bad. But please don’t wait until you are in the crucible to discover the kind of crisis leader you are. By then it may be too late.
Links and references