4 common mistakes CEOs make
Updated: Dec 1, 2020
The business consulting industry banks on CEOs worried about tripping up, with so much that could go wrong at any moment in any company (and strong motivation to be right 100% of the time to avoid public humiliation). Top management indeed faces a potential minefield every day. Will a vacant board chair be filled by a pragmatic pessimist? What if a key employee decides to work for a competitor? Is the sales manager’s projections on target? Is the company flagship product still relevant?
But let’s put this in perspective: Corporate CEOs typically are not fired for poor P&L performance. Middle managers get the ax or pink slip for that transgression, and that’s fair. CEOs are hired to strategize and then lead a management team toward a vision, not to micromanage tasks. The top boss is responsible for interpreting economic shifts, reviewing market intelligence, strategizing, and then holding key executives accountable for properly executing the company’s strategic plan.
So, if CEOs or company presidents aren’t usually fired for a bad revenue quarter (year or decade), what straits could be so dire that they would hire a business consultant to help navigate the company?
Four oversights, piled atop each other, could trip up even the most seasoned CEO — one armed with good intentions, market savvy, and a concern for fellow employees. Sometimes outside eyes can better identify in which area(s) their Achilles heel is vulnerable:
1. Staffing. A poor key management hire blessed with CEO backing costs extra time, complexity and money due to positional authority. No one wants to tell the boss they made a bad management hire, and the CEO also has a vested interest in keeping the person far too long. There is a gamble, too, in hiring the right key employee at under-market value. A manager who believes their salary is low but fair, given available company resources, will stay. The reverse is true if they believe they are being willfully underpaid, and there is always a watchful competitor with deeper pockets.
2. Accountability. “The buck stops here” thinking stops one floor too high if the elevator goes all the way up to the CEO suite. The buck logically stops one floor lower, where corrective action is yet possible. The CEO develops a strategic approach with key advisement; senior staff is then responsible for the execution of a board-approved plan. The best minds have reviewed and signed off on the goals, with checkpoints and balances built in. The CEO owns the check-points and determines the appropriate action to take if goals are not being met according to defined deadlines. Sometimes heads should roll and sometimes the board needs to know about, and rethink, an unexpected flux in market conditions. The CEO should know one from the other and be able to lead with a corrective action plan.
3. Big Picture thinking. It’s easy and engaging to become mired in day-to-day administrative details or tasks. To instead champion goals, a CEO must master the art of deliberate, wise delegation, and the art of listening to pertinent feedback. Finger-snap decision-making, an essential skill for a middle manager and likely the very ability that propelled the CEO up the corporate ladder, is now a detriment to executive team building. A shared vision, which requires constant communication about the big picture, keeps goals in focus.
4. Change. Imagine a sinking ship with the words “Because we’ve always done it that way,” painted on its side. Get the picture? A CEO must be embracing of change – of both personal development and company metamorphism – because the status quo oftentimes is the challenge to a company’s success rather than the organization’s safety net.