CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Restby Carolyn Dewar, Scott Keller, Vikram Malhotra
CEO Excellence is an insight-packed, revelatory look at how the best CEOs do their jobs, based on extensive interviews with some of the most successful corporate leaders, including chiefs at Netflix, JPMorgan Chase, General Motors, and Sony. The book clearly defines the role of a CEO and boils it down to six key responsibilities of: setting direction, aligning the organization, mobilizing through leaders, engaging the board, connecting with shareholders, and managing their personal effectiveness. It serves as a powerful field guide for leaders of any type of organization — be it public, private, or non-profit, and provides the right mindset for young, future leaders looking to be their best.
Setting the Direction
“Have a vision that is so clear a leader doesn’t have to do anything but get out of the way.”
The best CEOs embrace uncertainty with boldness. They’re more shapers of their fate than they’re takers of it — constantly looking for and acting on opportunities that bend the curve of history.
These leaders constantly reframe what winning means for their organizations by not only raising aspiration levels, but also by changing the definition of success. They create bold, game-changing visions and strategies for their companies to follow.
While doing so, they hardly worry about the distinction between vision, mission, and company purpose like so many other leaders do. What matters most to them is having a clear and simply articulated North Star for the company that redefines success, influences decisions, and inspires people to act in desired ways.
Actions to take
Aligning the Organization
“The best CEOs invariably dwell on the elements that will make the biggest difference and encapsulate those in a pithy word or phrase that they constantly invoke.”
Once a CEO sets the future direction for a company, the probability that the plan will become reality is low. Many studies conclude that only 1 in 3 strategies is successfully implemented. This is because change is rarely an intellectual problem for people; it’s an emotional one.
The best CEOs don’t just acknowledge this reality, they address it. They ensure that the culture, organizational design and talent of the company are aligned with their vision for the future. And that every leader owns the people-related implications of the strategy.
The technical aspect is always the easy part of change. The difficult part is people. This approach by the best CEOs doubles the odds of the strategy being executed by tackling the difficult part head on.
Actions to take
Mobilizing Through Leaders
“Teamwork makes the dream work, but vision becomes a nightmare when the leader has a big dream and a bad team.”
The dynamics of a top executive team can make or break a company. Investors know this, that’s why they cite the quality of the top management team as the single most important non-financial factor in evaluating a new IPO.
When a top team works together with a common vision, the company is twice as likely to have above median financial performance. CEOs are often out of touch with this reality. The disconnect isn’t an intellectual but a social one. Often their teams consist of opinionated leaders who represent different perspectives, vie for influence, fight over the allocation of scarce resources, and in some cases compete with one another for the top job.
The best CEOs recognize this challenge and acknowledge that it’s their leadership that will determine whether their team’s work will live up to its potential and propel the company forward — thinking less about what the team does and more about how the team works together. They obsess with solving the team's psychology and allow the mechanics of coordination and execution to follow.
Actions to take
Engaging the Board
“Directors are at the pinnacle of governance — the CEO’s boss. That said, the board is like no boss an executive has ever had.”
Engaging with the board of directors is one of the most daunting challenges that CEOs face. Left to their own devices, boards rarely add great value to the organizations they govern. Only 30% of board members report that they serve on boards whose processes are effective, and nearly half of executives observe that their board’s performance falls short.
The best CEOs don’t tolerate these outcomes. Instead, they eschew the traditional mindset of fulfilling the board’s fiduciary duties in favor of a mindset of helping the directors help the business.
Excellent CEOs also play a proactive role in helping to build a board with the right skills, making sure members’ time is used to the greatest possible effect, and ensuring the boardroom is open, transparent, and effective. In short, the best CEOs help the board chair run the board so that the directors can help the CEO run the business.
Actions to take
Connecting with Stakeholders
“Today’s CEOs find that they must interact with stakeholder groups more often than they ever could have imagined. In fact, how well a business performs can be linked to how well a CEO handles such interactions.”
The current business world demands not only that CEOs please their shareholders by making profit, but that they also please outside stakeholders such as the media, potential investors, activists and other pressure groups for their businesses to thrive in the first place.
Research shows that a company’s relationship with external stakeholders can influence as much as 30% of its corporate earnings. What happens when a crisis hits varies dramatically based not just on how a leader responds to the situation, but also on what they’ve done beforehand to build trust and credibility with various stakeholder groups.
Most CEOs understand this reality and, in turn, ask their public relations departments to help them maintain good relationships with the stakeholders. But the best CEOs start with the question of “why?” They seek to first understand the motivations, hopes, and fears of their constituents; creating strong bonds with the outside world that help the business prosper in the long run.
Actions to take
Managing Personal Effectiveness
“... Many CEOs answer that question with: “My job is to do what needs to be done.” That isn’t how the best CEOs think, however. Rather, their mindset is: “My job is to do what only I can do.”"
Being a CEO can be very demanding, often requiring a soul-crushing schedule. To meet this challenge, the best make sure they’re both psychologically and physically fit.
The choices the best CEOs make to manage their personal well-being and effectiveness are precisely that — personal. There are however some commonalities.
They’re highly disciplined in carrying out their responsibilities, understanding that their job is not to do what needs to be done, but to do what only they can do. They prioritize the most critical issues to solve and delegate the rest. And they also have a clear operating model where they leave the office early enough to spend time with their families and to work on themselves.