- Identity: CEO X
- Company worth: $250 million
- Avenue of arrival: Promoted two years earlier, following the exit of then-current CEO
- Employment history: Worked for company 10 years; led largest business unit prior to promotion
- Traits: Intelligent (holding advanced degrees); problem-solver; consensus-builder
- Leadership style: Extremely busy; completely immersed in all aspects of the business; arrives to meetings consistently late, but is great with clients, a natural extrovert
- Issues: Direct reports have been slow to be promoted; company has had moderate growth
- Identity: CEO Y
- Company worth: $10 million
- Avenue of arrival: Founder (currently leads 100 employees)
- Employment history: Present since inception (currently owns 90% of company)
- Traits: Hard-working; bright (and highly educated)
- Leadership style: Beloved by clients; attends meeting after meeting (mostly on-time) daily
- Issues: Receives 15 direct reports; company has recently experienced flat to moderate growth
- Identity: CEO Z
- Company worth: Startup; very little revenue
- Avenue of arrival: An idea turned into action
- Employment history: In business a few months; individually executes deliverables; solely executes financials
- Traits: Diligent; goal-oriented; smart (and holds MBA)
- Leadership style: “One-man band”
- Issues: Although the objective is to replicate over time, bound by what one human can produce
The common issue faced by all three leaders is that each is mired in operations; in short, each CEO is working in the business rather than for the business. The following solutions provide guidance to leaders on all levels so that they are able to effectively direct their companies.
Decide whether you are a leader or a manager. Leaders provide the vision, strategy and inspiration; then engaged employees carry out the company objectives. As a leader, you develop management accountability that results in employee accountability. Ask yourself the following questions:
- Do you have fewer than five direct reports?
- Do you spend less than half of your work week on deliverables or operations?
- Do you have a “Number 2” that can run the business if you left?
- Do you know the strategic multiples in your market?
- Do you believe that your employees are able to articulate your corporate goals?
If you answered “yes” to all five of the above questions, then you could be defined as a strong leader. If you answered “no” to any of them, then you have some room for development.
A manager is defined as a person who is responsible for controlling or administering all or part of a company or similar organization. In this definition, “controlling” is the key distinguishing characteristic between a manager and a bona fide leader. Unfortunately, many CEO’s are more comfortable managing rather than leading because they feel a need to control the minutiae of the businesses. In the original snapshots above, all 3 CEO’s are immersed in the business primarily because they lack the confidence in themselves to “let go” and cede control.
A leader is defined as a person who leads or commands a group, organization, or country. The key word in this definition is “command.” Someone in command ensures the execution of the mission by directing and delegating others to carry it out. When you are in command, you communicate. A leader is constantly communicating the vision and is holding others accountable for carrying out the mission. A leader is not in control, but in command of others who get the job done. Therefore, you have to ask yourself: are you in control of your business or are you in command of your business?
Key learning point: Be in command of the vision, not in control of the mission
Decide whether or not you are a capable decision-maker. The biggest hurdle most leaders have to overcome is inefficient and untimely decision-making. Are you slow to make decisions? How are decisions made in your company? Are you too quick to make decisions?
In the following brief scenario, are there examples of true leadership and good decision-making?
A client makes contact with the CEO to discuss various unresolved issues. The CEO agrees to speak with the client, listens attentively, and unilaterally decides to solve the problem by promising additional resources; in addition, discounts are offered for work that has already been completed. The CEO feels satisfied with the outcome. The client is temporarily happy, and the CEO is freed up to move on to other important business opportunities.
Does this constitute a well-executed decision? Is this a “control” decision or a “command” decision?
Perhaps the CEO could have been made aware of the client’s issues through management. The CEO could have huddled with his team to receive full reports, pose questions, and seek advice about how to best resolve the client’s concerns. Then the CEO could have decided on a measured solution, and directed the managers to contact the client and offer a delineated plan. The offer could have been accepted by the client, and in the end, every stakeholder would have played an appropriate and satisfactory role.
Key learning point: Play your role as leader; let others play their roles
Decide whether or not you hold employees accountable for their actions.
Individuals who live their lives and go to work yearn to be liked by their family, friends, colleagues, and employees. Parents love their children, but sometimes they can become friends rather than role models. In short, everyone loves to be liked. In many cases, company leaders—because of their human desire to be liked—experience difficulty holding people accountable. As a result, they become fearful with regard to making the hard decisions that are in the best interest of the company.
Another reason for the failure to hold employees accountable is because leaders erroneously think they are smarter than everyone else in the company. As a result, the CEO ends up performing the duties of individual employees. This brand of CEO is an “enabler”. If you are running a popularity contest, or, if you believe you are the smartest person in the room, you will not be successful leading a business to a higher value. During your leadership you will be overworked, frustrated with your employees, and always thinking that you are on the verge of getting “over the top” with the next big (mythical) client.
The following scenario will clarify these ideas:
An extremely loyal employee has worked in a company for over a decade, holding many jobs during the tenure, earning a continually escalating salary. As the company expanded, the employee has been constantly transferred from desk to desk, but the CEO has never really been completely satisfied with the work. The CEO has rewarded the employee for longevity rather than performance. The CEO makes decisions under the false assumption that the new job title will afford the employee the opportunity to become more productive and therefore enhance the company. In truth, the employee is mistake-prone and often refuses to own errors. Since the CEO has known this individual since the company’s founding, issues are fixed by others, covered up, or even ignored. At present, the employee manages others simply based on seniority. The group is average at best and turnover is an issue.
There are a number of solutions to this problem; however, using the fear of being disliked to inform decisions and doing an employee’s job to avoid conflict are never the right answers. The answer will be found by making decisions in the best interest of the business. Employees who do not achieve will be measured and motivated to improve, or they will move on. In the end, respect will be achieved.
Key learning point: Run your business, not a popularity contest
For the Business, not in the Business:
By following these steps you will:
- Move from managing to leading
- Make decisions in the best interest of the company
- Engage your employees
- Attract better talent
- Focus on vision
- Expand business opportunities
- Enhance company value
- Work for the business
(Photo by Alex Wong)