Leading a Business: The 3+1 Roles of the CEO

We had an event this week in Madrid with Dan Wertenberg, a Vistage Chair from the USA as the speaker.

What is the Role of the CEO?

He shared an interactive and valuable 90 minute session with the gathered CEOs about the 3+1 roles of the CEO.

  1. Chief Strategy Officer
  2. Chief Team Builder
  3. Chief Sales Officer
  4. Lead the Financial Institution

The 3+1 “non-Delegatable roles” of the leader.

Chief Strategy Officer

The single most important question of strategy is “Who is our customer?” Dan shared the learnings from the PIMS study, done in the 1960s and 1970s in the US… looking at all the factors that lead to business success.

One of the big findings of the study was that a factor that repeatedly correlated with profitability – whether the business was the dominant provider to a market segment… essentially the #1 or #2 competitor in a market.

Strategy is fundamentally about deciding which market can we be the dominant, world class, excellent provider to this customer group. The question for a business leader: “who do we serve?” and also “who do we not serve?” Dan told us that every CEO should take their leaders out for at least 4 days each year to work together on defining with ever more clarity the profile of the ideal customer.

Chief Team Builder

The CEO is responsible for building the team. Dan shared with us that we as human beings are poor at selecting talent. Interviews are not a great way of predicting an individual’s future performance in a role.

We are not good selectors of talent, but we are all capable of identifying the factors that will make it unlikely that someone will succeed, or fit with the current team. Dan suggests that we actively de-select individuals who will not fit with our organisation, and then select only from those that remain.

The second part of team building is rapidly dealing with underperformance. If a CEO does not deal with underperformance (for whatever reason), it sends a message to the whole team that underperformance is acceptable.

Chief Sales Officer

An organisation that has the ability to scale and become great needs to have a sales process that is consistent, repeatable and structured. If there is a consistent sales process, then an organisation can scale up. If sales depends on certain individuals or the right day of the week… you cannot systematically grow the business.

The CEO should also personally play an active role in any large sales process of the company… involving themselves personally in some of the meetings.

The CEO should also ensure that every 6 months, they find a way of having lunch or dinner with the CEOs of the 10 biggest customers… to learn about them and to show the importance of their business.

Leader of the Financial Institution

Dan shared that a CEO is running 2 connected but somewhat distinct organisations… the operating business… and the financial institution behind the business.

As the financial leader, the CEO needs to ensure that there is a rolling 12 month projection of income statement and balance sheet. The CEO then needs to look at how we are performing against that plan. All variations are interesting… often we pay attention to negative variation… but the lessons that can be learnt from the positive variations are extremely important… as they are the source of identifying tactics that can be scaled up.

How To Handle The Painful Aspects Of Leadership During Economic Recession

I get a lot of value out of the Arete coach podcast run by Severin Sorensen, who has a background as a CEO and then as a Vistage CEO group mentor and coach (Chair).

I was interviewed by Severin in May 2021 for episode 1037 on his podcast: Arete Coach Podcast 1037 Conor Neill “Powerful Stories Stimulate Action”

Last week Severin brought together an experienced group of CEOs who are part of the Vistage Chair community.

How to Prepare for a Probable Recession

In the Panel Discussion, we explore:

  • What is a recession? [1:13];
  • What Does A Recession Feel Like? [10:38];
  • What 10 Things Would You Take Into A Hard Recession? [29:07];
  • Final reflections from panelists [1:13:23]; and lastly,
  • Severin summarises the session [1:17:50] and ends with a few inspiring quotes to consider.

This is episode 1095 of the Arete Coach Podcast with Severin Sorensen and his executive coach guests Michele Barry, Ben Griffin, Barry Goldberg, Phil Holberton, and Conor Neill.

In this episode, Arete Coach podcast presents a panel discussion of senior executive coaches that explores how to prepare for a Recession, and specifically, 10 things to take with you into a hard recession.

The purpose of putting this episode together was to provide valuable counsel for CEOs, business owners and coaches who are coaching other business owners on how to prepare for a probable recession, and one that may indeed be a hard recession.

Share this episode with executive coaches, business coaches, leadership coaches, business owners, entrepreneurs, CEOs, Key Executive teams, and anyone wanting to have a head start in preparing for what looks like more than a portent of stormy weather ahead.

What do excellent CEOs do? (according to McKinsey research)

A company has only one ultimate decision maker: the CEO.

The CEO is the only person in a company without peers. No other individual holds such a full and final responsibility for the company. The CEO is the most powerful and sought-after title in business, more influential than any other. The CEO takes the company’s biggest decisions. These decisions account for 45% of a company’s performance.

This power and influence comes with a heavy burden.

The role of CEO can be all-consuming, lonely, and stressful. Just 3 out of 5 new CEOs live up to expectations in their first 18 months… and many CEOs struggle with their quality of life (health, family relationships, friendships) in the face of the pressures they face.

I run Vistage in Spain. Vistage is the world’s leading CEO coaching organisation. Over more than 60 years, Vistage has worked closely with CEOs to take and implement better decisions which enhance their performance and increase their quality of life.

The following post draws heavily from a recent McKinsey article “The mindsets and practices of excellent CEOs“.

The Biggest regret of CEOs

I spend time with hundreds of CEOs each year. They are good people and they want the best for the good people around them. This makes it extremely personally challenging for them to deal with underperformance. They like the people around them. They want to give them lots of opportunities. They feel that it is a personal failure when someone close to them repeatedly underperforms expectations. They give more time. They allow for environmental factors. They wait and hope.

The single biggest regret of CEOs is not dealing quickly with underperformance.

In my work with CEOs through Vistage, over half of all of our work is about the current and future performance of the people and teams that surround the CEO. We challenge CEOs to stop waiting for underperformance to fix itself.

The Differentiator between Great and Good CEOs

According to McKinsey, the distinction between good CEOs and the great CEOs is the ability to focus.

Great CEOs place “big bets”. They focus on the top 3-5 most important initiatives. They dedicate 90% of their time, energy, resources to the 5 most important projects. They say “no” often. They don’t allow their time to fill up with many different activities and different priorities.

The Good CEOs avoided this level of focus. Their prioritisation of what is truly important is less clear. They are involved in many initiatives. They allow their agenda to fill up and try dedicate a couple of hours each week to the most important projects. They try to fit the important initiatives in around their “day job” of running the company.

The Great CEO has delegated the running of the company to an effective leadership team. They have made themselves unnecessary for operating the company today, so they can dedicate themselves to building the company of the future.

Jeff Bezos says that he spends 5% of his time running the company, and 95% of his time building the future company.

The Job of the Great CEO (according to McKinsey)

What specific behaviours can make current CEOs most effective? This is a summary of the McKinsey article linked above.

The Great CEO’s job has 6 main elements.

  1. Setting the Strategy
  2. Aligning the Organization
  3. Leading the Top Team
  4. Working with the Board
  5. Being the face of the company to external stakeholders
  6. Managing one’s own Time and Energy

1. Setting The Strategy

Objective: Focus on Beating the odds…

  1. Vision: reframe what winning means, where do we want to be in 5, 10 or 15 years?
  2. Strategy: make bold moves early
  3. Resource allocation: stay active, top performers actively & quickly move resources to their strengths

2. Organisational Alignment

Objective: Manage Performance and Health

  1. Talent: match talent to value
  2. Culture: go beyond employee engagement
  3. Organisational design: combine speed with stability

3. Leading the Top Team

Objective: Put dynamics ahead of mechanics

  1. Teamwork: show resolve
  2. Decision making: defend against biases
  3. Management processes: ensure coherence

4. Board Engagement

Objective: Help directors to help the business

  1. Effectiveness: promote a forward looking agenda
  2. Relationships: think beyond the meeting
  3. Capabilities: seek balance and development

5. Being the face of the company

Objective: Center on the long-term “Why?”

  1. Social purpose: look at the big picture
  2. Interactions: prioritize and shape
  3. Moments of Truth: build resilience ahead of a crisis

6. Managing one’s own time and energy

Objective: Do what only you can doceo

  1. Office: manage time and energy
  2. Leadership model: choose authenticity
  3. Perspective: guard against hubris

If you liked this post, you will also like The CEO’s Guide to Boards and The CEO’s 7 Leadership Laws During Times of Uncertainty.

Photo credit: fauxels on Pexels.com, Liza Summer on Pexels.com, SplitShire on Pexels.com

What makes a Great Vistage Speaker? Michael Canic shares experiences from over 450 speaker sessions

This video is for Vistage Speakers, and is a briefing video about what to expect as a Vistage speaker.

About Michael Canic

“Professionally, I love working with committed people and making a difference. When I get to see the before-and-after it’s tremendously rewarding.”

Michael Canic

Michael Canic is a business strategy consultant and regular Vistage speaker on the subject of Relentless Consistency.

Michael’s Resources:

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