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.

photo of woman wearing eyeglasses

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

despaired woman touching head in room

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.

binocular country lane filter 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

I was listening to Shane Parrish interview Adam Grant on his knowledge project podcast last week.

Adam was speaking of the loss of rationality in many public domains. Politics, gender, science, global warming, race relations… are all domains where it has become dangerous to ask questions or engage with open curiosity.

As Adam was speaking about this he gave us a question “what evidence would change your mind?”

If I can’t answer this question, it is possible that I have become too emotionally attached to my position.

I asked myself: what beliefs do I hold to such a degree that no evidence would change my mind?

It is not a bad thing to hold strong beliefs… I believe it it a vital ability to develop faith in the universe. I decided to believe that the universe is a good place. I decided to believe that people are trustworthy. These are decisions of a stance I take towards the world.

The problem comes when I pretend to be rational when my belief really doesn’t come from reason. You could prove to me that people aren’t trustworthy and I still would prefer to act towards the world as if people are trustworthy. I don’t really care about the evidence. As long as I recognize this as a “stance towards the world” rather than an evidence-based rational decision, I will be ok. However if I want to convince others, it’s important to realize on what basis I hold the belief.

Adam Grant on Advice

Adam shared a story of someone asking him for advice… and as soon as Adam started sharing his opinion he realized that the other person didn’t want to hear it. Since those early days of his career, Adam has become much more careful in offering his opinion.

When someone comes to Adam for advice:

First: Ask them for their Pros & Cons? Their Risks & Rewards? Get their perspective on what is important and what challenges they see. Get this first.

Next: Ask “Why did you come see me?”

Did they really come for Validation? Or Approval? Or are they really open to have you test their thinking?

Be careful about offering help when the other is not open to another perspective.

Did you come to visit this blog to challenge your thinking? Or to confirm your existing beliefs? 😉

What matters most in the gym? The hours you spend or the reps on the weights?

In the areas where you must be highly competent to succeed in your role: are you accumulating hours or reps?

Do you just do your job or do you spend time practicing the important skills that make you effective?

By practice, I mean “deliberate practice” – setting an intent, taking action, getting feedback, reflecting on original intent vs actual result, seeking new approaches… and repeat the cycle.

Thinking about writing is not writing. Publishing an article and listening to reader feedback is how to do reps.

Thinking about exercise is not exercise. Lifting the weights, pushing through discomfort, sweating… is exercise.

Thinking about difficult conversations is not having difficult conversations. Having challenging conversations (for you and for the other) and seeking productive conflict is how to do reps.

Thinking generates hours, but does not generate reps.

Be careful of equating hours (or years of experience) as competence.

Charlie Munger on uncommon sense…

Competence – you can only be trusted as competent if you clearly understand the limits of your competence. The great danger of experts is they forget the limits of their expertise – “it is better to trust a man of 130 IQ who thinks he is 125 IQ, than to trust a man of 180 IQ who thinks he is 200 IQ” Warren Buffett

Inverting – if you want to make life better, think of what you would do to make life worse. Charlie was an aviation meteorologist during WWII. His task was to give weather briefings to pilots. His role was unclear until he thought of the inverted perspective “if I wanted to kill pilots as a meteorologist, what could I do? Flying with iced wings, flying in conditions they will be unable to land.” This really clarified for him the important aspects of his role in keeping pilots alive. In our own lives, asking “how would I really make my life worse?” can be a valuable perspective on what really matters.

Collector – be a collector. How many collectors do you know who are unhappy? Identify things or experiences that you enjoy collecting and become a curator of your collections.

Integrate ideas between domains – most people focus on details within the idea (especially academics), few people look at the interaction between big ideas. That’s where there’s not much incentive in academics, but it’s very interesting for investing money.

Occam’s razor- go for simple… with a proviso that was initially shared by Einstein “Everything should be made as simple as possible but not more so” Einstein. Anywhere there is a “lollapalooza result” (Charlie’s term for a hugely positive and rapid outcome)… look for a confluence of causes. Academic experts find one cause. To a man with a hammer, everything looks like a nail. There are rarely just single causes for high impact outcomes.

The problems of Social science– all chemists can answer “where do the rules of chemistry not apply?” In the high temperature plasma state. how many social scientists can answer “if you want to sell more should you raise or lower the price?” Where does this rule not apply? 1 in 50 will say “luxury goods!” Many social scientists forget to think of the exceptional cases.

Update… a summary of this post in a #shorts video

More on Charlie Munger’s thinking process

Charlie Munger’s Inverse Thinking Process

Short term Happy vs Long term Fulfilled

If you are a leader, you need to work on developing 2 skills in the people around you:

  • Influence and
  • Decision Making.

The Importance of Influence Skills

Without the people around you learning how to influence others, they will always need your involvement to get anything done.

Read more on Influence

The Importance of Good Decision Making

Without the people around you taking good decisions, you will always need to step in to stop disaster from happening.  In the IESE MBA program we have a course called “Analysis of Business Problems”.  We teach a 6 step process for business decision making:

  1. What is the Problem?
  2. What are the Criteria?
  3. What are the Options?
  4. Compare Options to Criteria
  5. Select Option
  6. Create a Plan

Read more on Decision Making

Life is too short to figure everything out on your own. 

Humans spend the years from birth to 12 learning how to survive.  Our parents have a vested interest in helping us develop the Stop there: we merely survive. 

We live in a highly complex society.  There is intense competition for status in whatever hierarchy you compete in. It doesn’t matter whether you choose to compete or not, society and humanity are designed to compete for resources.  It is not those born strong that rise to the top of status hierarchies in today’s human society.  It is those who learn to use their capacities most effectively and adapt quickly to changes in the environment.  

There are two ways we learn to make positive progress in this society – 1) our own experience, or 2) through the experiences of others.  Our own experience is a slow and expensive way of learning. 

If I am to choose to learn most effectively, through the experiences of others, I must learn the art of meaningful conversation. Through my work with Entrepreneurs’ Organisation forum and Vistage groups I have worked extensively over the last 15 years on creating the type of meaningful conversation that allows one to learn from the experiences of another.

I’m sharing 4 ideas that I took from Jordan Peterson’s book the 12 Rules for Life when I read it this year.

“Your current knowledge has neither made you perfect nor kept you safe”

Your knowledge is insufficient. You must accept this before you can converse philosophically, instead of pushing opinions, convincing, oppressing, dominating or joking.  

“Assume that the person you are listening to might know something you don’t”

It is necessary to respect the personal experience of your conversational partners. You must assume that they have reached careful, thoughtful, genuine conclusions (and, perhaps, they must have done the work that justifies this assumption). You must believe that if they shared their conclusions with you, you could bypass at least some of the pain of personally learning the same things (as learning from the experience of others can be quicker and much less dangerous).

It takes conversation to organise a mind 

“people organize their brains with conversation. If they don’t have anyone to tell their story to, they lose their minds.” The input of the community is required for the integrity of the individual psyche.    

“Life is short, and you don’t have time to figure everything out on your own” 

They say Aristotle was the last man who knew everything there was to know. Since the time of Aristotle (over 2300 years ago) society has become too complex for any one individual to know all that is known.  

When I was in school, I took huge value in solving from first principles. I would prefer to solve mathematic problems from first principles and avoid using formulaic recipes that allowed you to shortcut to a solution.  This was symptomatic of my whole approach to life. If I hadn’t figured it out myself, I didn’t value the knowledge.  There is a heroic valor to this approach, but it is dumb heroics.  

If you liked this post, you will also like How do I become a better listener and 50 Questions for better Critical Thinking.

Check out the full list of books I read in 2020.

 

 

Sam Reese, CEO Vistage

This article by Vistage CEO Sam Reese was originally published on the Vistage blog. Over his 35 year career as a business leader, Sam has led large and midsize organizations and has advised CEOs and key executives of companies all over the world.

Over to Sam…


The COVID-19 pandemic presents new challenges for leaders, but it also offers fresh opportunities to learn how to navigate their companies through uncharted waters. As employees accept the current crisis and adjust to new environments, routines and protocol, they look to leaders for transparency, stability and conscious decision-making.

Through coaching more than 100,000 CEOs of small to midsize businesses over 60 years, Vistage has identified 7 fundamental truths about great leadership. The following laws ensure solid decision-making through these unpredictable times and beyond: Free guide to help lead your company through challenging times.

A CEO's Guide to Leading in Challenging Times

1. Reject shortcuts to growth

Great leaders know leadership excellence is a challenging, continuous journey that requires hard work and determined attention.

Sam Reese

Great leaders know leadership excellence is a challenging, continuous journey that requires hard work and determined attention. They reject shortcuts and take ownership of their development, especially in times of crisis. They bring rigor and grit, working hard to hone their expertise and continuously improve. They recognize it is important to keep an organized rhythm of communications and work progress that will keep their businesses busy and aligned during a crisis.

2. Carve out space to work on the business

Successful leaders routinely carve out time and space away from the business to reflect, acquire new knowledge and focus on strategy. This discipline allows them to gain the clarity they need to navigate the day-to-day challenges and understand the environment outside their business. The stress of leading through a global pandemic requires a leader to pause and regroup.

3. Challenge your thinking with fresh perspectives

Great leaders seek diverse perspectives on important decisions from trusted peers. They actively work to combat insular thinking and confirmation bias. They find other CEOs and business leaders who’ve tackled similar issues but in different industries. These peers understand the nuances and challenges of the role but bring fresh perspectives, unhampered by institutional knowledge. Now more than ever, when a group of diverse leaders learn from one another, this effect is amplified. CEOs can share the real-time learnings that come from leading a company through a pandemic.

4. Stoke curiosity

World-class business leaders are high on curiosity and low on ego.

Sam Reese

World-class business leaders are high on curiosity and low on ego. They are inquisitive, welcome new ideas from trusted sources and eager to explore. Vulnerability is viewed as an asset, and they are the first to admit they don’t have all the answers. They ask questions to seek input and pressure-test their assumptions, so they can come to the best decision for the business – not to prove their own point. These trying times present the opportunity to be open to and apply new ideas.

5. Apply discipline to decision-making

High-performing leaders follow a disciplined approach to decision-making. They use a systematic process that takes into account their instincts; judgment based on experience and data; and perspectives from peers, mentors and employees. The key is to focus on what can be done today, not necessarily developing long-term strategies that may need to be changed after a crisis. Focus has to remain on mission, vision, purpose and values as the North Star. With these values as the foundation, leaders can make decisions with speed, consistency and accuracy – even under the heavy pressures of a pandemic.

High-performing leaders follow a disciplined approach to decision-making.

Sam Reese

6. Find a trusted guide

Successful leaders view a coach or mentor as a critical component to leadership excellence, especially in stressful times. They value a trusted guide who challenges their assumptions, identifies their blind spots and holds them accountable. The most effective coaches and mentors approach the CEO as a whole person, not just the leader in the corner office. Leaders who take a comprehensive approach to development that includes feedback from trusted peers, effective mentoring, and insights from subject-matter experts continuously outperform their competitors.

7. Rise by helping others

Great leaders help others think critically through their challenges and in the process fine-tune their own decision-making skills. Leaders also recognize relationships matter even more during a crisis. Whether these relationships are with coworkers, customers, suppliers, partners or investors, CEOs and decision makers help others as they remain in constant, transparent communication. Accessibility is the No. 1 quality employees look for in their leaders during a time of crisis. By staying available, you will become acutely aware of the challenges that need to be addressed and convey a sense of stability and continuity during a crisis. High-integrity leaders leave a legacy. The way you manage in a crisis like this will be a key part of the legacy you leave and an example for those who follow in your footsteps.

The coronavirus has brought disruption and caused unprecedented challenges for CEOs, but it can also inspire innovation and lead the way to a company’s future success when life returns to normal. COVID-19 shines a light on the challenges of leading through change and crisis. By using these seven laws and providing clear communication, decision makers can take effective action for their companies today and tomorrow. 

Get the Guide

If you liked this post, you will also like Why you should be in a Mastermind Group and Conor Neill’s Webinar for IESE Business School: How to Lead in Uncertain Times.

This video responds to the question: “I want to change career, but I am worried about the risks”.

Rather than worry about the possible mistakes you could make in changing, reflect on the story you want to be able to tell about your life when you are 80 years old. Will you regret not having tried?

The great danger in our lives are not the errors of commission, but the errors of omission… the opportunities we never even spotted along the way. Warren Buffett says he worries far more about the investments that he never spotted rather than the investments that he made that didn’t work out.

Managing Your Own Career

It’s up to you to identify your place in the world and know when to change course.

5 Thoughts on Careers from Peter Drucker:

  1. Success is at best an absence of failure
  2. People outlive organisations
  3. People are mobile and will move
  4. We must manage ourselves, and help others manage themselves
  5. Each worker must think and behave like a CEO

Further Reading

If you enjoyed this article you will also like Purpose and Vision for your Career and Why Business Leaders hire Coaches.

I have a lasting interest in how people make good decisions, especially when many people are involved, and many people are affected by the decisions.

Currently reading the book “Crucial Conversations“. Towards the end of the book, there is a section on moving from a dialogue towards concrete actions. The authors say that there are 4 methods of decision making.

The 4 methods of decision making:

  1. Command – One person decides. It might be the main authority figure, or that individual might delegate the power to decide to another specific individual.
  2. Consult – A person given the power to make a decision first consults widely before making a decision. Note: you can listen to someone’s opinion without taking on an obligation to use that opinion in your decision.
  3. Vote – The group votes.
  4. Consensus – we negotiate a position that everyone can agree to. This can take a long time, and can lead to many compromises on the decision being agreed.

When choosing which way to decide there are four questions to ask:

  1. Who cares? – Don’t involve people who don’t care
  2. Who knows? – Don’t involve people who cannot add value.
  3. Who must agree? – Who could block the implementation later on if not part of the decision process today?
  4. How many people must be involved? – The fewer the better.

If everybody is responsible, nobody is responsible. Great teams assign clear individual responsibilities and hold people to their commitments.

A leader should be interested in developing 2 competencies in the people within their organisation:

  1. Good Decision Making (to take good choices about how to use the resources of the organisation to achieve strategic plans)
  2. Influencing Skills (because if they cannot influence their peers, people will have to involve you every time…)

If your team doesn’t have #1 they are taking poor decisions.  If your team doesn’t have #2 they cannot execute without your support (you will be sucked in to every initiative).

In order to take Good Decisions, you need to ask great questions.  

Most people ask few questions and rapidly jump to a solution.  Great decision makers ask many questions and get many perspectives before they commit to a decision.  Here’s a set of great questions…

This set of questions was inspired by the Global Digital Citizen Foundation and by Vistage Issue Processing where we help leaders develop the ability to ask great questions to help leaders think more deeply and see new perspectives, clarify objectives and take disciplined effective action.

The Ultimate Guide to Great Questions for Critical Thinking

Divided into who, what, where, when, why, how…

Who

  • …benefits from this?
  • …is this harmful to?
  • …makes decisions about this?
  • …is most directly affected?
  • …have you also heard discuss this?
  • …would be the best person to consult?
  • …else has overcome a similar challenge?
  • …will be the key people in this?
  • …deserves recognition for this?

What

  • …is the impact on you?
  • …is the impact on those close to you?
  • …are the strengths/weaknesses?
  • …is another perspective?
  • …is another alternative?
  • …would be a counter-argument?
  • …is the best/worst case scenario?
  • …is the most/least important?
  • …can we do to make a positive change?
  • …is getting in the way of taking action?

Where

  • …else would we see this problem showing up in your life?
  • …else have you overcome this type of challenge?
  • …are there similar situations?
  • …is there the most need for this?
  • …would this be the greatest problem?
  • …can we get more information?
  • …do we go for help with this?
  • …will this idea take us?
  • …are the areas for improvement?

When

  • …is this acceptable/unacceptable?
  • …would this benefit you?
  • …would this cause a problem?
  • …is the best time to take action?
  • …will we know we’ve succeeded?
  • …has this played a part in your past?
  • …can we expect this to change?
  • …should we ask for help with this?

Why

  • …is this a problem/challenge?
  • …is it relevant to your goals?
  • …is this the best/worst scenario?
  • …are people influenced by this?
  • …should people know about this?
  • …has it been this way for so long?
  • …is there a need for this today?

How

  • …is this similar to _____?
  • …does this disrupt things?
  • …do we know the truth about this?
  • …does this benefit you/us/others?
  • …does this harm you/us/others?
  • …do we see this playing out in the future?
  • …can we help you?
[Edit: this poem was shared by my Dad upon receiving this post]

I Keep Six Honest Serving Men
Rudyard Kipling
I KEEP six honest serving-men
 (They taught me all I knew);
Their names are What and Why and When 
 And How and Where and Who.
I send them over land and sea,
 I send them east and west;
But after they have worked for me,
 I give them all a rest.

I let them rest from nine till five,
 For I am busy then,
As well as breakfast, lunch, and tea,
 For they are hungry men.
But different folk have different views; 
I know a person small—
She keeps ten million serving-men,
Who get no rest at all!

She sends’em abroad on her own affairs,
 From the second she opens her eyes—
One million Hows, two million Wheres,
And seven million Whys!

The Elephant’s Child 

More Great Questions for Vistage Groups

Great Questions for Teaching & the Learning Process