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.
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.
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.
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.
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.
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. 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.
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.
A big part of Vistage group meetings is working through a CEO’s challenges and helping them get clarity about how they can move forward with their business and their life.
We often find that the biggest obstacle to forward progress is not outside of us, but inside of us.
There are 4 fatal fears.
We also call these “Core Self-Limiting Beliefs”. They are learnt. We are not born with these fears. There are only 2 fear that we are born with: fear of falling and fear of loud noises. Every other fear has been learnt. (This does not make them less real or easier to deal with).
These 4 fears will drive a grasping towards something that will never fill me. If I am looking for completion outside of myself, I will never scratch my itch. I need to learn to be able to sit with my fear and anxiety and accept it and accept that I am human and imperfect.
Fear of Failure – “I Need Success”
Fear of Rejection – “I Need Acceptance”
Fear of Emotional Discomfort – “I Need Emotional Comfort”
Fear of Being Wrong – “I Need to Be Right”
Each of the fears can be accepted and allowed to exist within me. They will never go away. They will always be there, but I can accept them and not allow them to direct my actions and my words.
Waldemar Schmidt, past-CEO of ISS, a 250,000 employee global facilities services business.
Currently on the Boards of 28 companies, London Business School Advisory Board, Professor at Copenhagen Business School, Executive in Residence at IMD.
Author of 4 books including “The Job of the CEO“. Note: all book Royalties are donated to the Waldemar Schmidt Scholarship for (Brazilian) students at the international MBA Programme at Copenhagen Business School.
Highlights from the Interview
1:49 What is the Job of the CEO?
3:18 Know Products, Numbers, Customers
4:30 Management and Leadership
5:35 Taking Good Decisions
12:40 The Calendar of the CEO
15:07 What do you do after being a CEO?
16:45 Why did Waldemar step back from the CEO role?
18:10 Advice to a 55 year old ex-CEO
19:55 Networking as a CEO
21:18 How to Build Relationships with top Head Hunters
23:20 130 dilemmas that CEOs will face in life and business
23:50 The worst enemy of great leadership: Arrogance
The more choices you make throughout the day, the harder each one becomes for your brain. As it tires, your brain looks for shortcuts. The 2 most common decision avoidance tactics are:
to act impulsively (without seeing the consequences of the decision)
to procrastinate (do nothing)
Taking decisions takes willpower. Willpower is a form of mental energy that can be exhausted. It is like a muscle that gets fatigued with use.
There are a limited number of good decisions that one can take in a day. You might be a more effective decision maker than those around you, but you will still have a finite limit on the number of good decisions you can take in a day.
How do you Ration your decision making?
In the toughest days of my life as a CEO – dealing with the fallout from the collapse of Lehman Brothers and the collapse in bank lending at the end of 2008 and beginning of 2009, I hit my limits of decision fatigue. In order to get through the weeks and have energy to deal with the things that would allow us as a business to get through these tough times, I rationed my decision making.
The first step was to specify when and where I would take decisions. (Initially… when: on a Friday; where: only in my office). Previously my team would approach me at any time in the day, over coffee, over lunch, via email, via sms to request budget for small projects or permission to do some new activity. I felt responsable as leader for providing an immediate answer. It was killing me and leaving me with no energy to dedicate to building our future once we survived the immediate crisis.
“That’s great, bring it on Friday…”
I decided that I would take all budget decisions on a Friday between 9-12. If someone came to me with a request, I learnt to say “that’s great, bring it on Friday and we can take a decision”. It was hard at first, people were frustrated and angry and didn’t like my lack of willingness to engage at the time and place that they wanted. Over the following months, the people around me learnt to plan ahead and bring the information necessary to take a good decision on the Friday before they needed the decision.
It gave me peace at lunchtimes, in the break area, even in my office when someone opened the door on a Tuesday. It was a challenge to remove my sense of responsibility to decide at all moments. I learnt to be able to have a conversation where I could contribute ideas, but allow it to be clear that no final decision would be taken during this discussion.
When One decision is not really One decision…
My wife realised that one of her struggles with going to the gym is that it was never just one single decision. Each trip to the gym was a series of decisions: do I change at home or at the gym? do I shower at the gym or at home? will I eat there or not? which t-shirt will I bring? which trainers will I use today? which bag will I use? As the idea of gym came up, her brain knew that it would be exhausted by the series of 20 decisions. Her solution? She wrote down all the questions that she used to ask herself and wrote the answers. She make going to the gym become one simple decision, with a written template of pre-decided answers (shower=yes, trainers=blue, eat=there…)
In Vistage one of the first processes of change that we see in a new CEO member, is a greater awareness of which decisions they should be taking and which decisions they should not be taking.
Are you taking €10,000 decisions, €100 decisions or €1 decisions?
If you are taking the €1 decisions, your brain’s decision willpower will be depleted before lunchtime.
If you are taking the €1 decisions, your €10,000 decisions will not be receiving the analysis and impact that they deserve.
Jack Welch spoke about the size of decisions that he allowed himself to be taking. GE is a multi-billion business. As leader Jack allowed himself to only be taking decisions that could affect at least $50M of the market capitalisation.
Steve Jobs is famous for having a wardrobe full of identical blue jeans and black t-shirts. It was not a fashion decision, it was a conservation of decision willpower for the important decisions of Apple. Barrack Obama speaks about a similar challenge as President of the USA. He set up a structure around him that ensured that he would take no more than 5 important leadership decisions in a day.
The Structure of Leadership Decision Making
The Vistage Decision Model captures 60 years of experience of working with CEOs as they take operational and strategic decisions to lead their companies and their lives. There are 3 levels of Decision “skill” – Instinct, Judgement and Perspectives. There are 5 areas of leadership decision: Talent, Operations, Financials, Customers and Leadership Style.
I’ve been part of Entrepreneurs’ Organisation for the last 10 years and for almost any significant decision I have taken in the last decade, there are 9 people in my forum group who have helped me take a better decision. I would share with them:
the background to the decision
the why of the decision
what I’m seeking to achieve in my life
There is no major decision I’ve taken in the last 10 years that has not had at least those other 9 wise brains also looking at it. They are also giving me different perspectives, helping me think through:
Who I am
What what my strengths are
What my company strengths are and
How I can better play into the opportunities that I have
My question to you: “how many brains do you get involved in the big decisions you have to make?”
If it is just one brain (your own) then you are really going to struggle over your life as a business leader. Join Vistage, join EO, join Young Presidents’ Organization… Get into a peer group where others can give you multiple different perspectives, different ideas, different experiences that have worked for them in the past.
Get as many brains as you can to help you take important decisions, to help you think through the problems you face, to see how to seize (or say no to) the opportunities coming into your life.
Get access to brains to share your problems. Ask lots of questions and get as much coming back from other’s life experiences as you can.
There is a saying: “if you’re the smartest person in the room, find another room.”
Are you the smartest in the room? If you find that you are often the smartest person in the room, you’ve got to expand your network. Get out of that room and get yourself onto a bigger playing field.
Peer Group Organisations
Vistage (requirements: CEO of €5M+ turnover business)
The most relevant for me was number 9, not for the “decide issues quickly” but for “figure out what typically slows down your decision making and find ways to work around it”. I took some time to reflect…
What slows down my own (business) decision making?
…this is a brain dump of thoughts that come to me now…
Fear of being wrong
Fear of a better idea coming up tomorrow when we have already committed to this course
Feeling like I have to figure out all the implementation details now rather than allow them to be decided when they become necessary.
Feeling like I need to have a really good explanation of my decision that will impress others and have them see me as a “decisive visionary leader”
Feeling like I have to be 100% sure
Feeling like I should speak to a few more people and get their inputs first
Worrying that I have messed up similar decisions in the past (particularly people decisions)
Not seeing the costs of delaying the decision (both financial, and that it then hangs on my mind while I wait to actually commit to a decision)
Not being systematic about the approach to taking decisions
Not distinguishing between small decisions and big decisions and having a clearly different process for each
Not trusting myself to figure out how to make it work down the road
Not stopping to clarify exactly why the decision is important and how it relates to my vision and purpose
Here’s the four lessons from the article that I found most valuable and important to me right now. Numbers are from the Inc Article, Bold text is my own addition…
9. Maximize your time.
“The fastest way to maximize your time is to decide issues quickly. If you need to speed up your decision making, figure out what typically slows down your decision making and find ways to work around it. Pass responsibilities down as far as your people are comfortable. This is another way of speeding up your decision making, by giving others power to decide. You’ll often find that this motivates your employees, building their confidence and enthusiasm, and over time they will gradually accept more responsibility. Clarify your company’s vision, so everyone on the team intuitively understands when projects should be prioritized.”
—Jesse Robbins, founder and CEO of Orion Labs, an enterprise voice platform which secured $18.25 million last fall to expand its next-generation of services to the broader speech and voice recognition market, on track to be worth $18.3 billion by 2023
“It’s OK to be vulnerable. In high school and college, I spent a lot of time learning to be mentally strong, which can be a good thing, since resilience will wear down mountains given time. However, you don’t have to be strong all the time. Tell people when you don’t know, and when you’re worried. You’d be amazing how much help you’ll get, and how much of a connection that creates.”
—Mike Tuchen, CEO of Talend, a provider of cloud and big data integration solutions which saw its stock rise nearly 60 percent over the past year
“CEOs need people around them who are going to question their fundamental beliefs. These people should test and push, so CEOs are forced to question the decisions that they’re making and plan for the inevitable ups and downs that building a company will bring. If you surround yourself with coaches, prodders, and different thinkers, you will create a feedback loop that will fundamentally change your view of the world and make you a better leader.”
—Gordon Ritter, founder and general partner of Emergence Capital, an enterprise cloud venture firm which was recently named Venture Capital Firm of the Year by the National Venture Capital Association
“The one thing I wish my younger self knew was how to find a balance between acting smart and expressing achievements without hesitation. Stereotypes of women’s behavior can dominate perceptions, and as a woman in a male-dominated, STEM-related field, I’ve learned how to take a seat at the table and deliver my message so that it’s heard and respected.”
—Chris Mackey, CEO of MackeyRMS, a research management platform for investment professionals that has taken no outside capital/funding, with clients on its platform managing over $1 trillion in assets
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