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Founder CEO Leans In

From time to time, I blog about situations from which my followers can learn about leadership. I use no names. I stay generic. But I put them near the table as an observer.

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In a prior post, we described homework assignments given to candidates for the position of President and possible successor to the Founder of a company. The story has evolved in interesting ways.

Each of the candidates signed NDAs and received the equivalent of a board book with financials and a summary of the strategic plan. They met on several occasions with the founder/CEO, C-suite execs and board members. There were dinners with spouses as well.

Each candidate was asked to submit their own summary strategic plan and comments about the challenges and positives they see in working with the Founder if selected as President. All candidates submitted documents worth reading, but one stood above the others. Hers, yes hers, was more creative, more insightful.

They each also presented their documents orally. Again, the female candidate was the one who was “awesome” on her feet (a requirement for the position). Then there were conversations between the finalists and those who may have considered themselves passed over, extensive reference checks and a final round of conversations with board members and the Founder.

This organization does have women in some key positions, including one in the C-suite. But it has been described by some as a “guy culture,” for example, no-holds-barred arguments in meetings and no-holds-barred feedback for underperformance, often vocabulary and analogies not common in polite society I am told. With all of this, there is a great spirit in this demanding, hard-working culture. But some considered it a real risk to the “glue” and to performance to have a woman in the top job. This was expressed during the search. What did they decide?

They have offered the position to the woman. The Founder and the most senior participants in the decision say it was unanimous. No second guessing. She “leaned in” and won them over. They leaned in with the selection.

Would I have predicted this outcome? At the outset, it certainly seemed less than 50/50. The outcome reinforced my experience with more than 50 CEOs during my career: they care more about the future of the enterprise than anything else and, if they can get comfortable with a second in command, male or female, they will make a choice they believe meets that challenge.

A very few of my CEOs have been “accidental misogynists,” unaware of the subtle ways in which their behavior and those of others in their organizations dispirit (and worse) high performing women; more than a few are passive in leaving no stone unturned to recruit star women to the C-suite and among them potential successors. There is still work to be done in getting the topic out in the open, even where females occupy several of the seats at the top table.

But I am encouraged by instances like the one described above. I am so very proud of the Founder, his process and his choice.

That’s just my view. What’s yours?

Entrepreneurs, CEOs and Boards

Two comments in apparent conflict from a recent meeting of our CEO advisory board:

“One of the few things I regret is not having my board years earlier,” said one member. Why? “They made me do things I never would have done on my own and they were right.”

“My founder wants us to have a board, but she has in mind her offspring, our current professional service providers and someone she just met. Will they add value or cause me more work and more angst?” asked another.

The first company is majority owned by a private equity firm, very supportive of the founder/CEO but with clear ideas of how to think like and prepare for being a large (someday public) company. They have been active in discussions about strategy, topgrading the leadership team, Sarbanes Oxley, financial reporting and much more. They have been personally involved with candidates for the top positions. And the company has grown substantiallay in both top line and EBITDA even in the two years of ownership. It is a symbiotic relationship.

The second company is at an inflection point from a small business to one that may do $200 million in a short while, may have two geopraphies widely separated, each with its own quasi Division CEO. It is a multi-location, project-based business with big bets and a brand to protect in a “glass kitchen” industry (the leaders know a lot about each others’ companies). The CEO would do well to have a board like the one above. But, as the first CEO added: “Make no mistake — having a board is a lot of work and presents a lot of difficult decisions. Your team will have a lot of work, not just you. But it is worth it with the right board. And a nightmare with the wrong board.”

The results are not in yet, but the second CEO is likely to create an advisory entity populated by subject matter experts and people with smart rolodexes. Perhaps it will meet quarterly. Perhaps the people identified by the founder can be kept in the loop with greater frequency and on selected topics. We will see what the CEO can work out with the founder.

Even individuals starting out in business need their own “personal board of directors” and the board members need to know they are regarded as just that. All the more reason for an entrepreneur CEO to have a real board as early as possible.

That’s just my view. What’s yours? Please leave a comment.

Homework for the Candidate President

Hiring someone to lead an organization, even with a terrific recruitiment/assessment process is a crapshoot (technical term). “You do everything right and your odds of a fit for the long term are 50/50,” said one of my CEO Group members to another.

The process may include behavioral interviewing, serious (third party) reference checking and assessments, dinner with spouses, a golf or other outing, interviews of candidates by senior executives and board members and on and on for the top position. And they are all usually both necessary and worthwhile. But something else is incredibly revealing: a homework assignment .

One CEO recruiting a president/potential successor has had the final candidates sign an NDA, disclosed financials and the stratplan and given the candidates one week to turn in these homework assignments:

- critique of the stratplan
- their own vision for 2016
- their first-90-day milestones
- a brief essay on the rewards and challenges of being #2 to this specific CEO

Those who won’t play are probably not worth pursuing. And, when I have seen this approach in the past, it has been revelatory of who can and who cannot read financial statements, think strategically, see the business as a whole, think outside the box. Later this year, I will post about the results of this most recent activity because the talent market is different from a few years ago.

That’s just my view. What’s yours. Please leave a comment.

Instant Replay for CEOs (Part 2)

It is my mission to share insights from coaching while maintaining confidentiality. Here is one recent moment that should have value to bosses everywhere. I will follow in a separate post with a second one.

My clients come in two “flavors:” those who instinctively consider the “audience” before or as they speak and those who are focused on themselves first.

John is CEO of the overseas business of an American service business. He is also the eminence grise in meetings with senior executives of prospective clients. He has a long legacy of winning over prospects because of his extensive experience, knowledge (often far more than the prospect’s), quick mind and ability to “deliver the firm” in service to the prospect if they become a client. However, he is nowhere near world class in helping the client see the value in the team he brings to the table. He is focused too much on his own role and performance.

I asked him to replay a recent prospect meeting. I asked what impression was left with the client as to the quality of his team leader; what had he said that conferred on the team leader the imprimatur that only he could give? A quick study, he said: “I could have expressed my confidence in the team leader, told them I have worked with him for almost a decade, that he is the best of the best and represents the first step in my promise: to deliver the firm. But I didn’t. I was too focused on doing really well in my own role.”

Instant replay for CEOs? Just as valuable as in sports.

That’s just my view. What’s yours?

Instant Reply for CEO Clients

It is my mission to share insights from coaching while maintaining confidentiality. Here is one recent moment that should have value to bosses everywhere. I will follow in a separate post with a second one.

My clients come in two “flavors:” those who instinctively consider the “audience” before or as they speak and those who are focused on themselves first.

Harvey leads a large, public company. He is so smart and quick that he is steps ahead of his direct reports in almost every conversation. Since he has little time between his myriad meeetings, he arrives at the next meeting and dives right into topics with them. I asked him to replay one of these moments, asked him to describe how well the subsequent time was used and the likely impression it left with his team.

Key words in his response: confusion, off-topic air time, blind alleys, demotivation of key players. Suggestion (in addition to having others create and socialize agendas for some meetings): take 3 minutes before walking into a meeting; decide what you want the people to believe, feel and want to do do when it is over; decide how to open the conversation with a great question. Feedback: “I have not yet adopted this fully but when I do, it works — the time is much better spent. And I have been doing my own instant replay after some meetings.

Instant replay for CEOs? At least as valuable as in sports.

That’s just my view. What’s yours?

Leadership in 2013

Some baseball teams have won the World Series playing “small-ball (hit and run, stealing bases, trying to get singles and doubles).”  Others have played “big ball (stuffing the roster with hitters who can score with one swing of the bat and preferably with runners on base).”Any of them who has won has “left it all on the field,” taken risks along the way and changed a lot in real time to keep the opponent off balance.

My CEOs are facing what some see as the new normal: uncertainty in business investment, government policy, banks willing to lend and A+ talent willing to move. For the most part they are playing small-ball though with an implicit strategy.

One leads a global industrial company whose customers are at low capacity utilization and scratching for every cost saving; whose suppliers are so stretched financially that deals in the works have been shelved; whose key “keepers” have not seen incentive comp awards for over a year.

His response first focuses on small-ball: to evaluate risk of every new contract every week, adjusting more precisely the green-light criteria and the risk premium by geography, customer/supplier and raw material prices. This results in avoiding some new bets, making others, pruning existing businesses and incrementally building out available financing to keep the wolf from the door. The exceptions (big-ball) start with top-grading: hiring world class athletes for several key executive positions; beginning to execute a strategy that selectively green-lights high profit/reasonable risk projects where the company not only provides its basic services but also acts as lender/investor (a differentiator in this global economy).

Another CEO in a home services businesses has followed a similar path; finding ways to deliver more for less, hiring a street-wise direct to consumer marketing expert to use the thousands of marketing decisions each week as a laboratory for improving the media mix and the results; extending the footprint into contiguous geographies with little or no new capital at risk; modulating the incentives for each business unit head. Exceptions include hiring a COO to take on some of the CEO job and to bring fresh eyes to existing businesses, buying a going concern company in the same business in a non-contiguous city with a plan to more than double the initial sales.  

I could list several others, both entrepreneurs and corporate chieftains. In addition to the mix of small-ball and big-ball what these leaders have in common is never accepting the status quo, always challenging assumptions and adapting. They show a degree of fearlessness in dealing with change as described by Adam Bryant in his column:

Adam Bryant Corner Office

Bryant focuses on the experience-hardened confidence that underlies “being comfortable being uncomfortable” and taking more (calculated) risk; executives who, rather than maintain the status quo, are all about destabilizing things for the better. Are you one of these? Are you hiring for this quality? As another of my CEOs said: “I would rather have people I have to restrain than those I need to kick in the ass.”

That’s just my view. What’s yours?
 

Credit Where It Is Due — A Tactic for the Boss

In my radio interview with Jim Blasingame (Small Business Advocate), I gave him three questions to ask when you are eager to get someone to change their mind and take action accordingly. I failed to give credit to the source, a speaker at the January worldwide Vistage International Conference: Daniel Pink.

Pink spoke of getting his daughter to clean up her room when prior direct attempts had produced only negative reactions. He asked:

- On a scale of 1 to 10, how ready are you to clean up your room? (She answered “2.”)
- What would it take to move to a 4 or 5? (She began to think of how she might benefit from a clean room)
- What could I do to help you go from 2 to 4 or 5 (She asked for his help and asked if she could bring a friend over to see it).

In the context of getting small business owners to behave more like CEOs than checkbook managers and micromanagers, Blasingame morphed these questions into a self-examination for the business owner:

- On a scale of 1 to 10, how ready am I to make a change (something I suspect will greatly improve things but have been reluctant to consider)?
- What would have to happen or what what I have to find out that would move me to a higher point on the scale?
- What help do I need to make such a move?

As always, Jim has great instincts.

See earlier posts for the full interview on Forbes.com. And to view Dan Pink’s books and blog which deal with selling ideas, go to:

Dan Pink

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