This month’s article was inspired by some research by McKinsey called: “The mindsets and practices of excellent CEOs“. I’ve added my own advice to help you kickstart your 2020; even though the research focuses on CEOs, much of the insight can apply to other leaders and professionals too. I hope it gets you thinking about how you might like to refresh your mindset and practices.
McKinsey looked at the six main elements of the job:
- Setting the strategy
- Aligning the organisation
- Leading the top team
- Working with the board
- Being the face of the company to external stakeholders
- Managing your own time and energy
They summarise this with the diagram below, with the optimal mindset and practices for each element of the role. So, for example, setting the corporate strategy is best done with a mindset of “Focus on beating the odds”, with three practices to complement this around Vision, Strategy and Resource Allocation.
We look at the first three of these below; I’ve picked out the elements I believe will be of most value, and help you set the spark into a new decade at work. Next month, we’ll consider the other three.
Everything you do sets/affects the tone for your team(s) and colleagues. So, if you are in a rut about the way you do your job, read on!
1. Corporate strategy
Mindset = focus on beating the odds
You need a plan, but you can’t guarantee or predict whether you will be successful. The role of the CEO is about not leaving things to chance.
Set your strategy
When you set your strategy, make bold moves early. Research shows that making one or two bold moves more than doubles the likelihood of rising to the top 20% of economic profit.
It seems that CEOs who are hired from external organisations are more likely to move with boldness and speed than those who are promoted from within. That’s because someone from the outside is not overly influenced or nervous about challenging established ways of doing things. Therefore, if you have been promoted internally, try to take an external perspective and challenge the “sacred cows”.
Mindset = Stay active
Think about where you need to allocate resources. Don’t spread those who add most value thinly across your organisation. Be bold. Don’t be afraid to over-invest in one area if that will give you the edge in terms of performance.
Don’t just review resources once every year or two. Reviews should be actively ongoing.
2. Organisational alignment
Mindset = managing performance and health with equal rigour
McKinsey reminds us that: “if you were to ask successful Investors what they look for, they would tell you they’d rather put money into an average strategy in the hands of great talent than into a great strategy in the hands of average talent.”
The best CEOs put equal focus on both great strategy and great talent. They have systems in place to enable this, and to measure it – rigorously.
As a leader, make sure you have a really clear strategy that is going to help you stand out from your competition, and also really invest in your talent.
If you have someone who is under-performing, move them on without delay. They will not only impede the performance of your function, but they will also impede your personal credibility.
Most under-performing people might outperform in a different role. Work with them to see where they would best fit.
Match talent to value
The best CEOs take a methodical approach to identifying which roles in their organisation create most value, and match their best talent to those key roles. You can also do that. Make sure that, for each key role, you have a talent pipeline that you review once or twice per year and act on it.
Mindset = combine speed with stability
Research shows that companies which are both fast and stable are almost three times more likely to rank in the top 25% of organisational health than companies which are fast but lack stable operating disciplines.
As you look at your organisation, consider which aspects of your organisation’s design or processes need to be stable and which need to be more dynamic so you can react quickly to opportunities and threats. Continue to retain a degree of discipline with key processes; in some places, I’m starting to see this slipping in the eagerness for (or excuse of) agility and its freedoms, with the result that where stability and consistency is core, it now feels chaotic and less effective.
This links to my recent series of articles about agility:
3. Team and processes
Mindset = put dynamics ahead of mechanics
The dynamics of your leadership team can strongly influence your organisation’s performance, so make sure you are really on the ball and know what’s going on.
Teamwork: show resolve
Invest time and money in developing the spirit and effectiveness of your leadership team, so that the sum of the whole is greater than the sum of the parts. A team that performs well together will achieve much more than working in silos – I’m sure you’ve been there!
The best CEOs also invest in individual relationships, and get the right balance between distance and remaining close enough to retain trust and loyalty. It’s a balancing act. If you are too intimate with your direct reports, it can be hard to hold them to account when you need to. If you’re too remote, there won’t be any connection.
Regularly review team dynamics. Ensure they operate in rhythm for meetings and the quality of interaction. Established teams, where the dynamics are healthy, will most likely be faster in decision making – the initial ‘storming’ of the team is long behind them. However, they can also become complacent. So, as you begin a new decade, it’s worth re-visiting your meetings, decision-making governance, and ways of working with a fresh pair of eyes. Do they need updating?
“They [CEOs] also firmly prohibit members from putting their interests ahead of the company needs, holding discussions that consist of “theatre” rather than “substance”, having that meeting outside the room, backsliding on decisions, or showing disrespect for one another.”
Mindset = Defend against biases
Excellent CEOs ensure they have a diverse team, because this improves the quality of decision-making. They also institute processes that take into account how to correct errors, and also formally appoint a devil’s advocate who will help them disregard past information and assumptions.
Mindset = ensure coherence
Often, leaders have standalone processes that might be delegated, such as people processes being handled by an HR business partner, and budgeting being dealt with by finance. However, that can mean that processes become disjointed and transactional (and that’s before we get to the cynicism and box-ticking mindset!).
The best CEOs require their top team to coordinate their decision-making and resourcing to reinforce priorities and execution of the strategy. This way, the objective of these processes become integrated into the team’s practices and are more likely to deliver the value intended. It also means the leadership team feel accountable for all of the components of running their business. In your role, how can you take a step back and ensure all the practices and processes within your organisation integrate so you can achieve the vision?
If you found this information useful, you might also enjoy my related articles:
- Future-proofing yourself and your business
- Start with why: How great leaders inspire everyone to take action
- What is distributed leadership?
- Introducing action-centred leadership
- How to design an agile organisation
- Organisational development (part 1)
- Organisational development (part 2)
- Leading global teams
- High-performing leadership teams
Next month, we will cover the other three aspects of CEO mindset and practice:
- Board engagement: help directors to help the business
- External stakeholders: centre on the long-term ‘why?’
- Personal working norms: do what only YOU can do