In part 1 of this article, I wrote about the first three elements of excellent CEOs identified by McKinsey. This month, you can discover the other three. As before, I believe many of these insights apply to leaders, not just CEOs.
4. Board engagement
Mindset = Help directors help the business
Effectiveness: Promote a forward-looking agenda
Excellent CEOs get their Board to go beyond their traditional responsibilities, and provide input on a wide range of topics: this makes the most of their time and experience – and we all appreciate being asked for our expertise on a topic, and being heard.
As a leader, you could apply this insight by asking your peers and stakeholders for their ideas and opinion in relation to your business. This will generate a wider range of views to inform what the forward-looking agenda should be. It will also inhibit potential bias, give you fresh thinking, and help build engagement.
Relationships: Think beyond the meeting
Excellent CEOs develop and maintain strong relationships with all their board members, and have regular contact with them.
So, think about all your stakeholders and how to build relationships with them. Talk to them in between the governance of your formal meetings. Because the relationships will be there – and relationships are the key to effective long-term working – it will help you collaborate more effectively and get support when you need it.
Capabilities: Seek balance and development
Excellent CEOs have Board members who truly serves what the business needs, and they influence the selection to ensure they have the expertise and industry knowledge required. The CEOs also support the development of their Board members.
As an individual leader, you would do well to think about the composition of your leadership team so you get a good balance of knowledge, expertise and style. Consider also emerging trends – what skills and knowledge will you require in the future? Finally, Also, like great CEOs, invest in their development so they continue to add value and feel engaged.
5. External stakeholders
Mindset: centre on the long-term “why?“
Excellent CEOs reinforce and act on the purpose of their organisation beyond just profit – they also play a role in benefiting society.
Social purpose: Look at the big picture
Excellent CEOs spend time thinking about, articulating and championing the purpose of their company. They feel responsible for this, in order to sustain the long-term success of the organisation they run (see the stats below) but also because it’s the right thing to do. Many CEOs, and leaders I work with, care about leaving a legacy for future generations – making lots of money is not what motivates them.
- 87% of customers say they will buy from a company that supports issues they care about (1)
- 94% of Millennials* say they want to use their skills to benefit the cause (2)
- Sustainable investing has grown 18-fold since 1995 (3)
This graph shows the evolution of labour through the ages. For more information, see my article on Creating a Values-driven organisation
Other articles you may find useful include:
- Managing generations X, Y and Z
- Start why ‘why’: How great leaders inspire everyone to take action
- Employee engagement
As a leader, think about how you can promote and champion the purpose of the work your organisation does, and how it supports society. This will draw people to you (such as customers and other stakeholders) as well as attracting employees and people to work in your team.
Interactions: Prioritise and shape
McKinsey posits that “excellent CEOs systematically prioritise, and schedule interactions with the company’s most important external stakeholders to motivate action.”
- What parts of your business should you spend time in?
- How can you learn the wants and needs of your key stakeholders?
- How can your team or colleagues cover off other stakeholders?
- Who are the thought partners and opinion leaders in your industry (internal and external)?
Think about and invest in developing your skills in communication – prepare well-thought through messages, so you can make the most of opportunities, whether it’s in the elevator or in front of a large audience. Don’t wing it –it will show through!
Moments of truth: Build resilience ahead of a crisis
This links to my article about How to develop resilience and cope with stress
Excellent CEOs ensure that companies have a governance in place to effectively spring into action when a crisis hits. This would incorporate policies, governance and also the appropriate culture to risk-taking.
As a leader in your own organisation, look back and analyse the crises that arose over the past two or three years. Then identify predictable patterns, and put measures in place that will prevent or contain them if they are repeated in future.
Also, at the end of each year or after any major deliverable, take time with your team to review what went well, what was difficult, and what you would do differently next time. Build the answers into your regular working practice. Consider the risk-culture you want to enable, so that your organisation can be agile but not foolish and lacking in thought.
6. Personal working norms
Mindset: Do what only you can do
That line is so powerful! Here are a couple of good questions to ask yourself every morning.
- What should I do today that only I can do?
- What was I going to do today that I ought to delegate?
Office: Managing time and energy
Most successful CEOs quickly establish an office that makes their priorities explicit and helps them spend their scarce time doing work that only CEOs can do.
They also consciously build in time to recuperate outside work, such as seeing family and friends, exercise and hobbies, and time alone to reflect.
As a leader, you might not have access to a team of assistants. But it’s still worth working out ways to address these questions:
- How can you discipline yourself to continually focus on only what you can do?
- If you only had one hour per day to do your job, how would you spend that hour?
- How can you carve out time for non-work activities, and respect yourself enough to stick to that?
Leadership model: Choose authenticity
Here, I’ll simply quote McKinsey:
“Exemplary CEOs combine the reality of what they ought to do in the role, with who they are as human beings.“
Good questions to ask yourself include:
- What legacy do I want to leave?
- What do I want others to say about me as a leader?
- What do I stand for?
- What won’t I tolerate?
Perspective: guard against hubris
Hubris is defined as “excessive pride or self-confidence”.
Once CEOs have learned to trust their own instincts, It’s easy for them to become over-confident and tune out critics.
That’s why excellent CEOs form a small group of trusted colleagues to provide discrete, unfiltered advice. They also stay in touch with how the work really gets done by spending time with employees.
McKinsey urges CEOs to stay hungry, and stay humble.
I’d encourage you to do the same. You don’t want to be the leader who surrounds himself/herself with “yes people” and then becomes completely out of touch with reality.
Being a CEO – or any leader – is a tough and often lonely job. The higher up you go, the lonelier it can feel. It’s unpredictable and hard to know if you’re making the right decision and adding the optimal value – usually it’s about making your best judgement with the information and opinions available.
I hope the insights in this article and the one from last month provide you with some guidance and confidence so you can give it your best shot!
Don’t go it alone – we’re interconnected and effective teams are stronger than the sum of their parts.
CEOs have to make big, scary decisions that have a lasting effect on the future of the company. Having good judgement is therefore fundamental, so we’ll talk about how to apply good judgement in March.
* Note that millennials are now aged up to 40, so they form the major part of the workforce and will hold most positions of power during the next decade.