CEO Test

The CEO is the highest ranking officer of an organisation. There was a time the CEO embodied the idea behind a business organisation. He was the “authority” and the hard driving institutional leader. Power and pay were concentrated in him. Flattering and sycophancy oftentimes kept the “old” CEO in office. He rested on old strategies and even held new ideas as well as innovation in derision. The CEO always felt he was needed (even indispensable) and therefore clung to office whether or not this was good for the business.

Please, do not misunderstand me because some CEOs served their organisation’s meritoriously. For instance, Warren Buffet, Chairman of Berkshire Hathaway served for 54 years; Jensen Huang of NVIDIA, 31 years and Jamie Dimon of JPMorgan Chase, 18 years.

Today, the complexity of running a business has really grown and the speed of change is dizzying. Expectations from the chief helmsman are compounding. We are now in the era of agility and scenario planning.

The CEO must win in the marketplace. He must be an agent of change and transformation. He must have an incredible impact on the culture and the people. He must acknowledge and fully grasp the reality of challenges and know how to effectively measure progress. His depth of leadership experience must teach him that his organisation must have a clear and distinguishable competitive advantage. He must always ask himself the following questions: What is the organisation striving to achieve? How do I simplify the complexity of the strategy and strategy frameworks? How do I drive the people within the context of a customer centric culture knowing full well that culture is the organization’s energy?

Today’s CEO must stretch and adapt the corporate goals and initiatives. Plans must be communicated to the workforce simply and relentlessly. He must grasp the insight of the paradoxes of leadership such as pursuing his tasks with urgency but at the same time, with patience. He must be confident and humble. Also, he must inspire with his unique and differentiating vision and must know that the organisation must always make profit. All employees must be fully empowered to see and work assiduously for the organisation’s initiatives and opportunities. Every action must of course, be taken to achieve these opportunities. Customer value must be characterised by delivering tangible benefits to customers. That is, the organization must deliver unique, differentiated and beneficial values.

In the past, leaders fit into two or three categories but today, leadership must be multidimensional and well-rounded. The CEO must diligently and constantly achieve four critical relationships. First, with the board of directors, next with his peers, third, with direct reports and most importantly with customers. These critical relationships ensure and guarantee achievement of business and people results.

A recent research by Harvard Business School revealed that a wrong CEO can “collapse” an organization. In order not to create serious problems for the organisation, today’s CEO must be adequately equipped and prepared to achieve the following: He must prepare the organisation for the future have a clear strategy for the organisation and not short term fixes. He must pursue innovation and not just financial earnings and must always clean-up whatever mess and restore confidence.

Bill George of HBS pointed out that there are five key mistakes organisations make in appointing the CEO.

An organization must not choose a CEO “who pledges to lead the business in the same direction as the current CEO.” You cannot be satisfied with current strategy and not give sufficient thoughts to new and future challenges. The CEO, according to HBS “must be a leader who is visionary and adaptable to changing external conditions and is able to redirect the organisation to head in new directions to meet tomorrow’s needs. The CEO cannot apply same leadership formula and approaches.”

The report warned that “the current CEO must not dominate the hiring process of the new one”. The organisation must choose a successor “who has different styles and approaches and may undo old strategies”. Also, “the new CEO must have a clear mandate not just financial expectations and targets. There must be specific guidelines on expectations from those who know”. It warned that there must be “no disparity between the CEO’s chosen direction and organisation’s expectations.” The clear mandate must include for instance, regularly utilizing innovative processes, commitment and discipline.

HBS cautioned that “there must never be emergency succession”. The organisation must always keep its eyes open for possible successors at all times. There must be a development plan to grow varied useful experiences with opportunities to grow and shine in different roles. There must also be exposure to internal and external challenges.

Let me conclude with an interesting result of another new research. Do you know that today, to appoint a CEO, social skills are proving to be more important than the more traditional operational abilities? The candidate that demonstrates interpersonal prowess is preferred because organizations need to coordinate more “to achieve results in these challenging times. The CEO must actively listen to others, empathizes genuinely with others’ experiences, persuade people to work toward a common goal and be able to communicate clearly.” He must successfully “touch the chords of listeners”. Today’s CEO must on a regular basis, gather more inputs and buy-ins from larger and more diverse range of experts to achieve corporate goals and solve increasingly difficult problems.

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