It’s getting tougher at the top!
If you’re a CEO or CFO of a publicly quoted company you probably know what pressure is. A recent study by Booz Allen Hamilton at 2500 largest publicly quoted companies has found that in the period between 1995-2004 CEO dismissals increased by 300%, underperformance being the primary reason. Being a CEO is an increasingly risky business.
The CFO executive board’s recent analysis of CFO careers reveals that only 5% are promoted to CEO or Chairman at their own companies, and another 5% are promoted to these roles at a new company. The remaining 90% retire, are fired, reassigned to another role, or become CFO in another company. The research entitled Root Causes of CFO Success and Failure analyzes the difference between “average” and “exceptional” CFOs. One clear distinction of the “exceptionals” is their greater level of intimacy with business operations. Because of this they are more likely to have changed their CEO’s mind on a major business issue. The CFO executive board’s investigation also focused on other CFO “headaches”, such as effective time allocation, delegation, relationship with the CEO and career paths.
I am certain that neither CEOs or CFOs are in their job for an easy ride, but the level of pressure and stress is increasing as pressure from shareholders is causing top executive teams to seek short-term performance gains. When you look at the research you find that CEO’s are not fired because of their lack of intelligence or business acumen. It’s all about performance and results, which comes down to the style of leadership, and the ability to harness the efforts of employees and direct them into activities that deliver great results.
Jack Welch did nothing but interview people for the first 6 months at GE, an activity which built the foundations for his long-term success. In their million selling book The Leadership Challenge, Kouzes and Posner explore how to turn challenging opportunities into remarkable successes by mobilising others to want to do extraordinary things. This is achieved by transforming values into actions, visions into realities, obstacles into innovations, separateness into solidarity, and risks into rewards.
The challenge for the CEO and the executive team is to create this leadership landscape whilst resisting the urge to be engrossed in short-term wins which serve mainly to boost CEO popularity with the shareholders. On the Quadrant 1 Real Success programme the most frequently expressed concern from participating CEOs and executive teams is developing effective relationships with peers and board members, and having a positive influence with them. This is where the skills and techniques of Neuro-Linguistic Programming (NLP) are being used with excellent results. On a recent programme the CFO of an international HR Consultancy firm requested all her executive team attend PSP because they need to learn to work together and have a positive impact with each other.
Having worked with quite a number of CEO’s and top executive teams in different organisations we have seen how those that tend to be struggling with their position seem to be more interested in their own popularity and career than the health of the organisation. Hence they spend time driving the business resulting in people working harder, but not much time engaging and involving the hearts and minds of their people. In contrast, the most respected and successful CEOs are driven by their aspirations for the business, not their career, and utilise the creativity and energy of their team to deliver outstanding results.
When you take time out to create an awareness of the way you think and the effect you have on others, and on your own effectiveness, it’s surprising how things can change. Crucial skills such as decision-making, time management, focus, concentration, listening and engaging others can be developed rapidly with the leading edge techniques used on Real Success.
Whilst the research by Booze Allen Hamilton was conducted at the world’s largest corporates, we would be interested in hearing from CEO’s, CFO’s and members of top executive teams from all sizes and types of organisation in both private and public sectors. What is your experience? Do you feel under pressure from shareholders and other stakeholders to deliver short-term results? Is your CEO putting you under pressure for short-term results when you know you need to develop longer-term solutions? How are you dealing with this? We invite your comments.
David Molden, Quadrant 1 International.
