Tired of paying over-the-top rates for poor service, bad communication, and a total lack of market strategy? It might be time to switch—your chief executive, that is.
Today, thanks to ‘switching’ providers like uSwitch or comparethemarket, consumers have more power than ever when it comes to comparing and selecting utility or insurance providers. All it takes are a few clicks through these streamlined services to find, and switch to, a better deal.
If only such a service existed for selecting better chief executives. CEOs wield such a large amount of responsibility that a bad CEO could damage, if not devastate, your company in every conceivable way – even permanently, as the recent case of Phillip Green and BHS attests.
By looking at common shortcomings CEOs often face and ‘comparing the market’, so to speak, this article will hopefully outline some of the areas in which chief executives can improve.
A self-critical approach
As Ben Horowitz points out, there’s no one else to blame when you’re CEO – chief executives are ultimately responsible for every major decision within the organisation. The blame for a bad hire or a failed initiative will ultimately find its way back to chief executives as they are the ones who OK such decisions.
For this reason, better CEOs need to take a generally more self-critical approach to their position and their relationship with the company. Firstly, this should manifest in an ability to recognise one’s own weaknesses. If a chief executive is unwilling to admit that they can sometimes lack communication skills, or that their excess of ego is having a negative effect on the company, then this demonstrates stubbornness. If you ask a prospective new CEO what their greatest weakness is and their answer does not pertain to an actual weakness (e.g. “I am too detail-oriented” or “I am too friendly”), it can be a red flag for someone who has not faced up to their own limitations and is not focused on self-improvement.
This can become fatal to a company in times of strife, and this vital self-critical approach must be evident in a chief executive’s actions. If, for example, the organisation is feeling the financial squeeze and the CEO is still accepting large bonuses at the company’s expense, then this demonstrates a lack of critical reflection and a detachment from their responsibility to employees and stakeholders.
Goal-oriented strategic thinking
Companies inevitably run into a myriad of obstacles over their lifespan, and as both a figurehead and leader in practice, it is down to the chief executive to ensure the organisation weathers the storm.
No matter what industry you’re involved in, there will doubtless come a time when your company will be presented with a near-fatal obstacle or challenge. Getting bogged down in the details of these obstacles or allowing them to dominate you psychologically can make you lose sight of the path ahead. This calls for strategic, long-term thinking, rather than short-termism.
Chief executives need to be conscious of the many shifting trends in their industry and conduct a risk assessment of how these might change the landscape in which the organisation is operating in the future. This means understanding the historically unique consumer trends and new technologies emerging as potential opportunities with a place in long-term strategy, but it also requires an ability and willingness to determine which of these trends will have a contingent impact on the company’s vision and which of them are simply short-term fads. Put simply, good chief executives need to have a clear head, balancing risk against short-term challenges in order to retain a clear long-term vision and strategy for the company. Those who are susceptible to getting sucked in by the minutiae of short-term issues simply don’t cut the mustard.
Does your CEO actively involve themselves in the community of the company, or are they rather more aloof? Do they skip staff parties, charity fundraisers, and local business gatherings? It could be a sign that they feel little affinity with their colleagues or immediate business community, and therefore lack a sense of social responsibility.
“People of my generation of leadership have fundamentally failed, in that corporate private sector has not delivered its contribution to society over the last 10 years,” argues Ronan Dunne, O2’s chief executive. Generating revenue for shareholders and stakeholders alike is obviously a priority for most businesses, but it’s important to remember that business people are part of a social contract with wider society. After all, it’s the community of consumers, producers, and other businesses that every successful organisation owes their success to.
CEOs need to take active, intentional action to not only exhibit but cement the company’s social responsibilities. Ask: how does their sense of social responsibility manifest? Boondoggle initiatives won’t cut it—they need to produce concrete results. O2’s Think Big scheme is a great example of a company getting social responsibility right, offering grants of up to £10,000 to young innovators looking to provide new and creative solutions to environmental problems. Does your CEO put their money where their mouth is? If not, it might be time for a switch!