A CEO Only Does Three Things
A CEO focuses on only three things. He sets the overall vision and strategy of the company and communicates it to all stakeholders. He recruits, hires, and retains the very best talent for the company. He makes sure there is always enough cash in the bank.
The Secret to Authenticity
We live in an era characterized by the artificial and the insincere. Corporate communications are manufactured by committees of writers, then edited and approved by lawyers. Authenticity is hard to find. From social media posts to company announcements, it becomes harder each day to separate the phony from the real. This is especially true of business leaders who, rather than express their authentic selves, resort to canned statements and shopworn phrases when asked a question that challenges a company policy
The world hungers for authenticity. We all want something real in our lives—somewhere safe to place our trust, someone we can believe. Companies will spend millions trying, but you can’t buy authenticity. It’s an oxymoron!
Authenticity is simple. When your beliefs about who you are become mirrored in your thoughts and emotions, you are behaving authentically. Congruence is key; whenever you say, think, feel, or do something that isn’t shaped by your beliefs about who you are and what purpose you serve, your authenticity is at risk.
Connecting with People at the Level of Belief
Great leaders transcend the intellectual and connect with People at the level of belief (their “I am” dimension). By recognizing and expressing shared values, they show their humanity. They create a common bond to inspire action and contribution. Once so inspired, People can deliver the extraordinary.
All great leaders are driven by a personal vision for their organization. But a personal vision is not enough. Just as artists connect with audiences on a deeper level through paintings, books, or musical compositions, leaders need to tap into the deeper levels of their stakeholders. It’s the only way to galvanize them toward a shared goal. To be truly great, a leader must have motivational intelligence.
The Pursuit of Self-Awareness
Management guru Peter Drucker advises that, “Whenever you make a decision, write down what you expect will happen. Nine or twelve months later, compare the results with what you expected…it’s the only way to discover your strengths.” Drucker calls this process “feedback analysis.” Warren Buffett may be the most famous practitioner of this method. For years, he has written down his reasons for every investment he makes. Later, he compares his decision with the final outcome, noting what worked and what didn’t, as well as the validity of his reasoning and the motivations behind it.
The more a CEO works on himself—understanding the internal landscape of his own psychology—the better a leader he can be. It takes a lifetime’s worth of work. There are no easy answers, but there are quick wins for those with the foresight and insight to do the hard work of self-assessment and growth.
Culture: Your Most Important Competitive Advantage
The roots of Culture touch every corner of your business. When Culture thrives, you attract talented People who perform exceptionally on behalf of the business, which in turn drives positive growth in your Numbers. When a company’s Culture is broken, your best People move on to other opportunities, and the People who stay are unlikely to act in the business’s best interests; execution and even profits will eventually falter.
Intuitively, we know that Culture is important. Yet, because cultural problems never present themselves directly—only through the behaviors of your People and the results of behaviors—they are often harder to nail down and address than other business challenges. For this reason, you must train yourself to think of Culture as a contributing factor to every challenge and every success you face in business. Each day you must seek to understand the cultural antecedents of the tasks that fill your inbox, because they are there, and often go unaddressed.
A Tale of Two Cultures
Cultures fall into two categories:
Least Common Denominator—These Cultures are accidental at best, determined by what members do and how leadership reacts, making them fragile and fluid. They break easily and always take the form of whatever certain employees feel is best for them. Clients take a backseat in these Cultures, and so do the best interests of the business. No mountains are climbed, and no records are broken.
Intentional—CEOs who take the time to be intentional about their company’s core ideology are the unsung heroes of the American business landscape. They commit themselves to working every day to ensure that positive cultural values are personified in every employee. Their work is not produced; it is breathed into life. In an intentional Culture, employees make choices aligned with business and client interests.
Culture exists whether you want it to or not. If you are intentional about fostering and nurturing your Culture, you can use it as an accelerant for growth, pushing your company to greater heights. If you are unintentional about your Culture, a least-common-denominator Culture will fill the void.
Your choice as a CEO is to either ignore your Culture, which allows weeds to choke your crops, or to invest in the intentional practice of tending and caring for the farm, giving your plants the nutrients and support they need to flourish. This is your garden. What will you plant?
Picking the Right People
One of your tasks as the CEO is to pick the right People to power your business. Building an environment in which they can thrive—your Culture—is critical. But a Culture without its People properly aligned and focused is an oxymoron. Culture cannot exist without People, and People must be properly aligned with the Culture for results to manifest.
Building a Culture of like-minded People is inherent in the CEO’s role, and it is as much an art as a science. Hire the wrong person—morale crumbles and performance suffers. Bring on the right talent—performance increases and growth accelerates. Once the right People are onboard, they grow and change, engage with new challenges, and embrace the lessons of success and failure. This growth, while positive, can pose its own set of challenges.
Think about it this way: we might reduce a company to the formula: Company = People x Culture x Focus. To increase the value of the company, we must increase each of those three parts. That said, People matter more than any other variable, and there is no area where a CEO’s impact will be more directly and widely felt.
Talent Management
The risks involved in making a Hollywood film have grown exponentially over the past two decades. To ensure a profit, film studios look for a sure thing—a tried-and-true story with a star who’s a box-office draw. Occasionally it works. But usually it doesn’t. Think of all the films you’ve seen where the casting was totally wrong. Not because the star had no talent but because they were just not the right “fit” for either the character they played or the film’s storyline.
For Hollywood, choosing the right talent is critical. That’s why the choice has to go beyond reputation or who a director likes to work with. The actor who gets the part should bring the script to life in a way no one else could have. If a movie’s star isn’t a good match, nothing can save it. The same holds true for the choices you make as a CEO—you can have the perfect script, the perfect setting, plenty of money, and a dynamite director, but if your talent isn’t up to par, you’re funding a flop. This is why we must look beyond résumés and reputations. Just as the actors a producer casts can make or break a film, the People you hire will have a lasting impact on the success of your company.
Talent Acquisition
Finding candidates to fill positions is not hard. A recent study by Indeed.com revealed that the average position advertised has over forty-four applicants. If you asked your HR department how many applications it sees for the average position, you might discover that hundreds of résumés are processed for any given opening. The challenge is to find the right person—the talent—who fits your Culture and will enhance the capabilities of the company. To do so, CEOs must throw out preconceived notions of “recruiting” and focus instead on “talent acquisition” strategies
No Hollywood casting director would place a classified ad to cast a leading man in a blockbuster role. Instead, she seeks out relationships with People familiar with the style, work habits, and capabilities of potential performers to schedule auditions for the role. She isn’t looking for someone who will do an adequate job; she is looking for the person can own the role as no one else can. Why should a CEO behave any differently?
When you focus your work on the three things a CEO does and approach the task with a structured process, talent acquisition becomes much more achievable. To implement a talent acquisition philosophy, however, you have to leave behind some of the archaic ideas that persist around hiring. You have to adopt novel strategies to produce extraordinary results.
Set the Agenda
The Numbers we measure, the importance we assign them, the action plans we derive from their interpretation—all of these are examples of the executive function. While you can delegate some of the systems and process surrounding how and when data is gathered and reported, deciding what gets measured is the prerogative of the CEO.
The following might sound familiar: CEOs know that it takes blood, sweat, tears, and treasure to build a successful business. Too often, growth may slow, margins may narrow, and expenses may mount. The company may hit a ceiling, unable to get to the next level with the team and resources available. “What exactly are we striving to achieve?” your People ask themselves silently before embarking on their daily activities, most of which have no connection to end results.
“We need more hard work, more hours, more People. More!” a CEO might say to himself or to his leadership team, secretly hoping that working twice as hard will produce results. We know that success depends on a solid team working together toward common objectives. Yet, it’s rare that everyone pulls for the same thing. Why? Because the clarity of your goals is lacking.
Defining your business’s key performance indicators (KPIs) is your opportunity to set the agenda. Do you know what Numbers are critical to predicting and confirming success in your business? That’s not a trick question. Just as many CEOs lack financial backgrounds, many CEOs measure the wrong KPIs or overlook some KPIs. Every business has a financial Achilles’ heel. If not properly monitored and managed, it can cause you to miss important opportunities, or worse, lead to financial ruin.
Here are some categories that may help you think of worthwhile metrics to track:
- Financial Measurements
- People Measurements
- Sales and Marketing Measurements
- Research and Development Measurements
Each of these categories can be split into subcategories. For example, financial measurements likely include the critical KPIs of profit margin, cash flow, and payment velocity. People measurements might include employee engagement and satisfaction scores, recruiting goals, and even the number of attendees at corporate events. Culture KPIs can focus on ritual engagement, personal growth initiatives completed by your People, and even response rates to culturally themed emails.
Fostering Ownership Thinking
Creating transparency in your business helps to eliminate the apathy-breeding question, “What’s the point?” As your company grows and requires larger and larger teams to operate, even midlevel managers can start to feel that their contributions go unnoticed. When employees begin to feel this way, their actions shift accordingly. They execute some tasks half-heartedly. Others they ignore completely. The dips in performance may be small and isolated at first, but apathy can be contagious. As it spreads, the small losses accumulate, and the trajectory of the business begins to flatten.
Without the number chalked onto the plant floor, Schwab’s employees were just going through the motions. There was no measurement. There was no transparency. And therefore, there was no urgency or accountability. By simply sharing that number, Schwab touched on one of the magical aspects of human nature. When we believe our work matters, we are capable of accomplishing extraordinary things.
What Schwab tapped into is now referred to as “ownership thinking,” popularized by the book of the same name by Brad Hams. The philosophy of ownership thinking argues that the majority of the modern workforce feels entitled to a paycheck simply because they show up for work. While the idea of entitlement has taken on a stronger connotation in national and international dialogue, I hope that we can at least agree with Hams’s conclusion: “The average workplace does not instill in individuals a sense of accountability or a sense of purpose.”
Rather than blame the employees for that reality, we as CEOs have to take responsibility for the Cultures we create and view the problem as an opportunity to foster change in the performance of our People. If we can show them the impact of their work and give them a meaningful experience—a sense that their work has purpose and that being accountable for their actions is empowering—we can create a more profitable business and a mentally healthier workforce.