Business Growth: Leading From The Top Spot
Dan Arens is an Indiana-based business growth advisor.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowSome statistics are meaningful, others are meaningless. Some recent statistics from the Conference Board are sobering. In the first thirteen years of the 21st Century, fully one-fourth of the leaders of Fortune 500 companies who left their employment were forced out. There has been some very interesting research done which can help other leaders avoid that type of departure.
Being a successful leader in any organization requires many unique qualities, characteristics, and behaviors. Publicly held companies have much more at risk, when it comes to leadership. Involuntary dismissal, according to a Price Waterhouse Coopers study of over 2,500 companies, negatively impacts share value to the tune of over $100 billion per year. Privately held companies are also dealing with CEO terminations and their impact on the bottom line, as well. It is rare that a company which is faced with the termination of one of their leaders escapes difficulties as a result. Avoiding the pain of an involuntary leadership termination is a key to continued growth for your company.
In an article for the Harvard Business Review, authors Botelho, Powell, Kincaid, and Wang make their case for certain behaviors that result in a successful leadership stint as a CEO. Their credentials and observations are based on over twenty years of working with directors and CEOs. In essence, they believe there "is a fundamental disconnect between what boards of directors think makes for an ideal CEO and what actually leads to high performance."
Their research looked at a database of 17,000 leadership reviews. The results of their study indicated four CEO "behaviors that prove critical to their performance: They’re decisive, they engage for impact, they adapt proactively, and they deliver reliably." While most leaders are able to do all four of these behaviors, the authors found that half of the "A" candidates "distinguished themselves in more than one of the four essential behaviors, while only 5 percent of the weak candidates (who earned a B or C) had." If leaders can be strong in all four areas of behavior, but excel in at least one of them (hopefully more), they will more than likely succeed in their role.
Be Decisive. The study indicated that "high-performing CEOs do not necessarily stand out for making great decisions all the time; rather they stand out for being more decisive." As the study indicated "they make decisions earlier, faster, and with greater conviction." A key point here is that they make those decisions even when the information is not complete. They are consistent in the timing, speed and extent of their decision.
Be Impactful. Get buy-in from all the stakeholders after a decision is made. Navigating this behavior is very important to the leader of an organization. They need to be cognizant of where the stakeholders are with reference to the decision making process and yet maintain an appropriate balance in order to deliver the best results for the business. The following example articulates the behavior of being impactful. "With any big decision, I create a stakeholder map of the key people who need to be on board. I identify the detractors and their concerns, and then I think about how I can take the energy that they might put into resistance and channel it into something positive. I make it clear to people that they’re important to the process and they’ll be part of a win. But at the end of the day, you have to be clear that you’re making the call and you expect them to be on board," says Madeline Bell of the Children’s Hospital of Philadelphia.
Be flexible. To say the overall business environment is dynamic this day and age is an understatement. If you are a CEO that is able to readily adapt to situations and circumstances, you are more than seven times likely to succeed, according to the researchers. The ability of being able to go "off script" or call the proverbial "audible" is of paramount importance. Further, the authors suggest that the CEO spend "as much as 50 percent" of their time "thinking about the long-term."
Be reliable. Interestingly enough, the data from the research indicated "the ability to reliably produce results was possibly the most powerful of the four essential CEO behaviors." Fully 75 percent of the CEOs with high reliability were "rated strong on organization and planning skills."
Clearly, there is no perfect mix of behaviors for anyone in every particular situation, but it is certainly helpful for leaders in the top spot to be decisive, impactful, flexible, and reliable.
Dan Arens is an Indiana-based business growth advisor.