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When it comes to implementing improvement within an organisation, the outcome fundamentally depends on the quality and behaviour of its people; crucially, this begins right at the top, with the CEO. Ultimately, a business can only be as good as its leadership. So, picking the right CEO can be the first step on the path to success but equally, choosing the wrong one could begin a journey to disaster.
The selection process requires multiple elements, and these shouldn’t be limited to the candidates’ previous experience and qualifications. Considerations include; the Board’s own expectations of the CEO, the ambitions and motivations of the candidate and whether mutual trust can be forged between the Board, the CEO and the rest of the workforce. In terms of business improvement and change management, once change has been effected, the Board must also ensure sustainable improvement through effective succession planning at the top level.
In the first part of this three-part blog, we offer a brief overview on how to choose the right CEO to optimise business performance.
Understanding emotional drivers The CEO is the ultimate decision-maker for the organisation. They should be the driving force behind improvement, providing the vision for the future and establishing the ambition against which all forthcoming success will be measured. With the Board, CEOs are also responsible for setting the organisation’s strategy, and articulating it through specific business objectives to deliver company goals. For example, when implementing Integrated Business Planning (IBP), it should always be with the intent that IBP becomes ‘the way we run our business’, and this requires the absorption of the entire organisation into new ways of working, starting with the person at the top. Consequently, it is fundamental that the leader of the business is the owner of the process, not just in name but with their heart and soul.
If this doesn’t happen, then our experience at Oliver Wight is that the process is inevitably doomed to failure. Sometimes the reason is a lack of understanding from the organisation’s leadership team that ownership at the top is a fundamental requirement. However, sometimes it’s an indicator of something more complex; the unspoken personal ambitions of the CEO. A leader’s emotional drivers can be broadly categorised under the headings of ‘ambition’ or ‘survival’, but the influencing factors are many and varied. Understanding what makes the boss tick not only shines a light on their true capabilities, but also unlocks the real potential for sustainable business improvement.
Ambition, or survival? There is a distinction here between logical and emotional drivers. One Oliver Wight survey of European CEOs questioned the key issues they were facing in the current climate, and responses included problems such as ‘unrealistic shareholder expectations’, ‘lack of innovation’, ‘conflicting forecasts across the business’ and ‘poor communication’. Whilst significant, these are obvious conscious responses, relating to capability and resources, and probably represent the day-to-day issues faced by any CEO; they say nothing of the subconscious reasons behind the response.
More interesting is that only 19 per cent of those interviewed said they ‘wanted to’ improve business performance - as opposed to feeling duty-bound or because ‘it made financial sense’. This is an emotional response and is indicative of the passion for improvement (or lack of it) that is key to sustainable success. It’s why the best performing organisations base their hiring criteria not just according to competency or experience, but also on how well the candidate’s attitude and personal attributes align with the company values and culture.
In the next blog, we’ll reveal why this sharing of values and culture is crucial in facilitating business excellence.
What do you feel makes an outstanding CEO? Comment below.