CEOs Misperceived

[David Sandusky]

From a recent article in Harvard Business Review by Richard M. Rosen and Fred Adair - CEOs Misperceived Top Teams' Performance

New research suggests that CEOs have a rosier view of senior management’s performance than other top team members do. In a global survey of 124 CEOs and 579 other senior executives at large and midsize firms from a range of industries, 52% of the non-CEOs said that their teams were doing poorly in critical areas such as thinking innovatively, cross-marketing, leading change, overseeing talent development, and building a company culture. Just 28% of the chief executives reported problems in these areas. Rating their teams’ overall effectiveness on a seven-point scale (seven being the best), the CEOs gave an average score of 5.39, whereas the other executives gave an average score of only 4.02. (See the exhibit “Performance Scores Diverge.”)


Statistically, these ratings are worlds apart, and it seems that CEOs are the executives who need a reality check. The research, conducted jointly by the Leadership Consulting practice of the executive search firm Heidrick & Struggles and the University of Southern California’s Center for Effective Organizations, also included a survey of 60 top HR executives from Fortune 500 companies, only 6% of whom reported that “the executives in our C-suite are a well-integrated team.”

Are CEO's out of the loop? I see that they are more than not. Perhaps they are living in their vision of the culture they are creating. That is not a bad place to be as long as the vision is communicated correctly and the CEOs truly listen and watch today. But many are not, what do you think?

I have a client who runs a mid-size, global firm with a talented and sophisticated board of directors. Yet it is not always easy or appropriate to gather the board to discuss all issues, so he and I meet monthly in a process I call “strategic dialogue”. This affords him the opportunity to discuss issues that are tough to bring up with his board and his executive team. As the saying goes, “it is lonely at the top”.

This CEO is very talented and successful. He is growing his business at a rate that exceeds the market. His profitability is well above the norm in his industry. He is on top of his game. I offer this so that you might give the following list a hard look. He has it posted in his office as a daily reminder of what his priorities are. Here it is (reprinted with permission):

1 Have you talked to the board today? This can be a challenging relationship for CEOs. If you do not develop trust and have open communication, you will never get the benefit from the board that you should nor will they have a level of faith required for long-term success.

2 Have you reviewed the numbers today? Having a dashboard in place to monitor your business can eliminate surprises and help you take corrective action before small problems become real problems. What are the critical issues in your business?

3 Have you walked the hallways today? In this CEO’s world he literally means walking the hallways to make sure that he has a chance to interact with many of his coworkers. He understands that visibility is important for leadership. You might take this metaphorically as your “hallways” may be distant, but think about your interaction with your team.

4 Have you talked to a customer today? Too many CEOs insulate themselves from the people that really matter, their customers. Getting unvarnished information is critical for a CEO to stay “on” the business rather than just “in” the business. As a friend of mine says, “If you are constantly facing inward, it means your butt is facing the customer!”

5 Did you read today? Think metaphorically. This is his message to himself that says that you must constantly educate yourself.

6 Did you think about the future today? This CEO’s industry has some pending changes that might radically change how they do business. Yours probably does as well. Thinking about the future cannot be isolated to a 2-day planning event every year. The CEO needs to continually question the vision to develop a clear, compelling picture of the future in order to make effective decisions and align the organization.

What is your daily list? If you don’t have a structured way to stay focused, you won’t.