The Most Common Topic I Hear from CEOs 

When working with CEOs from big and small companies, in the US and abroad, the most common topic I hear is the CEO’s frustration with the perceived inability to hand off responsibility to his or her next level managers.  This, in turn, stifles succession planning and/or retirement for the CEO. 

 

In my experience, the problem usually lies in one of three areas.

 

Problem Number One:  The CEO doesn’t really know what he or she wants or expects from the team, or “knows” but can’t articulate it clearly and concisely.  It often takes several discussions before I can get a CEO to identify and articulate, accurately and completely, what his or her standards and expectations are. 

 

I usually start at the highest level, by asking about the CEO’s overall objectives.  Is there a specific target, with a specific deadline, or is the CEO trying to drive improved company performance more “directionally”?  Is the CEO’s concern about a transaction, or a succession plan?  What would a perfect outcome look like for the CEO?

 

Once the overall objective is identified, we can talk about the team’s performance that’s needed to achieve it.  Is the objective dependent on one person’s performance, or on the overall performance of the team?  Is the issue one of specific skills, or something more general, like experience or judgment? 

 

Who is meeting your standards and expectations, and who is not?  Can you provide specific examples?  Of those who are deficient, are the deficiencies addressable?  If so, is the person likely to improve as much as necessary?  A good manager can give someone skills, encourage them to work harder, help them apply rigor and develop judgment, but (just to make the point) even the best manager in the world can’t make someone taller.  How have one or more members of the team failed to meet the CEO’s standards?  

 

Occasionally, these questions are returned with unexpected answers.  Once objectives, standards and expectations are written down and reviewed critically, some CEOs conclude that their direct reports are, in fact, operating at the necessary level, which allows the CEO to feel comfortable starting to hand off more responsibility.  Other times, a CEO may conclude that his or her standards were either misguided or unreasonable, and need to be reconsidered. 

 

Problem Number Two:  The CEO can articulate the objective, standards and expectations but hasn’t communicated them consistently to his or her team.  A surprising (to me) percentage of CEOs admit that they have not communicated sufficiently.  I often hear “I know I’m not easy to work for.”  The next most common answer, particularly for long-serving CEOs, is that a team that’s been in place for years or even decades “should know by now”. 

 

As the leader of any organization, you can’t assume that the people working for you can read your mind.  Start by sharing with your team both what you need from them, and why you and the company need it (see below).  The “what” should be clear and concise.  It should also be in some kind of tangible form like a written document or a PowerPoint.  This will force you to articulate it, and will give your team something to refer back to as it sinks in and they start to work towards it.  It will be the touchstone that you can take them back to as you measure their progress.

 

The smallest subset are CEOs who have, in fact, communicated consistently and effectively; in those cases, the problem is more likely with the team than with the CEO, which leads to a separate discussion.

 

Problem Number Three:  The CEO has communicated the objective, standards and expectations but hasn’t created an environment in which progress is measured and useful feedback is given.  As the CEO, you need to be explicit and consistent about what great looks like, what milestones you expect to see on the company’s and the team’s path to great, and how you – and they – will know when they are achieving it.  At a minimum, you need to articulate what acceptable looks like, and what unacceptable looks like, and how you will measure where your team is on that scale.

 

The objective should be easy to understand and reasonably achievable.  The standards should be informed and reasonable.  The milestones should be easy to measure and should lead logically to the objective.  And performance that meets the standards should be sufficient to achieve the objective.  Each person in the organization, from the CEO all the way down the org chart, should understand what is expected of them, whether they are meeting those expectations (and if not, what they can do to meet them), and how their performance is necessary to achieve the overall objective.

 

This is where the “why” comes in.  Most people are inherently objective-driven, so understanding the objective, how their hard work and performance will help achieve it, and what they can expect to receive upon achievement (whether a bonus, or higher equity value, a promotion, or even just recognition), is critically important.  Your team needs to understand your long-term plan for the company, how their performance is critical to it, and what benefits (tangible or intangible) they can expect if successful. 

 

Now let’s go back to the beginning of the discussion.  A CEO (as with any manager) succeeds if his or her team succeeds.  For the team to succeed, each member needs to understand the overall objective, what he or she needs to contribute, and what the benefits of reaching the objective are.  In each of the scenarios above, there is a disconnect between the CEO and his or her next level managers.  And, while the CEO’s communication in each scenario is necessary, each one alone isn’t sufficient to provide the guidance, performance, measurement, feedback, and adjustment needed to achieve the CEO’s overall objective. 

 

I help CEOs, companies and investors think through and address these issues, and others.  If you’re interested in learning more, please contact me at jeffreymsnider@icloud.com .