Staying Grounded: Find the Right Sounding Board

Former Baxter International CEO and current Kellogg Professor Harry Kraemer has written a terrific column titled, "What Every New CEO Should Do In Their First 30 Days."  His lessons apply to people who take on new leadership roles at all levels. My favorite piece of advice focuses on finding the right sounding board.  You need to keep a few truth-tellers close to you.  These are the people who will give you the unvarnished perspective.  They will help you stay grounded too.  Kraemer writes,

The higher you rise, the more essential it becomes to have people who will tell you the truth. For me, that person is my wife, Julie. Whenever I was promoted—including when I became CEO of Baxter International, a $12 billion healthcare company—she would always say how proud she was of me. In the next breath she would remind me, “Harry, we’re not going to change the way we live, right?”

In the same way, you need a sounding board composed of a variety of people, such as a spouse or partner or close friend, a board member (or two), a former colleague now leading another company, or a professional coach. Each of these people has a unique perspective on you, your leadership, and the kind of support and honesty to remind you of who you are, as a person, not just as a leader.

Leadership Lessons from Chris Licht's Fall

Source: CNN

News has broken this morning that Chris Licht is out as CEO of CNN, just days after controversy erupted about a lengthy piece in The Atlantic about the cable news network's new leader.    I'm sure the list of mistakes he made is quite lengthy.  I'll just note three key lessons here in the immediate aftermath of his departure:

1.  Giving a journalist seemingly unfettered access during your early days as CEO, and then being so loose with commentary and language during that time together, was a colossal mistake.  It's hard to believe someone would not anticipate how such access could lead to massive fallout.   Leaders need to work with the press and shape their message through the media at times.  If you are a media CEO, you certainly can't seclude yourself.  Having said that, this type of access seems completely unnecessary.  I simply don't see any potential upside here.   

2.  Locating his office away from the newsroom appears to have been a major error.  It's simply too easy for executives to become isolated from their staff members.   You might make it even more likely that you will be detached from their concerns if you remove yourself physically from their workspaces.  The location also serves a symbolic purpose.  It signals many things about your priorities and your leadership approach, even if unintentionally.   

3.  Finally, Licht himself admitted to his employees, "As I read that article, I found myself thinking, CNN is not about me. I should not be in the news unless it's taking arrows for you. Your work is what should be written about."  Well, he's absolutely correct there.  The CEO is not the organization.  It's not his or her personal fiefdom.  CEOs need to view themselves as stewards.  The institution doesn't belong to the leader.  In particular, leaders must remind themselves that many employees will work there much longer than they will.  

The Path to Becoming a CEO: The Long and Winding Road

The New York Times published the findings of a fascinating new study by LinkedIn regarding the path to becoming a CEO.   They examined 459,000 people who had worked as management consultants at one point in their career.  They tried to discern some patterns regarding how and why some people reached the position of CEO of a company during their careers.  Here is how Neil Irwin described the findings in his article in today's New York Times:

To get a job as a top executive, new evidence shows, it helps greatly to have experience in as many of a business’s functional areas as possible. A person who burrows down for years in, say, the finance department stands less of a chance of reaching a top executive job than a corporate finance specialist who has also spent time in, say, marketing. Or engineering. Or both of those, plus others. However, there is still such a thing as too much variety: Switching industries has a negative correlation with corporate success, which may speak to the importance of building relationships and experience within an industry. Switching between companies within an industry neither helps nor hurts in making it to a top job. These are some of the big findings in a new study of 459,000 onetime management consultants by the social network LinkedIn. Experience in one additional functional area improved a person’s odds of becoming a senior executive as much as three years of extra experience. And working in four different functions had nearly the same impact as getting an M.B.A. from a top­ five program.

The results do not surprise me.  You need to master a diverse range of skills to become an effective CEO.  You have to understand the different functions and disciplines within a firm.  Therefore, accumulating a range of experiences tends to be helpful if you wish to become a chief executive.  It also speaks to the importance of being a successful lifelong learner.  You can't just build upon the expertise you have.  You must take risks and venture into domains about which you are not an expert, and be willing to learn quickly.  

Perils of a Superstar CEO

Matt Palmquist writes this week for Strategy+Business about the fascinating new research conducted by Stanford University’s Elizabeth Blankespoor and Ed deHaan.  They examined the impact of CEO promotion.  By that, they mean the extent to which companies publicize their CEO in various ways, such as by providing quotes and access to journalists.   These scholars examined over one-half of a million press releases issued by 1,500 companies over a ten-year period.  What did they find?  Here's Palmquist's summary:

Large companies that actively promoted their chief executives in communications with journalists saw a more than threefold increase in the media coverage of their CEOs, the authors found. However, companies that went overboard in publicizing their chief executives eventually experienced a sharp decline in long-term performance, largely because their CEOs appeared so comfortable and entrenched in their role that they failed to seek novel solutions or think beyond the status quo... Those who push themselves into the limelight too aggressively may create unrealistic expectations in the minds of shareholders or become burdened by their own celebrity, unwilling to make risky or unconventional moves because of how highly they value their own reputation.

We all have heard the adage, "Don't believe your own press."  Well, now we have a study that confirms the perils of falling in love with all those splashy headlines.   Of course, the study does not provide the evidence of direct link between publicity and negative performance.  It offers a few hypotheses, as does Palmquist in his article about the research.  The comments above seem plausible.  CEOs can become entrenched and overly comfortable, fail to see new ideas, and become burdened with unrealistic expectations. 

Where Does Vision Come From?

Dale Buss has written a good article for Chief Executive magazine about nurturing a leader's visionary skills.   Buss argues that compelling visions for an organization don't simply come to someone like a bolt of lightning from the sky.  Leaders can cultivate their ability to chart the right vision for the future.  Mainly, he argues that leaders need to maintain close contact with customers, rather allowing others to tell them what customers want and need.  They have to avoid becoming isolated at the top.  Buss also argues, "Be your own customer. Put yourself in the role of the customer and walk through every touch point, to see what they see. Are there gaps in the relationship? Can some touch points be shortened or made easier?"  

Buss notes that substantial new threats and opportunities often emerge at the periphery of an organization.  Andy Grove of Intel once observed the very same phenomenon.  I wrote about Grove's ideas in this regard in one of the early chapters of my book, Know What You Don't Know.  Buss explains how to see those issues emerging at the periphery, rather than the core, of the organization:

Spot weak signals at the periphery. Attempt to gain early detection of developments that could potentially interrupt or disrupt your business so you can take them into account as early as possible. Introducing “randomness” into your life can be one way to do this. Iconic and visionary architect Buckminster Fuller, for instance, used to pick up a magazine at random from a kiosk when he traveled and force himself to read the entire publication during his trip so that he kept in touch with parts of the world he otherwise knew nothing about, the authors said.

I've heard the Buckminster Fuller practice many times, and it's always struck me as a very effective technique.  It does not take much effort, but it can deliver strong dividends at the unlikeliest of moments.  It also enhances your general knowledge - useful as you network and engage with a variety of external and internal constituencies to the organization.  

Do CEOs Matter More Today Than In Decades Past?

Do CEOs matter more today than in decades past?  A new paper by Timothy Quigley and Donald Hambrick suggests that they do.  According to this HBR blog post by Walter Frick, "The new paper confirms a pattern discovered by previous research: the CEO effect seems to be increasing over time. In other words, the CEO of a company is a more significant predictor of that company’s performance than at any time since the question has been measured, starting in the mid-twentieth century."  The scholars argue that perhaps the big strategic choices made by CEOs matter more as industries, and the economy as a whole, have become much more dynamic.   However, the paper cannot identify the main cause of this enhanced CEO effect, nor can it rule out any particular explanations.  It simply has documented this substantial increase in CEO impact. 

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