Over the last several years, I have had the honor of working with many CEOs across a range of industries. In addition to our organizational due diligence and talent assessment work, I actively coach somewhere between two and six executive clients at a time. Our coaching style is very “hands-on and in-the-trenches-with-you.” I spend at least one day on site with my coaching clients each month, helping them think through a wide range of challenges. In a recent conversation, one CEO asked me, “So what is the most common challenge your clients present during coaching sessions?” It was a great question and one that inspired me to look over my notes from the past few years.
My most common CEO coaching topic has centered around, “How do I get my board members/investors to believe in me and the path our company is on?”
There is a wide variance in the level of trust between board members and chief executives. Not surprisingly, the leading driver of that trust is performance. CEOs who meet their financial and operations objectives gain more trust than underperforming CEOs. However, the correlation is not 1-to-1. I have seen many instances where the CEO of a successful company loses the trust of their board members, despite posting strong results. Why is that?
The most common mistake that CEOs make is, in an effort to curry support from their management teams, they fail to take ownership of their boards’ decisions. I had a CEO client whose board asked him to drive a strategic review and competitive analysis initiative. The CEO agreed that this was a priority, but failed to push the effort forward, claiming he could not identify the right external experts to support this effort. After multiple board meetings in which the CEO demonstrated little progress, the board decided to quarterback the process. After a competitive bid, the board selected a vendor (in a vote that included the CEO). At this point the CEO had a choice: he could actively partner with the strategy consulting firm and champion the program, or continue to let the board drive. He chose “the low road.” The CEO repeatedly positioned the initiative to his team as “the board’s ideas” or what “[Board Member X] told us we had to do.”
This absence of leadership had several effects. First, it hurt the execution of the program and the value the organization derived from it. Management team members took the CEO’s lack of ownership as a license to minimize their engagement. Participants were less transparent than they could have been, seeing it as a pothole to sidestep rather than an opportunity to leverage. Second, the CEO’s approach did not serve his own goal. His leaders did not respect him more because he “fought the board.” Team members respected him less because it highlighted the CEO’s lack of influence over the board’s decision making. Third, it created an unhealthy chasm between the board and the management team. All of the outcomes were negative, and yet I see this story play out frequently – and not just among CEOs. Across organizational levels, I hear leaders say some form of “I don’t agree with this, but the boss is forcing me to do it” or “We just need to make the boss happy.” This approach will occasionally garner empathy, but it will never garner respect… and it is a morale killer. Doing just enough to appease the boss becomes the goal, rather than enabling the organization’s success.
When great CEOs and executives disagree with their superiors’ decisions, I see them take a fundamentally different approach:
1. Respected leaders transparently voice their concerns, but do so with a solution-oriented mindset. They think through their superiors’ underlying intent, and propose alternative ways to achieve the same objectives. In doing so, they optimize on what is good for the greater organization, rather than just their own team. I hear strong leaders say something like, “I am fully behind what we are trying to accomplish, however, I wonder if this other way will accomplish the same goal with less broken glass. Could you get behind that?”
2. If they feel that their superiors’ decisions are ethically or fiducially unsound, they have the moral courage to escalate their concerns. Integrity is what separates high character leaders from the rest – the shepherds from the sheep. Strong leaders draw a line in the sand and put themselves at risk rather than putting the values of their organization at risk. They start by voicing their concerns to their direct superior to give them a chance to modify the situation before elevating it to the next level.
3. Once an ethically sound decision is made, they own and champion it, even when they disagree. When challenged by subordinates, strong leaders say things like, “I hear your concerns. They are valid and were taken into account. But, we think this is what the organization needs from us right now.”
This is “the high road” of executive leadership. Of course, if taking the high road was easy, everyone would do it. We are all tested on a regular basis, and these are our “moments of truth.” Taking ownership, and leading with character, is what makes us worthy of the awesome responsibilities we have been afforded.