How to be a successful CEO is a process. When you are a CEO in the storm of the corporate world, you miss small pleasures in life. You have a tendency to forget things like sleeping better and enjoying having breakfast with your family without being rushed into taking a plane or going to the office. The other frustration is seeing your own legacy and reputation being destroyed a couple of years after you exit the organization. That’s very frustrating.
One of the challenges is maintaining and growing a brand as a CEO, especially when you manage a global company. How do you shine in the industry? It is by leading the company not out of conviction, but out of need and being able to deliver results. You need to be able to turn things around and have a long-term strategy. Here are ways on how to be a successful CEO.
Solutions
Is it a leadership failure when no one is following you where you’re trying to take them? Your success stems from getting the company to come up with its own solutions. Most of the time the solution is always inside, it’s never outside. You need to get a buy-in from the team you are leading by helping them see through their ideas.
Controls
People say that if you want to assassinate somebody, you throw many charges on him/her and hope that one of them sticks. When you are doing your work right, you don’t need to worry about malfeasance that might be committed by your team. It is important to have controls in place to protect everyone in the company, especially people who make financial decisions.
There are times when CEOs are controlled by the company boards such that they can’t make any independent decisions to the extent of interfering with the operations. In most public listed companies the boards have real power and control over what the CEO role is in this highly unusual position of power. One of the mistakes that companies make is to allow the CEO to determine and set their own pay.
If you were given the opportunity to set your own salary and pecks, what would you do? Would you look at the market rate for comparable companies and set it there, or would you set it under the market rate? Or would you set it over market rates, and that’s human nature, you know, people are, for lack of a better word, sometimes greedy.
An example is of CEO Carlos Ghosn, the first person in the world to control two companies on the Fortune Global 500 simultaneously between 2005 and 2018. The board gave the CEO too much slack. It shouldn’t matter that many of the board members were Nissan employees and had their salaries determined by the CEO because they still had a duty to govern the company.
Checks & Balances
If you are so reliant on one person, that points to the failure of governance, in my view, because if that person has a heart attack and gets hit by a bus, what are you going to do? If I were the director of such a company, I’d be working very, very hard to ensure that there was a fallback plan in case something happened to the CEO. For companies whose brand depends on the CEO’s personality, its stocks usually drop and may even post net losses when he/she leaves.
How to be a successful CEO requires that a company should have checks and balances to handle issues that arise out of employee malpractice. They should learn to solve issues behind closed doors by the directors at the board level. The executives should not take it upon themselves to run to the authorities. The decision to cut out the appropriate internal governance body and run to the court can lead to an absolute fiasco, destruction of shareholder value, and a significant negative impact to the brand.
Alliances & Mergers
Don’t be one of the turnaround artists; CEOs who turn around the situation, then after a three-year period things collapse. How to be a successful CEO involves avoiding quick fixes that don’t last in the long run. If it is an alliance, you are forging between two companies to make it stronger and sustainable taking into account the interests of both parties.
Mergers, unlike alliances, are more complex to lead as the concerned companies have to agree on every single aspect. A merger kills enthusiasts because it’s very difficult to make a situation where nobody appears as a winner and nobody appears as a loser, it is practically impossible. An alliance is a lot easier as you will be trying to come up with a middle way, a compromise that will converge more of the two companies’ operations without fully combining them.
Succession
Any company that has a CEO who is indispensable should know that he/she can become an exceptional liability, especially if it does not have systems and structures. Every organization should have a succession plan. That means people internally who can take up the role and enable a smooth transition or identify potential external potential individuals who can come in and learn fast and continue/establish a growth trajectory.
