who wants to be a CEO?
When Rob Barnett, Transformation & People Director at Southern Water, stood up at our first Executive Dinner and asked us ‘So, who wants to be a CEO?’ the question sounded like a direct challenge. Did we? Not many brave hands were raised.
The financial crisis, increased regulation and scrutiny plus the pace of change means that the pressure on the CEO has increased dramatically. There is no escaping the fact that any CEO must steer both themselves and the company through this uncertainty to deliver returns to the investor base. And with investor tolerance lower than ever and the desire for a quicker return high on the agenda, failure to do so will result in a swift change at the top. With this backdrop it is little surprise that the average tenure of a CEO in the UK has dropped to around five years.
So why would you want to be a CEO? For the right individual there is no greater challenge or achievement, it is the pinnacle of their career ambitions, a long strived for goal which is well rewarded to boot. But having worked with many CEOs over the years, Rob sounded a note of caution: go for it with eyes wide open.
CEO is not a role you can prepare for, but you can manage the transition. Spend time managing the relationships around you before you move into the big office as they will sustain you when the bad times come. Be clear that the CEO job will be harder than anything you have done before and much more complicated than running a single part of the business.
what makes a good CEO?
Leadership needn’t be lonely – Don’t take it as gospel that things must be lonely at the top. The best CEOs are confident enough to surround themselves with people who are better than they are in key areas, and those who are too insecure to do so are the ones that ultimately don’t survive. Hiring a good team whose skills complement each other is key. Look for a balance where each brings a skillset to the table and has room to shine. The right executive team spend less time fighting each other and focus on moving the business forward together. The CEO who gets this right frees up more of their own time to get on with delivering the core returns.
Become a master of relationship management – This can be all consuming and the range of relationships to be managed make it a difficult juggling act. From the Board members to the Non Execs, regulators and clients, all are demanding of the CEO’s time. And the CEO’s role requires the ability to influence those around them if they’re going to make an impact. The CEO who does not manage relationships properly will fail. Equally the CEO who spends all their time managing those relationships to the detriment of the day job will also fail.
With that in mind, be prepared to sign away your work life balance, because there is simply not enough time to do the job. Hopefully you have surrounded yourself with that great team who can lighten the load, because every hour that you are not focused on the task you will be managing key relationships. Have a clear idea of which relationships you need to nurture and take a pragmatic and pro-active approach.
Understand your place in the ecosystem – Non Execs and Chairmen have a specific role to play in ensuring the success of a business and are personally accountable. If there comes a point when you are no longer the best person to lead the company it is their duty to act on that, however well you’ve managed those relationships and however strong they might be. Recognise this reality before you take on the top job. The CEO is hired for a specific role at that moment in time. Think of your tenure as CEO as a project, your skills are valuable for a certain period but may become invalid when the requirement changes. CEOs need to watch the macro economic environment, technological advances, industry trends and the mood of the business. Actively manage any change in the kind of CEO you need to be and the kind of relationships you need to have with your stakeholders to get ahead of the curve. If you can’t and you are no longer the right person for the job it is better to know when to walk away than to hang on and be fired.
Exercise self control and awareness – Without self control and awareness in today’s world the modern CEO will not survive very long, the old saying that ‘power corrupts’ is as true now as it ever was. Social media means that every bad decision and lapse of judgement is a mere headline away and the public have become much more discerning about what is right and wrong in a particular role. From disgruntled employees tweeting from within an organisation to consumer or shareholder action, as Rob put it “whatever is in the cupboard will probably end up on the table” so without self control the CEO is sunk. Perhaps historically they would have got away with it, not now. No one is untouchable.
Stand out from the crowd – Rob mentioned that all too often in the recruitment process the Board will play it safe. If a business needs to move forward or change direction the leader needs to be a strong person, someone with clear personality spikes that leaves you in no doubt what they stand for and what they are good at. The best CEOs are different from the norm, and it is for this reason that so few will make it, there are simply not many around.
A word on Ego – It is important to remember that everyone is expendable. While the CEO may believe it is their right to say ‘not in my company’ they have lost sight of the fact that unless they own it, it was never their company. They are simply the caretaker during a particular time. Keeping an eye on the checks and balances and listening to trusted advisors is what makes the best CEOs successful. The moment there is too much self-belief is the moment that success melts away.
so, do you still want to be a CEO?
At Egremont we are lucky to have worked with many CEOs. The best ones are those that are courageous and have a determination and drive to figure out problems while not letting go of their central humanity. That ability to connect with real people who do real work and do all of this with a sense of humour. Whatever your current and your future ambitions, work with people you like and trust, have a strong association with your business and you will succeed. If you think we might be your kind of people and you want to continue the discussion, why don’t you drop me an email?
about the speaker
Rob Barnett has held senior roles across a wide range of sectors and has worked closely as confidant with a number of CEOs, often first appointments, and Chairmen and Boards. He has been at the heart of Remuneration and Nomination Committees and the conversation around CEO succession and remuneration and how “what a CEO is” and “how to grow them” has changed.
He has also worked closely with the head-hunter community on identifying future CEOs and building executive management teams.