The Measure of a CEO

 

 

RulerI read an interesting article recently in which the author, a seasoned business consultant and attorney, referred to half of all the CEO’s out there as being “below average”.  There were no studies cited, no research statistics offered, and no indication of what “average” is, was, or has been.  The article offered one example of a high profile CEO who was fired three months after his initial hire date for failing to produce profits commensurate with his salary!  Was this something the company did not realize when they hired him?

How do we measure the quality of our Chief Executive?  Do we only work with those who come with a demonstrable track record of success?  Do they know how to make money?  Are they good with people?  Do they have clear vision?  Are they skilled facilitators, mentors, directors and growth mongers?  Can they build a sales team, create a marketing plan and implement operational strategy?  Are their values clear, is their mission strong and does their very presence in the boardroom exude integrity?

If the answer to all of these questions is a resounding “YES”, you haven’t found a CEO; you’ve found Superman or Wonder Woman.  I work daily with CEO’s.  Lot’s of them.  In fact the foundation of my consulting practice is CEO skill development and strategic planning which puts me in direct one-on-one contact with these high level power brokers.  My experience often leaves me wondering why anyone would want to take on this extremely complex, thankless, unforgiving and emotionally draining task.   The CEO’s I know work incredibly long hours, take all the company problems home, directly answer client complaints, smooth over human resource issues, answer to profit driven BOD’s, and at the end of the day, offer everyone else the credit for company accomplishment.

The CEO position is also the most tenuous position in the organization.  Anyone who has been around for more than a minute knows that founding owners, managing boards and Chairman don’t make mistakes.  It’s always the CEO who goes; the CEO who ultimately takes the fall or pays the price for poor company performance.  So why do they do it?

The CEO’s I know can’t walk in a room and not be a leader.  They are driven to accomplishment, goal and task.  They are deeply committed, driven to personal and organizational excellence, focused on the strategic vision of their industry and organization.  Are they perfect?  Not a chance.  Ego driven?  Absolutely.  Difficult to please, often argumentative, aggressive, and in many cases abrasive to those closest to them?  Yes.  Should we accept this kind of behavior? No.  But we also need to take the time to understand where the behavior emanates from.

To cite an example, one of my clients recently took on the CEO role of a high growth, seemingly successful $50 million dollar manufacturing company.  Once inside, she realized that the reason the profits were so outstanding is that the previous owners had never provided for the appropriate infrastructure to maintain quality in production.

When my client recommended a major and costly reorganization to support quality in their process the Board of Directors began to second guess their choice for CEO. Couple this with the normal fair of several employee related legal claims against previous management, a management team in transition, a cash flow shortage and yes, you may be dealing with someone whose fuse is pretty short.

While the tender of success in the workplace is measured in dollars I find it hard to judge a CEO negatively simply because they negotiate the strongest personal compensation package possible.  I often ask skeptics a simple question when I am queried about the validity of a client’s compensation package; “Compared to what?”  Even professional compensation specialists have a difficult time agreeing on CEO compensation as the points of reference are as varied as the individual needs of the organization.

I want to be clear that I am not condoning poor performance nor am I suggesting that there are not compensation plans out there that cross into the land of absurdity.  I am saying that we need to take a long hard look at the men and women who have the courage to take on these high profile positions.  Hopefully when we do, we will see leaders we can be proud to follow, leaders we can trust to do the right thing, and leaders that will promote the health and well being of American business.

Sharon Jenks is CEO of The Jenks Group Inc., a California Consulting Company that specializes in strategic planning and executive development. She can be reached at http://www.thejenksgroup.com.

 

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This Dog Don’t Hunt

dog, executive ideas, chief executive officer, CEO, consulting ideas, Sharon Jenks, Ed Jenks, Jenks Group Blog

About five years ago, and definitely against my better judgment, I agreed with my wife’s idea to adopt a fourth dog into our household. Stella came to us when she was seven. Beat up, malnourished, broken leg and on top of the physical trauma, she absolutely hated men moving me right to the top of her watch list. A purebred American Foxhound, she was a beautiful dog and clearly of value to someone. As we searched her past we found she had been part of one of the few remaining hunt groups in the United States. As a hunt dog, she was part of a pack of hounds that chased foxes, mountain lions and coyotes accompanied by a Hunt Club of Riders and their mounts bounding over jumps along the way.
I was finally able to contact one of the handlers of the pack kennel where Stella had been born and raised and offered them the story of how she had been found in the woods alone, broken up, and near dead. The response was very simple; Stella had decided to stop hunting left the pack and therefore had been abandoned by the club on the spot. We were free to keep her or put her down and that was the end of the conversation.
Recently I attended a summit of Venture Capital folks and it was a really good day. It featured success stories of great partnerships, numerous presentations by eager entrepreneurs seeking financing for ideas or concepts, and a host of short topic speakers full of sage advice for an eager audience. There were presentations outlining the new funds, found money, the state of the VC industry, and even a few economic statistics for us to interpret as if we really understood them. There was however, one thing missing…
We have all attended our share of these functions and they are critical to the success of our industry; bringing us together and opening dialogue between otherwise almost sequestered independent operators competing for the same consumption community. We all inherently have something in common however that is typically not discussed; we don’t share our “This Dog Don’t Hunt” stories. My rule of thumb, after being in and around this business for the past 25 years, is that if you have more than one company in your portfolio, you have at least a 50/50 chance of owning something that is not producing at the level of your entry assumptions. We tend to bury those dogs quietly while showcasing the one or two that really hit it out of the park. I have often thought that it would be interesting to have a forum for companies to attend that could openly discuss those “dogs that don’t hunt”.
Checking ego’s at the door, wouldn’t it be interesting to have a dozen of your contemporaries review your “dog” and your entry assumptions for validation? Wouldn’t it be great to have an influx of new ideas from your community who all have the same expectations for returns that you do? The wealth of support and creativity that would be available to you certainly has the potential to turn that “dog” into a champion. No one benefits from an underperforming portfolio company; it certainly doesn’t help you attract new money, it takes valuable time away from your team, and most of all, it doesn’t allow you to fulfill the promises you made to your investors making future rounds more difficult to attain. This is also just from the fund side; it’s not much fun to be an executive on the other side either creating a lose/lose relationship.
I’ve spent my career with the dogs and I’m always amazed at what I find once we get them vet checked, the right nutritional program, some caring attention, and a firm hand on the lead that knows when to change direction, when to listen, and when to run. After having Stella for 7 years, I can’t say that she trusts me; we’re still working on that. But I will tell you that I have a hell of a dog whose head is up, she now runs in the same direction I do, she’s comfortable with the words I offer her, and she recently learned to shake hands after offering mine to her every single morning for five years. As a turn-around guy, that’s about as good as it gets.
Ed Jenks is a 25 year C-Suite Executive, a CEO turn-around specialist, Executive Coach and currently Sr Business Strategist at TJGI Consulting. Jenks resides in Solana Beach CA with his wife and business Partner of fifteen years Sharon who is one of the Nation’s leading Executive Behaviorists as well as a professional canine trainer.