In this second part of my interview with ghSMART principals Kim Powell and Dina Wang, we discuss common mistakes CEOs make and why boards often hire the wrong candidate. In part one, we covered how their CEO Genome project, based on a decade’s worth of research and interviews, has identified four behaviors exhibited by the best CEOs: decisiveness, reliability, adaptability, and the ability to engage for impact. The findings will be published in the book “The CEO Next Door” available on March 6.
Joel: What are the implications of your CEO Genome project from a training perspective?
Kim: In terms of preparing future CEOs and individuals who want be CEOs, we’ve done a lot of research around common paths and experiences that help accelerate and build these behaviors. After doing all of this work, we’ve found that the single biggest underused asset in business are mistakes and things that don’t work. One piece of advice for CEOs is don’t waste your mistakes. The hardest thing for people to do is turn that lens objectively on something that stings and didn’t work the way you wanted. CEOs need to structure their time to reflect on what didn’t go well. It’s a mindset: Are you looking at it as a personal failure or an opportunity to learn? The best CEOs train themselves to view mistakes as opportunities: Own them, learn from them, and then move forward and address them. It’s a commitment to really think about failures differently. With how fast everybody runs these days, we don’t take enough time to do that.
Dina: For a more tenured executive, this is a reminder to reflect on their mistakes and what they’ve learned. Our research will help people understand which of these four behaviors they’re going to be most naturally strong at and find ways to address the ones that aren’t their strengths. You can see, based on your profile, the types of roles, industries, and companies where you can really shine and be distinctive. As coaches and folks working with CEOs, we help people think through that.
Kim: One of the CEOs we interviewed, when reflecting on his first CEO role, mentioned he did not realize how much he was actually “renting” the founder and former CEO’s antennae for change and ability to adapt. It was not naturally his skill set. Kudos to him, he recognized the need to complement that capability via others on his team to ensure that was filled. Otherwise, he knew they were going to make mistakes when they didn’t adjust quickly to customers and market needs. It’s important to have that self-awareness and know where you are naturally strong or weak. Then you can really think of constructing your team in way that complements you.
Joel: How have the results of the CEO Genome project changed your practice at ghSMART?
Kim: What hasn’t changed is how we continue to ground our work in deeply understanding the business outcomes the CEO must drive. Our business scorecard is still where we begin our journey. That said, this work has enriched and made more explicit how we look for and help coach improvement on these behavioral patterns in the CEOs we work with.
For example, at first blush it was a surprise to see the research show that the things that lead to hiring are not always the things that lead to performance and vice versa. Upon reflection, it confirmed a lot of what we as practitioners have seen in board rooms that don’t use an objective, rigorous and structured hiring process.
Dina: It’s not necessarily changed our process. However, I have found that with some boards and some executives, this is a really helpful framing tool. Some folks respond better to being shown some of this statistical analysis. Some people just respond and learn in different ways. For those who prefer to see quantitative data, they feel they’re better able to buy into this. It helps message to and influence folks to make the changes that have been hard for them to buy into.
Kim: I think it crystallizes the challenge around boards getting swayed by what they see in the moment when hiring a new CEO. They may be blown away by the charisma of a great salesperson who paints a compelling picture with their words. The CEO Genome research has helped provide more fire-power for boards to say, wait a minute, this isn’t necessarily what’s going to drive the result. I hope this helps democratize our process. Our assessment process forces an objective view, because we are grounded in a results-orientation and set of bespoke outcomes for the business at hand. Hopefully the Harvard Business Review article and now the book will push these findings out more to individuals who won’t necessarily be able to hire us for their critical leadership decisions.
Joel: I agree this is one of the main challenges with boards, where most have never been a CEO and have that Hollywood view of the role. When it comes time to select a CEO, they decide based on what they think a CEO should be. I see this done over and over again. Hopefully your research will guide people to make better hiring decisions. What about the gender issue? Is this something you all address in the book?
Kim: That’s a great question. We do have some insights on gender that you’ll see in the book. We interviewed a number of female CEOs. We’re not going to feature or focus on the gender question, at least not in the book, but we might at a later date. There’s a future set of analyses I can envision that would be really exciting. When you consider other underrepresented minorities based on race and ethnicity, frankly it is difficult to find a large enough sample size to run the research we want to run. With women we do have hopefully a large enough sample. That will be the next continuing wave of work of the CEO Genome project. Our belief is that the research will resonate with some women that they can become CEOs even though they don’t look like or have the background of the perceived “typical” CEO.
Joel: You’ve taken the positive view here. Is there a negative view, with behaviors that correlate surprisingly to poor performance?
Dina: Being too nice is often an issue. Likeable people get hired, but they often strive for affinity as opposed to making an impact. This usually doesn’t end well. We’re by no means advocating that people should be jerks. However, they must face conflict head on and manage through it and not be afraid to make good decisions because people won’t like you.
Kim: One issue we often see is CEOs who do not carve out enough time to think forward into the future. If you have too much of a short-term orientation and are busy putting out fires, you are a lot less likely to adapt and pivot. You must be able to handle today while thinking about tomorrow. I especially see this in the start-up, growth tech, growth equity space. They are growing so quickly, with so much happening today – I must hire 60 people in the next 30 days, for instance. Getting those CEOs to proactively protect some time to be out in the industry with customers and think longer term is really a challenge. It’s something that they need to be doing to create a long-term, viable entity.
Joel: I call that managing the future. It’s the CEO’s job. Nobody else is on it. Everybody else gets to manage the past and present. What about the perceptions of CEOs? Did the CEO Genome project unearth anything surprising around credibility?
Kim: One of the things we saw is that the CEOs who are highly reliable practice what we call “radical personal accountability.” When you look at credibility inside an organization and with employees, these CEO hold themselves personally accountable. That creates credibility. For example, there was a CEO in a turnaround situation who had to do some tough cuts and make some difficult decisions. During that time they collected 360-degree feedback and published it verbatim publicly inside their organization. As they updated this over time, it created a lot of internal credibility. Employees were impressed that the CEO and his management team were willing to accept tough feedback and act on it. When you get the sense that leaders are transparent and doing what’s right for the organization, it automatically increases their credibility. If we had more leaders acting this way I’d imagine we’d make a dent in the broader issue of credibility that many business and public leaders are facing today in our society.