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How to Know When It Is Time To Go

Category : 2018

What do Jeff Immelt, Travis Kalanick, and Howard Schultz share in common? Besides a healthy net worth, these executives were three of the 919 CEOs in publicly traded North American companies that either resigned, retired, or got fired in 2017-the most movement in the top spot in a decade.

Shultz wanted to get back into the workings of the business, specifically, the emerging Starbucks Reserve brand. After 16 years at GE, Jeff Immelt’s move was planned, but acccelerated by three months. Travis Kalanick left Uber after five major investors demanded his resignation-at the same time the company was short a CFO, CMO, Gen Counsel, Chief Diversity Officer, and Senior VP Engineering. But who’s counting?

C-level leaders with low social capital (a weak professional network) tend to stay where they are until forced to move. Executives with a broad network of business relationships are more likely to proactively explore options.

How can a C-level or senior executive stay ahead of the wave of corporate change and make an orchestrated transition rather than face an abrupt departure? Here are five questions C-suite executives need to answer when contemplating a move.

  • Does the company need to go where you can’t take it? While few of us are omnicompetent, boards increasingly expect the CEO to be successful at everything. While a C-level executive needs a broad knowledge and skill base, trying to do everything equally well or attempting to create the impression you can do it all is counterproductive. If the company needs to move in a direction the CEO isn’t equipped to take it, the top executive needs to demonstrate the courage to move to a job that is a better fit.
  • Are board conflicts increasing in frequency and intensity? Any group of highly-intelligent, honest people will engage in conflict. Patrick Lencioni reminds us that is a trait of a healthy team. The conflicts that signal it’s time for a move are more than disagreements about the business. When working relationships deteriorate into mutual toleration, board members transition unexpectedly, or when direction is determined without input from the affected executives, the forces of unwanted change are beginning to build.
  • Are there more bad days than good days? If a C-level leader isn’t having a rough day here and there-maybe even several in a row, he/she is likely not doing much. When a leader dislikes the job more than he likes it or finds that her energy is gone by 10 AM most days, it may be time to find a place that will again capture the leader’s passion.
  • Were you not selected for a promotion that fit your competence profile? While this is not a tell-all indicator, it is one to keep in mind. When an opportunity that fits a leader goes to someone else less qualified without explanation, or with an explanation straight from the marketing department’s pen, it might indicate it is time to move on. When you are not “in the loop” for important conversations, when decisions are made that affect you without input, or when responsibilities mysteriously get shifted to another team, change isn’t far away.
  • Do you have a reputation you can’t outgrow? Although he has performed in a wide range of roles, when you think of Jim Carey, Dumb and Dumber or Ace Ventura quickly come to mind. Even when acting in a comedy, Morgan Freeman comes off like a wisened Zen master. Alec Baldwin is one of a few people in the world who can be a jerk and get paid for it. Actors can get type-casted. A leader can get role or reputation-casted. If an executive can’t convince senior leadership or a board he can perform well in another role, it might be time for a move. Every leader encounters a failure or two. But if a mistake or a period of poor performance hang over a leader like a cloud, it is time to consider a move.

Novelist Ayn Rand is right-“You can ignore reality, but you can’t ignore the consequences of ignoring reality.” An effective leader is a prepared leader, someone firmly grounded in reality-even when that reality indicates it’s time to consider new options.


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Is Your Brand Positioning You for Your Next Job?

Category : 2017

The perks of some jobs are nothing short of regal. How would you like a no-limits salary package, frequent first-class travel to exotic destinations, multiple residences, luxury cars, and guaranteed employment for your lifetime?

If that sounds like a job for a king (or queen), you’re right. The world’s 29 reigning monarchs enjoy privileges like these — and more. From the well-known House of Windsor to the lesser-known kingdoms of Bhutan, Brunei, and Tonga, being king is a career to die for—or more often, a career that isn’t yours until someone dies.

Earlier generations occasionally sped up a royal succession with a bit of homicide. In modern empires, the long life spans of reigning royals create a unique challenge for their successors: How do you prepare for and demonstrate you are ready for a job that won’t be yours for decades?

While most executives aren’t in line for a gilded throne, they share with future monarchs the need to use a current role to get ready for the next. For a leader wanting to move to the C-suite, using this interlude to enhance a personal brand is a vital step. Consider these actions:

  • Know yourself. Few of us are omnicompetent. While a C-level executive needs a broad knowledge and skill base, trying to do everything equally well or attempting to create the impression you can do it all is counterproductive. Leverage your strengths and develop the ability to quickly identify people who can compensate for your non-strengths.
  • Seek insight from those around you. Complete a comprehensive 360 review with anonymous input and use what it tells you. However far off something seems, there is a modicum of truth you are wise to consider.
  • Get a mentor. Very few companies provide the coaching and guidance a developing executive needs to move up in an organization. Find someone who has succeeded where you want to go, has nothing to gain or lose in your success, and learn all you can.
  • Cultivate accountability. The farther you go and the higher you get in an organization, the less people around you will tell you the truth. Some of us think of “accountability” as a tough conversation that occurs when you don’t accomplish something. That’s not what we are illustrating here; it’s getting insight and input, so you don’t fail. Include regular conversation with someone you trust who will ask candid questions and challenge your thinking.
  • Invest in the Package. The brilliance of a brand is easily dimmed by dated packaging. You can’t avoid the reality that people make an initial assessment about who you are by what they see. Dress for the job you want, not the job you have. Ensure you have the physical stamina to lead a team of energetic, young professionals.

In a highly-competitive market, investing in yourself while you prepare for your future is more than good branding, it’s smart business.


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EXECUTIVE PRESENCE: It’s More Than Commanding a Room

Category : 2017

Executive recruiters look for it.  Leadership surveys try to measure it. A long list of consultants and coaches want to help people get it.

This hard-to-define, yet widely desired trait is executive presence.

Search for a concise definition of executive presence and the 1.2 million results Google offers include an endless list of attributes and behaviors – appearance, charisma, communication, gravitas. humility, social skills, style, body language, composure, decisiveness, and more.

One of the “experts” defines executive presence as “the ability to master perception. That’s making people feel like you are honest or compassionate – even if you aren’t. Coaching people to master perception, project an image, and command the crowd makes the journey to develop executive presence sound like a manipulative sales technique or a one-style-fits-all formulaic approach to leading people.

Presence happens. Executive presence is a cumulative effect. What composes presence is paramount. Presence is the outcome of developing authentic character, expressed through the self-awareness, social awareness, likeability, engagement, communication, and appearance that frame genuine character into executive presence. Without character, executive presence is posing at best, and in a weaker moment, a well-positioned ruse.

Emerson said, “To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment.”  When an executive focuses on perception and projection, people will likely see an inauthentic representation of who the leader supposes they should be—not who the leader is.

When you have authentic presence, you are able, as John Eldredge suggests, to “let people feel the weight of who you are.”

Are you in the Dallas/Fort Worth, TX area and do you want to explore how to develop executive presence? We will partner with the Dallas Business Journal at 9 AM on November 6, 2017 to present an interactive seminar about this important topic.

Registration Information:  https://www.bizjournals.com/dallas/event/161896/2017/developing-executive-presence.


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Leadership, Loyalty, and a Leader’s Brand

Category : 2017

Does one question really tell it all? If it tells the story for a company, can a similar question tell the story for a company’s leaders?

In 2003, Bain consultant Fred Reicheld reported the singular factor most indicative of customer behavior was loyalty, measured by simply asking, “What is the likelihood that you would recommend Company X to a friend or colleague?”

While the now, well-known Net Promoter Score has its critics, from Google to Apple to Facebook to Walmart, the list of companies using this process is both impressive and extensive: http://www.netpromotersystem.com/about/companies-using-nps.aspx. Why? Bain discovered companies achieving long-term profitable growth had NPS scores two times higher than the average company.

Take NPS to a personal level. How much should an executive care about loyalty to the brand associated with his or her name? If customer loyalty drives strategic growth for a company, how much does loyalty to a leader impact growth at a tactical level?

Over a decade ago, Gallup’s research confirmed people do not leave companies as much as they leave managers. If a leader wants to engage and retain his or her top talent—the people most directly responsible for results, investing time in building associate loyalty is a prudent endeavor.

For an executive trying to create differentiation in a competitive space, the leader will find value in frequently and honestly answering one question. “How much do people like working for you?” Loyalty (and engagement) aren’t about a willingness to work for a leader, loyalty is defined by wanting to work for a leader.

That kind of loyalty only grows in the fertile ground of trust. People work with someone they respect, they follow someone they trust. That means while a leader ascends the career ladder, authentic engagement, transparent communication, and personal involvement with the team remain priorities.

This journey isn’t about gaining popularity. Loyalty isn’t the result of giving people everything they want. Loyalty grows from giving people what they need. A leader’s associate satisfaction score grows when a leader stays engaged, speaks the truth, promotes autonomy, accepts responsibility, and practices accountability.1

Asking, listening, and acting are a sure path to creating loyalty—with a customer and with a team.

1 Harvard Business Review, Proven Ways to Earn Your Employee’s Trust, by Carolyn O’Hara, June 27, 2014.


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You Can’t Build a Puzzle if all the Pieces are Round

Category : 2017

Those jigsaw puzzles with pieces that are all the same size and shape were designed by people who love to inflict pain on others. Imagine what kind of person would create a puzzle with pieces that are only round. That person seems to be driving how teams are built in companies today . . .

From Starbucks to Salesforce to Staples, workplace diversity is getting some much-needed attention. The Census Bureau says the U.S. population is over 35 percent multicultural. That fact and some uncomfortable analytics are promoting companies to actively pursue greater diversity in their teams.

Beyond it being the right thing to do, building greater diversity across our enterprises has a direct impact on results. McKinsey & Company found “a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.” Boston Consulting Group’s study of 171 companies found “a clear relationship between the diversity of companies’ management teams and the revenues they get from innovative products and services.”

But one dimension of diversity we don’t hear much about—where the round puzzle piece is dominant, is cognitive diversity. Harvard Business Review researchers Alison Reynolds and David Lewis define cognitive diversity as “how individuals think about and engage with new, uncertain, and complex situations.”1

The impact of cultural diversity is lost if companies continue to hire “in their own image” or if recruiters take the safe route and only present candidates who are highly skilled and highly compliant. To streamline and accelerate decision-making, many senior leaders build teams of executives that think alike and readily agree, when what they need is a better process for making decisions within highly divergent points of view.

From problem solving to decision making to innovation to market expansion, executive teams accomplish more when there is both cultural diversity and cognitive diversity. In other words, the most productive teams don’t readily agree. They engage in what Patrick Lencioni calls “productive, ideological conflict: passionate, unfiltered debate around issues of importance.”

That kind of diversity will make people uneasy. It will challenge the insecure. Cognitive diversity will force static organizations to change their xenophobic cultures and willingly consider issues from multiple angles, giving equal consideration to unpopular options when making decisions that solve real problems and accelerate profitable growth.

Cognitive diversity is apparent in teams that pursue—

  • Collaboration more than cohesion.
  • Alignment more than agreement.
  • Unity of purpose more than unanimity of thought.

Regina Dugan, head of Facebook’s secretive Building 8 hardware team is right. “You have to get to the place where you aren’t made comfortable by the fact that everyone is the same, but rather feel inspired by how different we are.”

Executive branding helps a leader define that difference and use it productively to advance a career—and bring value to an enterprise.


1Harvard Business Review, March 30, 2017. Teams Solve Problems Faster When They’re Cognitively Diverse. https://hbr.org/2017/03/teams-solve-problems-faster-when-theyre-more-cognitively-diverse

 

 


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A Step Up or a Push Out? The CFO’s Choice

Category : 2017

Google the phrase “CFO Departures” and the headlines aren’t pretty—

  • Shares Shed 7% in Reaction to CFO Departure
  • CFO Abrupt Resignation Doesn’t Pass the Smell Test
  • Company Climbs Following Q2 Sales Update, CFO Departure
  • CFO to Leave After CEO Departure
  • Company Files for Bankruptcy, Announces Departure of CFO

To eliminate some of the ambiguity surrounding CEO and CFO departures, financial journalist, and owner of Exechange, Daniel Schauber, developed the Push-out-ScoreTM. Schauber’s model measures nine dimensions of publicly available data surrounding departures including the form and language of the management announcement, the notice period, the official reason given (“to pursue other interests”), and succession. Recognizing the link between executive changes and stock price, Schauber tries to determine the likelihood an executive was forced to leave.

A scatter diagram for 226 departures over six months confirms why researchers struggle to define the relationship between CEO performance and CFO termination. Generally, stock price volatility increases with a higher Push-out-ScoreTM. But, if shareholders think a CFO departure reflects deeper financial issues, a departure can raise a stock price. In short—it’s complicated.[i]

How do a Push-out-ScoreTM and a fluctuating stock price connect with executive branding? If a CFO doesn’t have a strong personal brand, there is a higher likelihood a CEO transition will mean a job change for the CFO as well.

While a sitting CFO often has deep knowledge of financial metrics and broad organizational expertise, McKinsey found that less than 15% of the CEOS they follow moved to the top job from CFO, CMO, CTO, Chief Counsel, or Head of Strategy roles. KPMG research with 500 executives in six countries found similar results. [ii]

The most frequent reason given for CFOs not making it to the CEO chair is the CFO’s lack of operating acumen. Explaining the P&L to investors is an essential skill for both a CFO and CEO. Owning the numbers and having a direct connection to what created the results (customers and business operations) is often what CFOs lack.

It is universally known that the closer you are to the customer and revenue, the better your chances of surviving a corporate upheaval. Behavior, not spin, creates a personal brand. CFOs wanting to move to the CEO spot are wise to proactively—

  • Make customer visits a priority. The better a CFO understands a customer’s business, the more relevant the CFO becomes to his or her top executive.
  • Strengthen relationships with line of business owners and operators within the company.
  • Get known for owning an opinion of the business—and candidly sharing it.
  • Build a brand as someone with innovative ideas and straightforward solutions.
  • Create a network with CEOs outside the current organization.
  • Join a board outside the company.
  • Develop a succession plan. An indispensable CFO isn’t going anywhere. [iii]

A PWC study puts CEO turnover at 14.9 percent in the world’s largest 2500 companies. That translates to over 370 opportunities for CFOs to consider a move to the CEO chair. Building a brand now could mean a greater opportunity in the future.


Details of the research are at

[i] https://corpgov.law.harvard.edu/2017/06/08/retired-or-fired-how-can-investors-tell-if-the-ceo-left-voluntarily/.

[ii] CEO Monthly: KPMG reveals nearly a third of global CEO’s feel their CFO’s are not up to the challenge.

[iii] A Deloitte study titled Four Faces of the CFO offers valuable insights about developing the skills critical to moving to a CEO role https://www2.deloitte.com/us/en/pages/finance/articles/gx-cfo-role-responsibilities-organization-steward-operator-catalyst-strategist.html.