It’s All About the People

Here is a riddle: Picture a conference room with a meeting underway. There are twelve chairs around the table and eleven people in the room, leaving one empty chair. With this information, how do you tell who the CEO is?

If you answered the person sitting next to the empty chair, you solved the riddle.  People do not want to sit next to the boss.  Occasionally you’ll get a brave soul, but only until that person gets some crap about kissing up to the boss.  You’ll see the same behavior when you attend a dinner with your team.

I was facilitating a high-level strategy session in the southern region of the country with a high-end technology company.  This was a well-run, second generation, cutting-edge kind of organization that could advance concepts quickly and had a great platform for adding services.  In my pre-session discovery, I kept getting strange vibes from the executive team members.  They were all young, boyish looking kids, including the CEO, who had recently purchased the business from his father and was an extremely capable engineer.

The first day of our two-and-a-half day strategic planning session went off without a hitch. There was good discovery, common information, and a good historical look at themselves.  While they had an incredible platform, a great technological leader who had its engineering practice down cold, their sales were just not getting any traction and they were not able to leverage their platform.  In fact, a competitor with more money but less intelligence was gaining some ground on them and creating a large threat.  I planned to dig deep into the sales program on day two and I was already forming some ideas about how to help them.

That evening, they invited my colleague Sharon and me out to dinner with the team.  I usually have a strict rule that we do not engage in any outside evening plans with our clients and we rarely have dinner with them.  Instead we retreat and let them blow off some steam without having the resident consultants hovering about.  But something was bugging me after that first day, and I wanted to watch these guys in a lighter setting to see if I could figure it out.

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CEOs Are Hired to be Fired

CEOs, like football coaches, don’t retire.  They always get fired.  Let me qualify that: For those of us unafraid to lead change in aging institutions, who must grapple with people in key positions who have tenure all their own, and are willing to take on the challenge of financial deficits and uncooperative teams, know this: in the end, we go out as we came in.  We get fired.  Everyone loves us on the way in because we’re going to fix things up and make their future more secure.  But once you do that, and in the process begin to demand productivity and accountability, you’re just a pain in the ass to people and they are not afraid to speak up about it.

So, no matter how anxious you are to jump in and get started at your new job, wait until you’re operating under a contract that protects your interests now and in the future.

There are many things to consider and I strongly suggest you get yourself a great human resources attorney to help you.  You want someone who works on the other side of the corporate line–the kind of attorney who, in other circumstances, might be asking you some tough questions.  I far prefer and recommend you hire an ass-kicking female attorney as in almost all the human resources litigation battles I’ve been in, opposing counsel invariably is female.  They seem to talk the talk better and also, in the majority of cases, they are talking to corporate human resources which, in my experience, is predominately where you find female executives.

Every CEO should have personal counsel that stays with you throughout your career.  He or she should understand your motives, your idiosyncrasies, your style and should help you in crafting an employment agreement that works.  Once you engage, your attorney should be kept up to date with any compensation and/or performance reviews (or the lack of same), and any other correspondence that you feel may at some point come back to harm or question you.  When you get in a jam, and you will, you don’t want to be playing dialing-for-help or worse, trying to convince a new attorney that you’re a good guy or gal.

If you’re going into a hostile environment, or if you’re going into an environment hostilely, you want a contract that basically says, hey, we all understand this is already hostile so you can’t come back later on and whack me when someone gets upset.  There are always people in organizations who are upset about change.  Where your predecessor might have let them slide a bit on meeting objectives, or let them take Friday afternoons off, you don’t; therefore, you eventually will become a thorn in someone’s side.  This can come back on you later and you want to be protected against these kinds of issues or potential allegations that come with the territory.  Your help and decisiveness that everyone loved the day you walked in are often soon forgotten.

You also need to think carefully about a parachute of some kind that keeps you going if someone pulls the plug on you.  Most contracts for the top executive will carry some sort of buyout clause.  People get sick of you, the board gets sick of you, whatever, you need to establish how much cash you have to have in order to complete the timetable of transition.  There are several tricks here.  Most attorneys will want a two-step out; the first for “good reason” or “no cause,” and the second “for cause.”  If you think you ever get a shot at the former, good luck and God bless you.  Boards always want to terminate you “for cause” and if they can get something that sticks, you lose your ability to negotiate a safe exit and you’ll wind up fighting them in court or in arbitration.   Your contract should maintain the same financial deal whether you go happy or you go being dragged down the hall on your ass.  Setting the stage up front while everyone is thrilled to be bringing you on board is a lot easier than it is when the chips are down and you are, too.  Remember, on the day they hired you they made the best decision of their lives, and that enthusiasm should work to get you the best deal for your exit on the day you start.

Another key point is to establish a travel and expense policy that meets your needs.  Write it yourself, take it to the board, have them ratify it and publish it with human resources, the controller, your executive admin, and your audit team.

Your company travel and expense policy needs to be written in accordance with your needs, which is the reason you must write it yourself.  No one in the organization understands what you do every day and also what you can’t do in order to do your job.  For instance, it is not the best use of your time to be sitting in coach, trying to find wi-fi and unable to open your laptop all the way because the guy in front of you put his seat back and is snoring happily away while you’re trying to get down the terms of a deal you just agreed to.  I always expected, both of myself and the executives who worked for me, to use flying time as work time.  There is a reason why they created first-class seats.

Make sure that the board expects the best from you and also for you.  This means you don’t always have to say who you had dinner with or who you met with in Los Angeles.  There are so many examples of how this seemingly small issue can really hurt an organization that it’s critical to your success, and the board needs to understand why.

To emphasize my advice: At one point I was actively interviewing candidates to replace two board members that had far outworn their contribution to the organization.  I had polled my executive team to discern their thoughts and we were all in complete agreement.  I set off on a journey to find suitable candidates. This required both travel and dinners, which at that level were not at McDonald’s.  Through some condition of fate, the board became aware of my actions and before I could act, they did.  In my exit interview, one of their claims “for cause” was that I failed to accurately record who I met with and where I met them.  In the interview, I refused to name the folks I talked to or where I was.  They called this insubordination and added it to the list of “for cause termination.”

In one job I had, in a company with a commodity-driven product, where I went and who I met with had the potential to move the market, and not always in a positive way.  Keeping my travel quiet and not always telling everyone where I was going was critical to my success.

Be sure your travel and expense policy allows you to move with stealth, and act to your station which may mean expensive nights out with potential execs, or flying first-class with the folks you’re making a deal with, or buying someone an expensive gift or a bottle of wine.  In short, if your board trusts you, you need to spend what you need to spend to get the job done.  Having such a policy in place helps the board remember the agreement when it comes time to part ways.

When that time comes, try not to wallow around too much in it and never allow the mud to stick to your feet.

 

What a Bit of Executive History Shows Us

The 2000s, in my opinion, have been the most trying and difficult times C-suite executives have ever faced in American history—even tougher than the Great Depression.  Not only do we have a tougher business climate, we are faced with bigger competitors—global competitors that do not operate under the same set of rules as we do in the United States.  The idea that globally things are “fair and even” and “may the best managed company win” are concepts and beliefs shared by no one I know.

The global economy and unfair competitive practices aside, we continue to legislate and regulate ourselves internally to the point where we spend the majority of time wallowing around trying to create some kind of competitive advantage out of thin air.  I spend a lot of time thinking about exactly what happened to us as a country post World War II when we were filled with hope and confidence that when all else failed, we could outwork you.  I see great companies struggle with trying to find production efficiencies while their foreign competitors are allowed to flow products into the American market unchecked and unregulated.

I must admit to being part of the problem.  Here’s why.

Post World War II, our economy was made up primarily of family businesses that covered the range of our needs from food to clothing, transportation, and manufacturing craftsmanship.  Family businesses were passed down from generation to generation with the “secret sauce” that made the products or services unique to the region or geography they served.  You knew where your food came from, where your clothes were made, and you even knew the name of the family that made your car.

Our returning hero’s average age was twenty-six and many were returning to the family business, or turning to trades they had learned while in the military.  They were received into the workplace with open arms and the country was ready to step on the gas, fueling the largest generation of consumers the United States was ever to see.

The returning veterans were schooled in the family businesses and the discipline it took to operate them. They were charged with learning the tasks and craftsmanship of their trade because their mission was to protect the family homestead and their families relied on them.  Those that had new talents put them to use, still with the idea of making America stronger and their lives better.

The results speak for themselves.  Some of the strongest financial years in America were from 1945 through 1965.

And then things got tweaked.  Our foreign policy became unpopular.  The average age of an infantryman in Vietnam was twenty-two. Our youth (I was one of them) rebelled against everything that even resembled someone telling us what to do.  Belonging to anything was frowned upon.  I remember being at college one fall and seeing a group of guys spray painting a sign over a fraternity house door that said, “It’s wrong to belong.”  We had begun to question everything, believe in nothing but freedom—whatever that was—and reject the foundational pillars that had given us the best economic conditions in the history of the world with the highest standard of living yet to be experienced.

It took a few years for the rebellious students of the 1960s and 1970s to get around to work, as most of us went to college, and many on the six-year plan.  As we began to assume positions of authority, we slowly began to bring our rebellious nature to the workplace:  We threw out tradition. We didn’t need to wear a stinking tie–we worked better in flip flops.  We worked in cubicles because offices created “silos.”  I remember listening with rapt attention to one of the long-haired business gurus of the time with a primetime audience tell us to break down the silos, that big oil was making too much money, and the banks were ripping us off.  He had all the answers.  Get your people a meditation room–that’s what attracts the real talent.

We all drank that Kool-Aid and we changed the face of American business just as we had changed the face of American culture fifteen years prior.  The results speak for themselves.

Please understand that I am not accusing, because I was part of that movement and I was a leader at the C-suite level.  As I look back at my career, I always felt like something was missing.  No matter my success, I always felt a bit hollow.  I think back on my college days and wonder why I didn’t buck the trend and rush that fraternity.

We had all lost our business discipline.  I could make money; that was the easy part.  But I couldn’t control my attitude and approach to anything that resembled authority and control, and believe me, I wasn’t alone.  Everyone was stupid, no one could keep up with me, and I wanted to run ahead of them and demand they keep up with me.  Rules were for other people, not for me.  I was so good at the money-making part that most of the time, people would leave me alone because they knew inherently that they were better off for me running off like a mad man and putting money in their pockets.

I am sixty years old, and though I’ve lived life well I am still discovering and facing the truth about myself and looking to be better for it.  I want to be the person who finds a way to get through to other C-suite executives and prove to them that silos work, we can be competitive globally, it is okay to be a leader, and that the single greatest gift you can bring to an organization is discipline: order overlaid with a huge dose of forgiveness.  If we are to bring our economy back to any level of dominance, we must be disciplined in our approach and willing to subjugate ourselves to our mission.

 

So You Want to be a CEO?

Being a chief executive is like no other life experience; it’s a thrill no drug or activity can replace and you either love it or don’t want anything to do with it.  We are not mysterious creatures. Most of us have souls, and contrary to the general opinion of most people, the majority of us really do want the best for our organizations, the folks that work there, and the shareholders that believe in us.  We have feelings beyond greed.  Most of us are not overpaid for the responsibility we carry, and we do lose sleep over terminations and downsizing.  There is not a day that goes by that I do not spend time rethinking careers that have been lost over my decisions and the cost of decisions that I’ve made in terms of both human and financial capital.

This blog series is written for a specific community: those who envision themselves sitting in the top organizational chair.  If you are tentative and unsure if the top is the right place for you, please understand that it is not my intention to scare you away, but rather to inform and advise you of some of the challenges you may encounter.  Men and women who choose this career path are driven to it, and no matter what I write, they will believe they will be better than me, won’t make the mistakes I did, and most likely will read the book for entertainment, but not because they feel they need to. These folks are the “Type A”, “High D” driven people who cannot be stopped by anything.  They will make decisions quickly, recover if they make a mistake, and what they don’t know they’ll learn. They will outmuscle you if they are challenged.  Most of these individuals have great oratory ability, are extremely quick on their feet, and most important, don’t know how to be in a room without being the leader.

My target audience is the young up-and-comers who have a vision of sitting in the chief executive officer chair one day.  Those kids out there who think that they have what it takes to walk tall in the C-suite environment not simply for the money, but because they think they have what it takes to be there.  I say, go for it. No one is going to seek you out—you have to make it happen with a lot of confidence and as much experience as you can cram into your young life.  Never be afraid and never think that age has anything to do with intelligence; just keep your chin up and go for it.

I also thought about young entrepreneurs and young family business owners who are consistently tasked with fast growth and legacy building, who understand that success has its own rewards as well as its own consequences.  While you are not your father or your mother, you may well find that the ways of the past might not work for the future and thus change falls on you to manage.  Your family name may take you to the top spot but it will not make you invincible or worthy to lead an organization.

My journey has taught me many valuable lessons.  For those of you who want an opinionated insider’s survival secrets for being a successful CEO, this blog series is for you.