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Book Extract: Start With The CEO

Transforming an organisation’s culture starts with a CEO who is willing to think differently and think big

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In a breakthrough executive trends global research study (2011 and 2013) I conducted with my colleague, Bonnie Hagemann, we clearly confirmed that identifying and developing high potential and emerging leaders is and will continue to be one of the top issues facing CEOs. In most organizations in North America, Europe, and the Far East 40 to 70 percent of all executives will become eligible for retirement in the next five years. In other parts of the world like South America, Africa, and the Middle East, the demographics are different, yet the challenge is the same. Most organizations in these regions struggle to accurately identify and develop their future leaders.

In our increasingly knowledge-driven world economy, organizations are right to fear this imminent brain drain, suspecting that when executives leave the firm, business may follow. Conversely, potential and emerging leaders—those most likely to rise to fill those highest positions—account for alarmingly less than 8 to 10 percent of the talent pool. That’s just in the United States. In other countries like Canada, Australia, the United Kingdom, Japan, and China (and in just about every country except India and various countries in Africa and South America) this issue is as pronounced as it is in the United States, if not more so. And so identifying, developing, and retaining such rare talent truly becomes a mission-critical global challenge for CEOs, senior executives, managers, and HR directors.

Given this indisputable global business challenge, the implication for current and emerging leaders is clear: The demand for outstanding leaders will soon surpass the current supply, therefore, if you are a current or emerging leader, you should be poised and ready to capitalize on substantial opportunities. Regardless of your own desire to ascend the ladder, one thing is certain: All organizations will be asking more of their leaders—expectations, demands, and pressure will only increase. The demand for truly outstanding leaders has never been higher, and, thus, progressive CEOs ...are raising the bar—as they must—in order to compete successfully on the global stage.

...none of the CEOs we interviewed reserved the demand to raise the bar for everyone else. All 14 were quick to agree that their organization’s culture, without question, started with them. Culture and operating success starts in the C-suite. Irv Rothman, the impressive CEO of HP Financial Services, said, “I think culture is absolutely the CEO’s job. I spent the first 180 business days in 2002 traveling around the world, talking to the HPA and contact people. All I talked about was our operating philosophy and our business model, not about customers, not about strategy, not about how we’re going to do things. Instead, I focused on: This is who we are. This is what you can expect from your leadership. This is why we think this is a good way to go, why we think you’re going to be happy working here.”

Eddie Machalaani, chairman of the fast-growing Bigcommerce, said, “Company culture starts from the top. It starts with the CEO first and foremost. You can’t fake a company culture if the CEO doesn’t live by that code and doesn’t live by the core values of the organization and then also surround himself or herself with the right talent and the right people. I feel really blessed with the talent and the people that we have in our organization. We couldn’t do anything we do without them.”

Where Are the Outstanding Business Leaders? As I travel the globe, meeting with senior executive teams, coaching executives, and speaking to various management groups, it is clear to me that the world of business has very few outstanding leaders. There are many very good leaders, as well as a vast supply of good leaders. Outstanding leaders are a rare breed indeed. The distribution of outstanding leadership, like anything else, follows a bell-shaped curve. I always knew this. You know this. Actually, everyone has always known this. But nobody really cared because being a good leader has always been good enough to keep a position and meet its basic requirements. But things are changing quickly. The bell-shaped curve is being completely upended, as all organizations increasingly need to possess a larger percentage of very good and outstanding leaders in order to compete.

I had suspected the need for this critical shift for a couple of years. As we were interviewing executives as part of our “Trends in Executive Development Research Study” (Pearson 2013), it became very clear. Beyond the actual research, an interesting qualitative theme emerged. When I ask executives to identify a great leader in their lives-someone who had a positive impact on them and helped shape their values-roughly 9 times out of 10, they mention a former teacher, coach, parent, grand parent, or friend, as opposed to a business leader. Not only were the leaders mentioned not business associates, many times those executives identify the opposite: the poor managers they’ve endured, the unkindness, the lack of mentoring, sometimes the nightmares. Why is this?

It’s not that those cited as poor leaders were bad people. More often, what became clear is that many managers are promoted far too early—certainly before they are ready to assume leadership roles. They are not adequately trained, coached, or mentored by more seasoned executives, whose experience and insights can dramatically shorten a manager’s learning curve. More than anything else, I believe the speed and pace of change in business—technology shifts, demographic shifts, and a more demanding operating environment—present daunting challenges to most leaders. Very few possess both a strong inner core of values, character, beliefs, thoughts, and emotions as well as the outer core leadership competencies that are required to successfully overcome the challenges of today’s global environment. In the end, too many executives are beginning to derail or have already derailed because of character flaws or, more likely, sheer immaturity.
Transforming culture starts with a CEO who is willing and able to “think different” and “think big.” Aside from these qualities, today’s CEO must possess a counterbalancing humility, an unshakable character and inner core and outer core leadership skills. Combine all of the elements and you have a great leader, able to walk the talk.

Excerpted with permission from Wiley, from Cultural Transformations by John Mattone and Nick Vaidya. Copyright © 2016.

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