As a consumer goods CEO told us, “You are speaking through an extraordinary amplification system. Nevertheless, excellent CEOs can take useful steps to boost the quality of the board’s advice to management such as the following: Effectiveness: Promote a forward-looking agenda. The problem is not an intellectual one, but a social one: individual and institutional biases and clunky group dynamics can diminish with the effectiveness of the team and its processes. 16 What do I stand for? Excellent CEOs form a small group of trusted colleagues to provide discreet, unfiltered advice—including the kind that hasn’t been asked for but is important to hear. Careful analysis typically produces findings that surprise even the savviest CEOs. At some point, however, it becomes important to look at the company with fresh eyes and to decide on the next set of bold moves, realign the organization, refresh the team and processes, and so on. For more, see Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “Bubbles pop, downturns stop,” McKinsey Quarterly, May 2019. In their experience, even asking other CEOs how to approach the job doesn’t help, because suggestions vary greatly once they go beyond high-level advice such as “set the strategy,” “shape the culture,” and “get the right team.” Perhaps that’s not surprising—industry contexts differ, as do leadership preferences—but it illustrates that fellow CEOs don’t necessarily make reliable guides. A crucial first step is discovering which roles matter most. Not surprisingly, data also show that externally hired CEOs are more likely to move with boldness and speed than those promoted from within an organization. By emulating the four strategic-planning best practices, you can boost the ratio of insight to effort and align the organization around a strategy that is faithfully executed, constantly questioned, and regularly refreshed. The CEO is often out of touch with this reality: on average, less than one-third of CEOs report problems with their teams. CEOs should limit their involvement in tasks that can be dealt with by others and reserve time to deal with unexpected developments. Scott Keller and Bill Schaninger, Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change, Hoboken, NJ: John Wiley & Sons, 2019. Managers pushed to agree to stretch targets find at year’s end that they are being held accountable for full delivery; sandbagging ensues. 20 Learn about . … To the best of my knowledge, it is compulsory for anyone applying for a consulting track at McKinsey, no matter if you are undergrads or MBAs. Chris Bradley, Martin Hirt, and Sven Smit, Eben Harrell, “Succession planning: What the research says,”, Michael Bazigos, Aaron De Smet, and Chris Gagnon, “, Fred Adair and Richard M. Rosen, “CEOs misperceive top teams’ performance,”, For more ideas about how to address common cognitive and organizational biases, see the, See Sheen S. Levine and David Stark, “Diversity makes you brighter,”, Inessa Love, “Corporate governance and performance around the world: What we know and what we don’t,”, For more, see Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “, Stephanie Vozza, “This is how successful CEOs spend their time,”. You will see that magical phrase mentioned numerous times in white papers and research on these websites: Boston Consulting Group, Deloitte, PWC and Accenture. 2. If you are uncertain whether you have to take it or not, assume that you have to, and practice for it before having confirmation from the HR. To answer the question, “What are the mindsets and practices of excellent CEOs?,” we started with the six main elements of the CEO’s job—elements touched on in virtually all literature about the role: setting the strategy, aligning the organization, leading the top team, working with the board, being the face of the company to external stakeholders, and managing one’s own time and energy. Before long, CEOs forget how to say “I don’t know,” cease asking for help or feedback, and dismiss all criticism. Don't reuse case frameworks. “Agility” is one of most widely used and misunderstood management buzzwords of the past decade. Decision making: Defend against biases. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Many CEOs have confided to us that they worry about asking the same few overstretched “usual suspects” to take extra assignments because they can’t trust the people who would otherwise perform them. tab. Excellent CEOs go further: they reinforce and act on a corporate purpose (the “Why?”) that involves not just making money but also benefiting society. However, sensible individual processes can cohere into a clumsy system that results in more confusion and wasted effort than accountability and value. It’s incumbent on the leader to set the direction for the company—to have a plan in the face of uncertainty. Why the disconnect? For the IT cases, I recommend reading the articles of the consulting companies about these topics on their websites (Hundreds of them if you google by key words "agile", "Digital", at McKinsey… Other stakeholder groups (such as regulators, politicians, advocacy groups, and community organizations) also will require a portion of the CEO’s time. Top teams that work together toward a common vision are 1.9 times more likely to deliver above-median financial performance. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe, Select topics and stay current with our latest insights. Academic research also demonstrates that traits such as drive, resilience, and risk tolerance make CEOs more successful. ... Boston Consulting Group is an Equal Opportunity Employer. they appeal to the curious : Clients want insight into what competitors and other leading companies are doing. THE STRATEGY SURVEY THE ORG SURVEY. Good CEOs ensure that their companies have an effective risk operating model, governance structure, and risk culture. Research shows that sound corporate governance practices are linked with better performance, including higher market valuations. 8 CEOs should also calibrate individual relationships, maintaining the distance to be objective but enough closeness to gain trust and loyalty. 14. Listen carefully and ask clarification questions. They also ensure they have a diverse team, which has been shown to improve decision-making quality. Culture: Go beyond employee engagement. Management processes: Ensure coherence. There were non-intuitive and innovative recommendations among the “best practices" for reopening the county. The best CEOs also teach their office staffs to help manage the CEO’s energy as thoughtfully as their time, sequencing activities to prevent “energy troughs” and scheduling intervals for recovery practices (for example, time with family and friends, exercise, reading, and spirituality). If you would like information about this content we will be happy to work with you. To help CEOs figure out where they stand with respect to the mindsets and practices described in this article, we developed the assessment guide in Exhibit 2. Relationships: Think beyond the meeting. What’s more, the emphasis that CEOs should place on individual responsibilities will change over time. What do I want others to say about me as a leader? hereLearn more about cookies, Opens in new Michael Bazigos, Aaron De Smet, and Chris Gagnon, “Why agility pays,” McKinsey Quarterly, December 2015. A company has only one peerless role: chief executive officer. Scott Keller and Bill Schaninger, Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change, Hoboken, NJ: John Wiley & Sons, 2019. Further, by expressing these intentions as part of the rationale for their decisions and actions, CEOs can minimize the risk of unintended interpretations being amplified in unhelpful ways. Chris Bradley, Martin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds, Hoboken, NJ: John Wiley & Sons, 2018. For example, when McKinsey arrived in Germany in the 1960s they pretty much swept across the country bringing in US best practices. They also spend time with their companies’ 15 or 20 most important “intrinsic” investors (those who are most knowledgeable and engaged) and assign the rest to the CFO and the investor-relations department. What follows is a detailed look at these mindsets and practices. 17 17. From analytics to product development to marketing and sales, functional excellence is a requirement for thriving organizations. Digital upends old models. Learn more about cookies, Opens in new The slightest thing you do or say is picked up on by everyone in the system and, by and large, acted on.”, Perspective: Guard against hubris. Resource reallocation isn’t just a bold strategic move on its own; it’s also an essential enabler of the other strategic moves. Our hope is that all CEOs, new or long-tenured, can use these tools to better apply their scarce time and energy. The most successful CEOs quickly establish an office (often including one or two highly skilled executive assistants and a chief of staff) that makes their priorities explicit and helps them spend their scarce time doing work that only CEOs can do. tab. Industry and geographic trends account for 25 percent. Many corporate social responsibility programs are little more than public-relations exercises: collections of charitable initiatives that generate good feelings but have minimal lasting influence on society’s well-being. CONSULTING REIMAGINED. Most transformations fail. Organizational design: Combine speed with stability. We also drew on what we’ve learned from helping hundreds of CEOs to excel, from preparing for the job and transitioning into it, through navigating difficult decisions and moments of truth, to handing their responsibilities over to a successor. 8. Fred Adair and Richard M. Rosen, “CEOs misperceive top teams’ performance,” Harvard Business Review, September 2007, hbr.org. First-time board members usually benefit from a structured introduction to what it means to be an effective board member. We also offer a self-assessment guide to help CEOs (and CEO watchers, such as boards of directors) determine how closely they adhere to the mindsets and practices that are closely associated with superior CEO performance. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Rather, we’ve observed that the best CEOs are ordinarily excellent in a few areas, able in all others, and challenged in none. Please click "Accept" to help us improve its usefulness with additional cookies. 18 We'll email you when new articles are published on this topic. There’s good reason to do this: headlines that carried the word “crisis” alongside the names of 100 top companies appeared 80 percent more often from 2010 to 2017 than they did in the previous decade. A proper assessment of organizational health takes in everything from alignment on direction and quality of execution to the ability to learn and adapt. collaboration with select social media and trusted analytics partners 1 Board members’ outside views on these topics can help management without compromising executives’ authority. Practice with peers. This is the reason why Eloquens is centralising in one place all the best ready-to-use powerpoint slides, excel files and methods used by Strategy Consulting firms, for download. If the consulting career path sounds like your kind of environment, then you're in the right place. Hiring McKinsey & Company, The Boston Consulting Group (BCG) or Bain & Company is not a luxury all professionals can afford. CEOs of B2C companies often like to make unannounced visits to stores and other frontline operations to better understand the customer experience that the business provides. However, “top” or “best” are vague terms, and in the shadows of the MBB firms stand many excellent consultancies, both as service providers and employers. Operating model, governance structure, and Robert M. Galford most widely used misunderstood... 50 most value-creating roles in any given organization, only to get bogged in! With you the best go one step further and reframe the reference for! Those down into 18 specific responsibilities that fall exclusively to the extent they can it means be... Problem solving approach treats each client problem as unique sectors develop a understanding! 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