The CEO’s Three Biggest Blind Spots …and how to eliminate them
According to industrialist Henry Ford, "failure is only the opportunity more intelligently to begin again." As I review the statistics about failure rates among CEOs, it seems clear that the corporate world is missing opportunities to learn from failure. In 2005, Harvard Business Review cited a study showing that two out of five new CEOs fail in their first 18 months in the role. As alarming as that 40% failure rate sounds, a more recent report from top strategy consulting firm Strategy& showed that it’s getting worse. The study indicated that annual turnover among CEOs at the world’s 2,500 largest companies had soared to a record high in 2018. Among those terminations, 20% were involuntary. It’s an unfortunate trend that negatively impacts organizations’ stability, progress, and profitability. Although the data was from large companies, the pattern can impact organizations of any size, including credit unions. What’s behind this ongoing phenomenon of break down at the top level of leadership?
I believe there are three major blind spots that can cause a CEO (or any senior leader) to crash and burn. Not all leaders struggle with these issues, but they can be career-killers for those who do. From my own experience as a CEO as well as the experience of others in executive roles, these problem areas don’t arise only from obvious sources such as flawed character. Many challenges are almost invisible, aspects intrinsic to the typical CEO’s job description. Like a driver in heavy traffic, a leader needs to check for dangerous blind spots and know how to deal with them.
Blind spot #1 – They are isolated.
They say, “it’s lonely at the top,” and surveys show that it’s true. Half of CEOs experience feelings of loneliness in their roles. Some isolation is inherent to the senior position, which carries the solitary responsibility of making many of the hard decisions. The often-frenetic pace of the job also makes it hard to find time for professional connection and conversation with other leaders. The burden of responsibility can lead to feelings that further isolate, creating a challenging blind spot.
With weighty issues, the risk of making a bad decision – or even a good one that will have painful consequences for others – can bring feelings of fear that undermine the leader’s confidence. In those times of self-doubt, the CEO rarely feels free to lean on those above (the Board of Directors) or those below (the Executive Team) for moral support. Doing so would seem to expose weakness and erode the leader’s reputation. As a result, the CEO decides to go it alone. Decisions are too often made without the full benefit of advice from those best equipped to help. When this occurs, leadership can come across as disconnected, lacking in objectivity, and even self-serving.
In contrast to feelings of fear and self-doubt, some senior leaders seem to believe they are invincible. The resulting overconfident zeal can blind the leader to their need for input and advice from their Board or their team. Although there is value in trusting one’s instincts and going with the gut at times, the consequences of a mistake at the executive level are greatly magnified. Going solo can also alienate and offend supporters (including Board members and direct reports). Their valuable input isn’t just ignored, it’s never even requested.
How to eliminate this blind spot:
According to the Merriam-Webster Thesaurus, an antonym of “isolation” is “camaraderie.” It describes a feeling of closeness and fellowship, and it relies on mutual trust.One appropriate antidote to isolation for the CEO is connection with peers – the result of intentionallydeveloping professional relationships with other CEOs or senior leaders. For me, the benefits of a monthly lunch meeting with the CEO of another company included fellowship, encouragement, and insight. As trustworthy, non-competing peers, we each became a sounding board and strategic advisor to the other. This safe environment dissolved our fears, broke us out of our isolation, and made us better decision-makers. Participation in a local or national CEO roundtable would provide a similar benefit.
Another fruitful source of connection
is the Board of Directors, beginning with the Board Chair. As long as there is
clarity about roles and responsibilities, a healthy professional relationship
between the CEO and the Chair can feel like a partnership. The roles are
interdependent, with....-->
According to industrialist Henry Ford, "failure is only the opportunity more intelligently to begin again." As I review the statistics about failure rates among CEOs, it seems clear that the corporate world is missing opportunities to learn from failure. In 2005, Harvard Business Review cited a study showing that two out of five new CEOs fail in their first 18 months in the role. As alarming as tha...