In the November-December edition of the Harvard Business Review, the journal published the 2019 edition of “The Best Performing CEOs in the World” [1][2]. As in previous years[3], CEOs around the globe were ranked for their financial performance as well as their environmental, social and governance achievements. The top 100 were then listed in order.
Not all of us are CEOs. There is a lot we can learn, however, from these successful individuals who have been, on average, in their roles for 15 years. This longevity of performance does not come about by accident.
Below are some of my thoughts distilled from this year’s article.
Focus on more than just the bottom line
Over recent years there has been a move away from a strict focus on shareholder value. CEOs increasingly recognise the need to also focus on the need to serve their employees, customers, suppliers, and communities. This was highlighted by the 2019 signing of a joint declaration by 181 U.S. CEOs who make up the Business Roundtable.
Learning vs Operating
In the first year of their tenure, best-performing CEOs adopt a learning mindset. There is an urge to want to get straight into ‘execution’ mode to prove credentials, however, successful CEOs resist this. They find that learning more about the system they are operating in allows them to better execute because they understand better how the system works.
Communication
Successful CEOs communicate. This does not mean they talk a lot. They talk, listen and ask questions. They also seek to understand their audience which allows them to craft their message appropriately. Good communication is necessary during both good times and bad, however, it is especially important during times of downturn. Full transparency with stakeholders is important to build confidence and promote trust.
Building Relationships
The longevity of successful CEOs relies not just their performance, but also on the relationships they have with those groups and individuals who make decisions about the CEOs future. In most cases, that is the Board of Directors and the individuals that make up that board. Developing relationships outside of the boardroom and the business environment allows these stakeholders to get to know more about how each other operates. This helps the directors develop confidence that the CEO has the ability to lead in all situations, good and bad.
Dealing with complacency and overconfidence
When things are going well, there may be a tendency to relax and cruise for a while. This is when things can go wrong as we take our eye off the ball momentarily and become complacent. The best performing CEOs continue to reflect, ask questions and look for opportunities. They also work with coaches, mentors and their teams to make sure they haven’t missed something. [4]
Summary
The men and women listed in the top 100 weren’t always CEOs. They came up through the ranks and learned valuable lessons along the way. These lessons contributed to the longevity of their success. The lessons for us all, then, are that the skills discussed above can be applied by us all working at any level in the organisation:
- Understand who your stakeholders are, get to know them and understand what is important to them. Don’t just focus on the bottom line;
- Adopt a learning approach to your environment. There is always something more you can learn about the system that will help you execute more effectively when you need to;
- Communicate often and transparently;
- Build relationships to allow those who can influence your career to build confidence in your abilities and develop trust in you; and
- When things are going well, acknowledge your success, but continue to challenge yourself and surround yourself with others who will challenge you.
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[1] Reference: 2019. The Best Performing CEOs in the World, 2019. Harvard Business Review 97: 46-52.
[2] Clicking on the link will take you to a suite of three related articles; (1) The Best Performing CEOs in the World, 2019; (2) The CEO Life Cycle; and (3) The CEO’s Guide to Retirement.
[3] This is the eighth edition of HBR’s ‘Best Performing CEOs’ list. Previous lists were published in 2010, 2013 and every year since.
[4] When I was a junior Officer of The Watch in the Royal Australian Navy, my captain once said to me, “If you think you’ve got everything covered, you’ve missed something.”