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DownloadDo you want to increase the odds of becoming a CEO? Do you want to raise your game by learning from successful CEOs? Are you a new CEO anxious to avoid the pitfalls of the role? The CEO Next Door gives a clear road map on how to get to the top, which skills and behaviors to develop, and how to position yourself as a future CEO.
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The book describes the four behaviors that are statistically associated with success— decisiveness, engaging for impact, relentless reliability, and adapting boldly—and how to nurture these behaviors throughout your career. The key is to get results in the right roles and to get noticed for those results. Don't look at your career as a succession of jobs, but as a portfolio of experiences that show expertise, leadership, and specific skills. The book includes tips on the best way to interview for the position of CEO, what to do in your first six months in the role, and how to manage the board of directors.
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Above all, the book emphasizes that successful CEOs are made, not born, and anyone can succeed in the role with the right experiences and training.
There are four behaviors associated with success as a CEO: making decisions with speed and conviction; engaging with others in a way that drives results; relentless reliability; and adapting boldly to new challenges and scenarios. These behaviors are shaped by practice and experience and can be developed at any stage of your career. To get hired as a CEO your career trajectory should give you a wide range of experiences, real leadership opportunities, and in-depth knowledge about your chosen industry. Make sure you are noticed for the results you achieve. Once hired, you have two years to establish yourself as CEO. Move quickly to find any skeletons in the closet and to put the right team in place. Pay attention to the values and style you portray in your inaugural address and be sure to keep your calendar commitments focused on the important long-term issues. Finally, be prepared to spend 20% of your time managing the relationship with your board of directors and get to know them individually in the first six months.
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Most people assume that CEOs are born, not made—a bold and brilliant strategist with a flawless resumé and business superpowers. The reality is very different: CEOs come from a range of backgrounds and experiences. To gain insights into today's CEOs the authors analyzed data from the leadership-advisory firm ghSMART and made a number of surprising discoveries. The most important: becoming a CEO isn't about background or good fortune, it's about performance and the kinds of behaviors that can be learned.
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Only 7% of the thousands of CEOs in the dataset graduated from an Ivy League school; most did not plan early in life to become a CEO; and, far from being excessively egotistical, the most successful CEOs came from a background that emphasized teamwork and mentoring. Over a third described themselves as introverted and 45% had at least one major career catastrophe. Gender made no difference to whether someone would be a successful CEO although only about 4-6% of the largest companies are led by women. The most successful CEOs pick the right job and surround themselves with the right team. And finally, first-time CEOs are just as likely to succeed—or not—as someone with prior experience.
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The authors' research revealed four CEO Genome Behaviors that are statistically associated with success: decisiveness, engaging for impact, relentless reliability, and adapting boldly. These are all behaviors and habits that are shaped by practice and experience, and that can be developed at any stage of your career. These four behaviors are interconnected; and, which one is the most important at any given time depends on the industry, the company, and the challenge at hand. However, a basic proficiency in all four along with a particular strength in one or two, is essential to be a successful CEO.
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Decisiveness
Successful CEOs stand out for their decisiveness—being able to make decisions with speed and conviction. Take Greyhound CEO Steve Gorman. When he took over at Greyhound in 2003 it had lost $140 million over the previous two years. The parent company was coming out of bankruptcy and creditors were severely curtailing investment. Gorman knew that Greyhound risked liquidation; the stakes couldn't be higher. After spending some time getting to know the business, Gorman realized that Greyhound had too many unprofitable routes in areas with low population density. He decided, "We cannot have miles where there are no lights." He made the decision to reshape the company's routes around high-yield regional networks and committed totally to this vision. Gorman knew that a bad decision was better than no decision at all. When he left Greyhound in 2007 the company reported $30 million in earnings and went on to be sold for more than four times its 2003 value.
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To build up your decision-making muscles focus on making faster and fewer decisions, and practice getting better each time.
Faster decisions
Successful CEOs make decisions quickly, and they do so by following two key principles. First, they make the complex simple by focusing on what drives value in the business, job, or team. Second, they actively involve a lot of people in the decision-making process, to improve the quality of the decision and to build buy-in by the relevant stakeholders. But, they know that while everyone has a voice not everyone has a vote! Get input as part of the process but don't wait for consensus before making a decision.
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Fewer decisions
Successful CEOs recognize that they should step back from the vast majority of decisions that can be made by employees—which is easier to do if everyone understands the business framework. For example, as CEO of the Children's Hospital of Philadelphia (CHOP), Madeline Bell was drawn into the contentious issue of whether it would be better to use gel or foam in the hospital's hundreds of soap dispensers. The issue had the potential to polarize the staff and set a precedent for top-down decision-making. Bell decided that she didn't have the experience to make this decision, so she told the leaders of the debate to look down the chain of command, not up—look to the people closest to the day-to-day operations to make the decision. Bell knew that she shouldn't get mired in an issue like this, when others in the organization had the expertise needed.
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Ask a series of questions to triage the decision-making. Can this wait a week or a month without causing harm? Not everything needs an immediate decision. Will waiting bring more information that will help to make the decision? Or, will the delay bring no new insights? And, could the issue actually resolve itself?
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Practice
A decisive leader recognizes that there is no point in striving for perfection. It is better to move forward and continually improve, rather than agonize over every decision. Successful CEOs learn to take mistakes in stride, take ownership, and move on. They don't talk about "failure" but about inevitable mistakes that are the necessary scars of battle. They also realize that some emotional distance is necessary to be able to learn from those mistakes.
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One side effect of making mistakes is learning how to apologize. An effective apology should be personal, focused, and genuine. Don't make excuses and be sure to act quickly. Get all the facts out, admit what went wrong, and clearly articulate what needs to be done, including a plan to make sure the mistake doesn't happen again. Finally, reach out to diverse sources of information, to ensure you aren't acting on personal bias in making decisions.
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Engage for impact
Being decisive is the first step, but you also have to get the organization to act on your decision. This means being able to engage with others in a way that drives results.
CEOs have to engage with a vast range of stakeholders, often with divergent views and needs—customers, employees, shareholders, retirees, the media. Being likeable is an important quality for getting hired as a CEO, but it's not enough to be an effective CEO. Being too nice can backfire if you hesitate to make the tough calls. Rather, the key is to engage with others for impact, rather than affinity. This means understanding others' needs without pandering to them.
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Engaging for impact is like being an orchestra conductor. Like a CEO, the conductor is totally dependent on others to deliver results. S/he sets the musical vision, gets the players to accept that vision, and establishes the pulse for the group to perform the vision.
Lead with intent
A great CEO can get everyone behind the vision, from the janitor to the largest customer, explaining to each individual why their role is critical to success. People need to know where you're taking them and why. This means you have to be able to articulate the vision clearly to yourself; then carry out the intent of that vision in even the smallest action, decision, or interaction.
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Recall the overbook United Airlines flight in April 2017, when a doctor was physically dragged off the plane by a security officer? It was a nightmare scenario for United, captured in numerous cell phone videos that quickly went viral. The attendant just wanted to avoid further delays; the security officer just wanted to respond to the call for help from the attendant; the company's management just wanted to support the employees and save face. Everyone was reacting under transactional pressure—but none of these reactions served the aspirational intent of the company's professed commitment to customer service.
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When transactional intent fails to meet aspirational intent, the result is always costly.
Understand the players
The CEO has to be able to understand the stakeholders to get them to rally behind her decisions—going back to the orchestra metaphor, the conductor has to translate the score effectively for both the percussionist and the violinist. This means understanding exactly who the stakeholders are and what they want. The best way to do this is to develop the technique of 'perspective getting,' finding out what people think and feel.
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Scott Cook, founder of Intuit, used the power of perspective getting to build a $5 billion business. Intuit teams regularly spend a day watching their customers work, in order to understand the pains and problems that they encounter.
Perspective getting is critical, whether you are bringing a new product to market, winning over a board, or motivating a team to complete a project. Mentoring others is one good way to learn perspective getting—you have to understand the other person's needs to be able to mentor successfully.
Build routines
Regular rehearsals are the groundwork for an orchestral performance—similarly, leading effectively across the entire organization requires everyday habits and routines that build relationships with the stakeholders and translate those relationships into results.
Repeat the message, frequently, in numerous ways. Encourage people to open up and share critical information. Get out of your office and meet key stakeholders on their own turf. Former Starbucks CEO Jim Donald says he spent up to half of his time in the field, which meant he often heard about issues before his executives did.
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Relentless reliability
The key attribute to develop as a CEO is reliability. CEOs known for their reliability are fifteen times more likely to be high performing; and, candidates who are reliable are twice as likely to be hired for the job. Customers, board members, and staff all assume that a reliable leader will get things done. The trademarks of reliability are personal consistency, setting realistic expectations, practicing personal accountability, and embedding consistency into the organization.
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Personal consistency means not waiting until the last minute to get things done; not keeping people guessing about what your next project will be; and not over-reacting to every situation. It means creating clear expectations, so that your team can anticipate what your questions are likely to be. It means being on time for meetings, phone calls, and planes. It means making individual commitments clear in meetings; making lists and putting them into action; and being aware of your mood and how it affects your interactions with your teams.
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Reliable leaders not only actively shape expectations for themselves and their teams, they also watch for signs of implicit expectations coming into play. This is something that can apply throughout your career. When handed a project don't just say, "OK, I'll start on that;" instead say, "Here's what I'm going to deliver by when" (and make sure you follow through).
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Practicing personal accountability—holding yourself to the highest standards—gives you the right to hold others accountable.
Reliable organizations
Finally, to embed consistency across your organization, take some insights from the kinds of organizations where reliability is literally a matter of life and death. In high risk workplaces like oil rigs, aircraft carriers, and nuclear reactors it is critical to recognize that a minor slip-up is an opportunity to prevent a major accident. Madeline Bell recognized this at CHOP: instead of criticizing staff who reported near misses, such as almost giving a patient the wrong dosage of medication, Bell destigmatized mistakes by calling them good catches. The hospital even offers an annual Good Catch of the Year Award. Three years after implementing this program, serious safety events had decreased by 80%.
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Create the expectations that everyone in the organization is responsible for calling out problems and identifying solutions. A great CEO is someone who empowers all employees to raise their voices, and who stays close enough to the field to listen. A shared vocabulary, where everyone describes particular terms the same way and acts accordingly, is also important, along with consistent processes. Indeed, successful CEOs tend to have excellent organization and planning skills. A clear checklist can ensure that the routine stuff is always handled, freeing people to spend more time thinking about more complex issues.
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Adaptation is the key to corporate survival. Firms like Blockbuster and Kodak, that failed to adapt, paid the price. To be a successful CEO you have to learn how to navigate the uncharted, to turn the endless uncertainty the organization will face into opportunity and growth. This means letting go of the past—acknowledging that you are not going to win every time—and building your antenna for the future.
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To build your adaptable and resilient mindset, start by taking on novelty, something that is outside your usual experience and that makes you uncomfortable. This could be a big commitment, like spending a year backpacking through China; or a small step, like learning to play an instrument or developing a new hobby. Developing an adaptable mindset also means being willing to make lateral, unconventional, and even risky career moves to broaden your experience or leadership skills.
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Being adaptable also means being willing to let go of approaches that may have been successful in the past—past company strategies, prior business models, or your own personal habits. This last one, the personal habits, can be the hardest to let go, but also potentially the most productive.
Building an antenna for the future means spending a lot more time thinking about the long-term implications of everything you do today. Imagine yourself ten years from now: what might you wish you had done differently? It's not enough to study the market data, you have to look outside your own business, even outside your industry, to see signs of shifts in the wider landscape. Build a diverse network of bright, engaged people outside your field, an 'Inspiration Cabinet' that inspires you to see things from new angles.
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Be curious—it's a hallmark of an adaptive CEO. Gene Wade, co-founder and CEO of OneUni, keeps his antenna tuned with regular "premortem" exercises. He asks his team to imagine that it's 18 months in the future and they've failed—what are all the plausible reasons? Once they've developed a list of failure scenarios, the team then develops a signal list for each issue, the data, news, or trends that need to be tracked to stay on top of it.
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Finally, successful CEOs spend about 20% of their time with customers and stay in contact with the market to help spot future trends.
Most CEOs had no idea they wanted to be a CEO until later in their career. They got there thanks to a combination of getting results in the right roles and getting noticed for those results. Their actual paths to the top vary widely, but there is a general pattern that spans an average of 24 years:
The key takeaway from this is to not look at your career as a succession of jobs, but as a portfolio of experiences that show industry expertise, leadership, success, operational and financial skills, and (where relevant) international experience.
Career catapults
There are some CEOs who made it to the top in less than the average 24 years. In most cases these 'sprinters' undertook career catapults—an inflection point that accelerated them to the top. You can actively seek out career catapults if you want to rise faster. It is a risky approach, but a catapult will work if you align your supporters in advance, make senior management aware of the risks involved, make sure you have the budget and the talent to succeed, and stay actively engaged with your network throughout.
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Career catapults can be risky; but even overseeing what turns out to be a financially disastrous new product or getting fired from another firm has no negative impact on the likelihood of someone being hired eventually as a CEO and being a success in that role—as long as you don't repeatedly have the same type of blow-up. Portray any such mistakes as learning opportunities, not failures, and do not hesitate to take ownership for a blow-up.
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Big leap
The big leap means accepting the challenge of a role that is a big stretch from where you are now. Over a third of 'sprinters' made a big leap and sought out opportunities to take on new challenges before they felt fully ready. Krista Endsley, former CEO of Abila, made a series of big leaps—from marketing to leading product management to running a division within the company. When that division was spun off, she was the natural choice to be its CEO.
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You can make your own big leaps by seeking out cross-functional projects at your company to learn about other departments and functions; getting involved in the integration of a merger; or volunteering to lead or take part in a top-priority business initiative. Ask your boss for additional responsibilities; solve problems before you are asked; say yes to new opportunities even if you don't feel ready; and take on new roles in your personal life, such as civic leadership or volunteering.
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Big mess
About a third of 'sprinter' CEOs catapulted their careers by leading the way through a big mess. This could be an underperforming business unit, a recalled problem, or a failed implementation—the key is to figure out what went wrong, decide how to fix it, rally others to deliver results, and reliably deliver. Fixing a big mess is a great way to showcase all four of the CEO genome behaviors.
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You don't have to wait for a mess to solve—go out and find one. Alternatively, take the job no-one wants and make it a success.
Go small to go big
Almost 60% of 'sprinters' had, at some point, taken on a smaller role—either running a small company, or taking on a small unit within a larger company. Building a product, division, or company from the ground up is a transformative experience. Damien McDonald was a rising star at Johnson & Johnson, but he left the big company to take over a struggling division within a much smaller firm that gave him the opportunity to learn how to be a general manager—a move that paid off and led to him being appointed CEO of another company.
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Become known
Getting to the top requires getting results in the right roles and getting noticed for those results—in other words, being visible to the right people. This does not mean aggressively bragging about your accomplishments or having thousands of LinkedIn connections, it means building relationships for the good of the company.
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One way to get visibility with the right people is by having a positive relationship with your boss. Understand her goals, ask what her expectations are, let her help you, and keep her updated on the things that matter. If your boss is not aligned with the goals of the enterprise, make a move to a different role.
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It is also important to build your tribe. Have a network of powerful sponsors throughout your career, people who can introduce you to valuable opportunities. Share your aspirations with potential sponsors and ask for advice on topics relevant to them. Ask for help that is easy for a sponsor to fulfill and make sure to give recognition and gratitude when they do.
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Get noticed by building a bonfire—not a series of small fires that can be overlooked, but one big fire that cannot be missed. Make sure that you are positioned at an intersection where your contribution to a project or a department is visible in a lot of areas.
Take the initiative and ask for the next level of responsibility—just make sure you've earned the right to ask by delivering a strong performance in your current role. Portray the ask as a request, not a complaint, and align it with the wider goals of the organization. Don't be afraid to rock the boat, just make sure your actions will be seen as a brave contribution to the collective good and not reckless self-promotion.
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Finally, always look and speak the part; be in permanent public speaking mode. This means avoid being rude to assistants (they will tell their friends); don't act like a sycophant to those in power; and never be disrespectful to others. Don't lose your temper in front of others. And, assume that anything you post anywhere on social media will one day be seen by a potential employer.
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Closing the deal
You've made it to the interview round for the coveted top job. To ace the interview and close the deal, don't ask what the interviewer can do for you but what you can do for the interviewer.
Start by portraying yourself as a safe pair of hands—time and again, that is the one factor that decision makers focus upon, making sure they entrust this role to someone safe and reliable. This may not be the best way to proceed once you have the job, but boards hire on perception not on results. As noted earlier, being too nice does not get things done, but it does get you hired. Boards, and interviewers in general, consistently overemphasize soft skills such as likeability and confidence when making hiring decisions.
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You also have to speak the part—which means downplaying a foreign accent, avoiding esoteric or 'ivory tower' language, and staying away from management platitudes and consulting jargon. Avoid too much use of "I" and share stories of others' successes that were enabled by you.
Do your homework before the interview. Find out who you will be meeting with and what problems they need you to solve. To make yourself memorable, quantify your achievements, use vivid stories to illustrate your skills, and address any blow-ups in your past with a clear picture of what you learned. Practice the stories you want to use, particularly the ones for the opening and closing minutes of your interview—those are what people will remember.
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Set the interview agenda as much as you can. Enter the room knowing what you want the interviewer(s) to take away from the conversation. Have a list of talking points that will achieve those goals. Interview the way you will lead, by setting expectations.
Finally, don't take the job if: your gut tells you no; there's no credible validation that the business is sound or can be fixed; you don't have the decision right to hire and fire; you have no clear sense of why your predecessor left; you don't have complete visibility into the financial picture; or, you would have to change who you are in order to succeed.
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CEO archetypes
Most of the time, when a CEO gets fired its because s/he was a poor fit for the job needed. There are four general CEO archetypes; figuring out which one is you will save you from saying yes to the wrong challenge.
How do you succeed once you make it to the top? This is not just a more difficult version of the jobs you've held before, it's a whole new role, with new habits, assumptions, and relationships. A typical CEO takes two years to feel comfortable in the role; and a typical board takes two years to fire a flawed CEO.
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Hazards
There are five common hazards that CEOs—and other first-time senior leaders—must navigate in this new role.
Skeletons in the closet
In your first year make sure you grasp the shape of the business and get any skeletons out of the closet. Listen to your key stakeholders, get out into the field, and talk to the customers. You might find a critical gap between the board's expectations and the reality of the business; a hidden financial or operational bomb; a cultural blind spot that will stymie necessary changes; or, signs that one or two critical people are not up to the job or are planning to leave.
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The best way to deal with these skeletons is to fling open the doors and let the light in. Anything you reveal in the first six months will be seen as part of what you walked into, rather than your problem.
Too many demands
Everyone wants the CEO's attention—board members, shareholders, regulators, partners, customers, the media, the wider industry—which means you'll have even less time to run the enterprise. The key to managing all these demands for your time is to look forward: one or two years from now, is this going to matter? It's also very important to have a great administrative assistant, one who understands that the demands on a CEO are different from any other role.
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Give your calendar a thorough review at least twice in your first year and annually after that, checking to make sure that time and attention reflects the priority and complexity of an issue. Don't be afraid to say no; act as if you are a seasoned veteran, not the new kid on the block, when deciding which event to attend or commitment to make.
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Amplification
Everything you do as CEO is amplified. Smile often. Employ body language that conveys confidence and a positive outlook. Do not lose your temper, except on purpose! Recognize that you can use the amplification effect in positive ways, putting an optimistic spin on issues.
Not using all the tools
A CEO must set the strategy and vision for the enterprise, but too many fall back on old strengths and skills to get this done, not realizing that as CEO they have access to a whole new toolbox. An effective CEO should shape the organizational culture, by consistently articulating and modelling the behavior she seeks, by focusing her time and attention on what is important, and by the people she hires and fires. The CEO must also be comfortable with all aspects of financial engineering and investor relations. You can find someone to help you learn, but this is a tool you should master quickly.
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And, a CEO must understand the world of corporate diplomacy, the wider context within which the company operates. To be successful in this you need access to information and strong formal and informal networks.
The psychological maelstrom
To deal with the onslaught of life as a CEO you have to bring your best game. Create winning routines for yourself, the rituals that keep you grounded, such as taking the time to go for a run every morning. Be true to who you are, whether that means continuing to pursue a favorite hobby or taking time to spend with family and friends. Have a small network of trusted advisors outside of your business who understand the pressures you are under and can give you advice.
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Building your team
A new CEO must figure out how to turn the team into my team as quickly as possible. The single biggest setback for new CEOs, bigger than the five hazards just described, and even for those with plenty of management experience, is challenges building the team.
Start from the first minute of the first day—you never get a second chance to make a first impression. In your inaugural address give your assessment of today, your vision for tomorrow, and your values for the organization. Describe the broader view of what you see happening in the world that will affect the organization, outline your call to action, and clarify your leadership style. You will be giving versions of this inaugural address many times and to many audiences in your first three-to-six months. Make sure your daily actions constantly reinforce the message.
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Avoid what seem to be "safe" people bets. You will be drawn to the image of safety, but it is better to act decisively from the start; problems will only get worse as time passes. Do not be tempted to maintain the status quo, to favor pedigree over track record, or to rely on the people who helped you land the top job. Avoid acquiescing to the board. Do not hire people who are just like you in terms of skills and background, but at the same time do not avoid talented people for fear they will be your competition.
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Develop your people plan and put it in writing, including a timeline and milestones. You need a team that has vision, that aligns with your goals and values, and that fills out the portfolio. Build your team with an eye to the future. Put stars in starring roles; critical people need to be able to deliver from day one, so don't waste time propping up underperformers.
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Have a consistent set of signals to communicate with your team. Actions matter as much as words. Drop by someone's office or factory floor just to say hello ("I'm paying attention"). Go to a meeting just to listen ("I know you've got this"). Thank the bearer of bad news ("It's ok, I want the truth").
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Dealing with the board
How well you work with your board of directors can make the difference between success and failure. The board is supposed to bring wisdom and sound advice, to act as a sounding board while keeping the CEO accountable. The reality is often quite different.
Successful CEOs spend 10-20% of their time working with the board and over 30% during critical times such as a merger. It is a mistake to assume that as long as the business is doing well the board will take care of itself. It's also a mistake to focus only on positive news and avoid the tough discussions; to keep the board at arm's length; or to overshare every little decision and thought.
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The first step to managing your board is to figure out who are the powerful members—which may not be the same as what is written on paper—and the roles played by the other members. Figure out who are the engaged partners, the ones who have good judgement and provide candid and useful feedback; ideally, such partners will be three-quarters of your board so seek them out and encourage them. The quiet expert is someone who has good ideas but doesn't speak up unless specifically asked; go out of your way to seek his advice in his areas of expertise. The rubber stamper just follows the lead of the CEO and the most powerful members; don't ignore her as a rubber stamper can be a liability in times of disagreement.
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The micromanager can undermine you as he is intent to prove his own worth; set clear parameters and if he is consistently disruptive work with the governance committee to remove him from the board. The CEO in waiting is a board member who might bring value, in which case work with her; but if she is disruptive this is another member you should try to remove as soon as possible. Finally, look for the activist, someone placed on the board by a hedge fund or private equity fund; you can't win her over, just be aware of her agenda and look for common ground.
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Communicate regularly so that there are no surprises at board meetings. Make sure you and the board agree on strategy and goals. Don't be afraid to assign homework; they are there to help you! Treat your chairperson or lead director as a partner. Above all, get to know your board members one-on-one, to build trust and familiarity. In your first six months sit down with each member and ask them about their experiences on this board, their past focus, and what they see as the priorities going forward.
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If you have to deliver bad news, be sure to communicate early and often, and be as transparent as possible. Don't be defensive; if you have to apologize, do so and move on. Discuss forward-looking metrics, not just the bad news in the rear view mirror, and come up with a plan to identify what is happening.
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Finally, face every day with the conviction that you are in this role to achieve better outcomes for others. Keep that in mind and you will become not just a CEO but a successful one.
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