Dr. Thomas J. Saporito
There are “good” boards and then there are “great” boards. Increasingly, research points to the link between effective board dynamics and shareholder value. In fact, 73% of directors polled in a recent study indicated that “great” boards are a substantial component of corporate success.
Ready or not, Generation X and Y now have their feet in the door of the C-suite. According to Forbes, 20 companies with market caps higher than $1.8 billion have CEOs under the age of 40. Thousands of smaller organizations have Gen X and Y leaders at the helm. Many more are working their way upward in the more traditional approach.By all accounts, this new cohort of CEOs has already produced some outstanding examples of leadership. Just how does each generation generate exceptional leaders? I have found that all superior CEOs share several key success behaviors. This CEO “DNA” includes passion for an idea; an intense, competitive need to be on top; the urge to drive projects to completion; and a strong belief that “if I put my personal print on something, the result will be better because it reflects my vision and discipline.” These traits are time-tested and observable by looking at a cross-section of exceptional leaders over the past 100 years. Henry Ford (20th Century), Alan Mulally (Boomer), Jeff Bezos (Gen X), Marissa Mayer (Gen X) and Mark Zuckerberg (Gen Y) would all score exceptionally high if assessed for these key leadership behaviors. Observing the current class of CEOs, an important question comes to mind: Is their success sustainable and scalable over the life cycle of an organization? This context is vital because many startups operate with a simple organization model that allows the enterprise to grow rapidly. However, such speed usually comes with a cost. It robs new CEOs of the time to develop personal insights and to process knowledge gained from extended organizational experience—vital leadership assets that come from life, practical expertise gained by time on the job and the opportunity to learn from the occasional bloody nose. As a result, overlapping and conflicting agendas from multiple constituencies can overwhelm new leaders. In addition to directors and team members, external forces begin to exert pressure, especially if the company goes public. An IPO brings investors, shareholders, analysts, banks, the media and government agencies to the table. The magnitude of this challenge in the digital age is something even Henry Ford could not begin to imagine. Mark Zuckerberg is a perfect example. During Facebook’s IPO in 2012, Zuckerberg received a dressing down from Wall Street analysts for, well, dressing down. Wearing a “hoodie” and jeans to a New York City investor meeting was a sign of immaturity, charged Michael Pachter, a research analyst for Wedbush Securities. The single biggest pothole on the next generation’s road to success is being oblivious to the dangers outlined above. Without awareness developed through either personal insight or professional guidance, young leaders can quickly get in over their heads. Groupon’s Andrew Mason found this out in 2012 when he was named to the “Worst CEO of the Year List” by Herb Greenberg of CNBC. Greenberg wrote, in part, “He [Mason] was an accidental manager, a software engineer who somehow stumbled into an executive position.” To skirt disaster, new leaders should be constantly vigilant for any business education and/or experience gaps. A multi-generation senior team, with a wide range of complementary experiences, can reveal blind spots and circumvent “generation group think.” Mentors and advisors who have “been around the block a few times” can also be invaluable sources of information. According to a study by the Kenan-Flagler Business School at UNC, approximately 80 million millennials are about to enter or are already in the workplace. The good news is that many have the right DNA to succeed. With the proper guidance and development programs, they will learn to build awareness, seek self-insight and tap into human resources, such as veteran executives, mentors and trusted advisors. A report by Boston College on creating tomorrow’s leaders shows that Johnson & Johnson, General Electric, Northrop, Marriott and Raytheon, along with other top-line companies, have already set up programs to assist X and Y executives with their journey. With this combination of nature and nurture, the latest cohort of leaders will continue to learn and grow, gaining the wisdom necessary to become outstanding CEOs worthy of their places in history.
The popular vision of the “lone hero” CEO leading the corporation to record profits is far from accurate in today’s increasingly complex operating environment. One individual simply cannot keep pace with the massive changes witnessed during the last five to ten years. To adapt, organizations are rapidly shifting to a shared-leadership model, where a carefully selected senior executive team aligns with the CEO to collectively drive the business forward.
Appointment of an “interim” CEO usually means an organization’s succession program has failed. In a joint RHR International/Chief Executive magazine study of 236 corporate directors, 95 percent of respondents acknowledged that CEO succession is critical. Yet, more than half (53 percent) rated themselves as “ineffective” in executing their responsibilities in the process. Forty percent of the directors surveyed claimed that they are not prepared for an emergency succession.
The business environment in which CEOs operate today is unlike anything experienced in past corporate life. Each decade following World War II has brought greater competition, regulation, scrutiny, and complexity—making the CEO’s role as leader, strategist and visionary incredibly demanding.
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