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 intentionally developing 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 reciprocal responsibility for the success of the organization. As mutual trust increases, the new CEO who has been reluctant to reveal struggles will feel freer to express feelings and concerns and to seek counsel. Similarly, the super-confident CEO will benefit from the broader perspective a trusted Chairperson can provide through challenging questions or respectful push-back. In my experience, the strong sense of camaraderie and partnership with the Board Chair spills over into the Board as a whole. As a result, leadership becomes more collaborative and wiser decisions are made.
Blind spot #2 – They are insulated.
When a leader is insulated from what’s really going on, their decisions may become irrelevant, their expectations may sound unrealistic, and their solutions may prove ineffective. The worst part of this is that they aren’t even aware. It’s a true blind spot. Some CEOs are insulated because they surround themselves with people who agree with them – “yes people.” The agreement can be overt or assumed. In either case, the CEO’s ideas are insulated from debate – reinforced rather than being tested. As a mid-level manager with a non-profit, I witnessed the senior leader transform an objective post-mortem evaluation of a disappointing event into a blame game. We didn’t overtly agree; however, none of us in the meeting were willing to challenge the boss’s denial of responsibility for what went wrong. In this situation, we failed to learn important lessons that could have improved future events.
Another source of insulation for the CEO is the “ivory tower syndrome.” The work of making major corporate decisions often keeps senior leaders in their offices or the conference room – far away from the front lines. In pursuit of strategic plans for future growth, they lose touch with what’s going on right now with their managers, their staff, and their customers. The insulation is so prevalent that most employees don’t expect their senior leaders to have a clue about what it’s like in the trenches.
The CEO’s actions or inactions aren’t always the cause of insulation. According to research by the MIT Leadership Center, the power and authority of the CEO’s position itself can insulate the role from reality, limiting the leader’s view of what’s really happening in the organization. They explained that there is risk in being the bearer of bad news; therefore, the CEO may not become aware of problems in a timely way, if at all. In my experience, staff may hesitate to fully disclose problems even when their CEO is kind and fair; it’s not about the personality, it’s about the status and authority of the role. I once discovered that a group had been holding back information in hopes of correcting a problem before I heard about it. Although they said I was a good boss, they were afraid to be honest with me. It revealed a true blind spot.
How to eliminate this blind spot:
To avoid the “yes people” trap, a leader needs to intentionally listen to a diverse set of voices – not just of those who already agree but of a broad representation of stakeholders. To get access to those voices, asking questions is key. It can be done many ways – in-person, by email, or by survey. One inquiry that results in a lot of good information is the question of what the company should stop doing, start doing, and keep doing… and why. Using that question to survey a wide range of people – middle managers, front-line staff, and even customers – can elicit perspectives that give the senior leader a much more honest picture of reality. Leaders should also ask staff not to hold back information, even when it is negative. As the late Colin Powell said, “Bad news isn’t wine; it doesn’t improve with age.” To pierce through people’s resistance to or fear of giving honest feedback, leaders should make it safe to do so by making responses anonymous.
CEOs and other senior leaders should also get out of their ivory tower as regularly as possible. There is power in the unspoken message of a CEO who is willing to show up on-site, walk the floors, listen to staff and customers, and ask good questions. When done well, these visits don’t provoke panic. Instead, they give the opportunity for staff to put a face to the name at the top of the organizational chart, to feel heard, and to be appreciated. The visits are also an opportunity for the CEO to give feedback. It should be composed mostly of affirmation for success, if possible, with a minimum of criticism.
To take the level of connection a step further, senior leaders can occasionally arrange to participate alongside staff at work. This might mean helping to unload a truck, riding along on sales or service calls, sitting in on training sessions, or assisting with outreach events. As I worked alongside our team, I learned about the things they were proud of as well as the things that frustrated them. Back at my desk, what I’d learn increased my empathy and helped me better understand the impact of executive decisions. I realize that in these activities, I probably got in the way more often than I helped my team. That’s okay. Even though a CEO’s contribution to the work may be minimal, the value of a leader’s willingness to get dirty on the front lines is incalculable.
One even deeper opportunity to remove the “insulation” is leadership cross-training. For example, a veteran VP on the executive team of a financial institution agreed to a temporary assignment helping open a new branch. Although the VP hadn’t worked in a branch for years, he knew how to handle cash and could pitch in as needed to help customers and do teller work. The staff was shocked to see a senior leader able to do what they did. “You’re the exception,” he was told. “Most of the management has no idea what we do or what we go through every day.”Experiences like this not only build credibility, they also give the senior executive a close-up view of the business. This can result in discernment of new opportunities, early warning of preventable problems, and a clearer view of how the organization is perceived by its customers.
Blind spot #3 – They are inundated.
Senior leadership roles are, by necessity, at the nexus of many streams of information. As a key decision-makers and drivers of progress, they need to stay informed of developments within or outside the organization. There’s a blind spot when they think they can manage information as they did in junior roles. Without systems and processes in place to handle the flow, the senior leader can be inundated and struggle to keep up. One organizational head described the feeling as being “nose above water” – as close to drowning as one can be. An inundated leader quickly loses touch with big-picture trends, becoming less responsive, less aware, more cut-off, and more frustrated.
To quantify the problem, one CEO catalogued a morning’s worth of info. Incoming digital materials included six voicemails, 134 must-read emails, four employee reviews, retirement plan amendments, three industry-expert blog posts, and ten routine financial reports. Hands-on material included two thick stacks of sales reports, a stack of paid invoices, a customer complaint letter, three trade journals, an office lease, a business license renewal, trademark documents, six supplier catalogs, and two dozen supplier samples. As the day progressed, the CEO received 56 more emails from within the organization and five work-related conversations were held via text message.
The CEO had to squeeze the management of all of these accumulated inputs into a schedule already booked up with back-to-back meetings. These included daily all-staff check-ins, meetings with direct reports, multiple monthly team meetings, presentations from of 10 suppliers per month, a monthly consult with the Board Chair, and one multi-day meeting with the full Board every quarter. Although I would call that a heavy schedule, I’ve met other leaders with many more back-to-back meetings. How do they get it all done? McKinsey & Company describe the squeeze of fitting everything in as two overlapping workdays – the one on the leader’s calendar and the one made up of moments of multitasking “before, after, and in-between.”
Being inundated with an unceasing flow of information, questions, and requests can be exhausting and distracting. It becomes a destructive blind spot when it detracts from the CEO’s ability to do the important work of thinking – reflecting on all the information, digesting it, and discerning relevant trends and implications. The leader can be lured into day after day of putting out fires, responding to inputs that appear urgent but are not truly important. Meanwhile, key opportunities to plan and prepare the organization for the future might be missed.
When the flow of information becomes too great, the inundated leader may resort to taking shortcuts – skimming over emails, giving reports only a cursory glance, failing to respond to requests and return calls, or putting off important decisions. These survival behaviors not only reduce the leader’s effectiveness and credibility, they can also slow progress across the organization by creating a bottleneck.
How to eliminate this blind spot:
The inundated leader’s first task is to take ownership of the problem and the need for a new level of organization. A typical place to begin is to study the use of time in 15-minute increments over a week or more, 24 hours per day. This log will show what was done with the emails, voicemails, reports, and other inputs. It will also give insight into interruptions and unplanned activity. Reflecting on this data, the senior leader can ask self-directed questions about time usage, inputs, systems, and processes.
- Was the activity strategic – something only the executive could do – or could it have been handed off to someone else who could handle it almost as well?
- If the senior leader had to do the task, was the time well-spent, with a goal of getting it done rather than getting it perfect? A colleague of mine often says, “90% out the door is better than 100% in the drawer.” He would rather get something done well enough and “out the door” than to obsess over the project, holding onto it until it’s perfect.
- Can job descriptions be clarified to broaden lines of authority, avoid a command-and-control structure, and share the load with others?
- Considering the influx of reports, which ones are truly needed? Can some of them be dropped, freeing up time for others as well as for the executive? Can routine information be bundled and presented in a dashboard format?
- Looking at the time spent in meetings, does each of them have an agenda to make the most efficient use of time? Are all of the meetings needed? Could the length or frequency of standing meetings be reduced?
- Looking at processes in which the executive is involved, is their input, approval, etc. needed, or would it do to simply notify the leader of the outcome?Are there policies that could be put in place to move processes along without the intervention of the senior leader?
- Considering the items on the time log that were unexpected, is the leader tolerating unnecessary interruptions? Some executives take pride in their “open door” policy, but it comes at a productivity cost. Could a set of established office hours achieve the goal of prioritizing people without derailing the leader’s day? If phone calls have become an interruption, would the choice to allow calls to go to voicemail provide the executive with an opportunity to choose which conversations are strategic?
If we agree with Ford that “failure is only the opportunity more intelligently to begin again,” then CEOs and senior leaders struggling with these three big blindspots have a chance to examine themselves and make an intentional and intelligent shift – from isolated to connected; from insulated to involved; and from inundated to organized. Unlike the high percentage of chief executives that will fail in their role, these senior leaders will be able to deal with their issues and lead with impact. As a result, their organizations will be drivenskillfully toward success through the achievement of key goals.
Ken Gonyer is a Certified Executive Coach and Lead Consulting Partner for Reliance Leadership Strategies (www.reliance-leadership.com), an organization devoted to helping CEOs and other executives to get strategic clarity and implement plans with confidence. Gonyer is a veteran in the financial services industry and a successful former CEO in wholesale/retail. For help with blind spots or other leadership issues, contact Ken at firstname.lastname@example.org.