Companies Break in the Middle

Companies Break in the Middle

After spending over 1,000 hours per year with CEO’s I have an observation, companies break in the middle.

Hold a stick with both hands at each end. Your right hand is the CEO, your left hand is the front-line employee. Everything in between is the middle. Now bend the stick…until it breaks.

The break will happen somewhere in the middle. No matter the strength of the branch, it will break with the right amount of pressure. This is why it is so important to pay attention to the middle.

Who Needs an Executive Coach?

Executive coaching is hot. What was stigma (“You’re so broken you need a coach?”) has become status symbol (“You’re so valuable you get a coach?”). Tiger Woods and Michael Phelps have coaches. Even President Barack Obama has a coach, if you count David Axelrod. Microsoft ‘s young high-potential leaders get coaches. If elite athletes and organizations think they need coaches, shouldn’t you have one too? Shouldn’t we all?

No. Executive coaching–personal training in leadership from someone who provides it for a living–should be used like a powerful prescription drug that works best under certain conditions. When employed as a cure-all, it is less effective, too expensive and has negative side effects.

Executive coaching is not aspirin. It’s interferon. So when should it be prescribed for an executive? When should it be avoided?

Based on the latest research and 25 years I’ve spent coaching senior executives and high-potential young leaders, here are five diagnostic questions you should ask before making the decision to hire a coach.

1. How valuable is this person’s performance and potential to your organization?

When done right, executive coaching is expensive and time-consuming. It should be reserved for people who are critical to your organization’s success, or will be in the future. In general, this includes everyone at C-level, heads of major business units or functions, technical or functional wizards, and your bench of high-potential young leaders.

Just how expensive and time-consuming is executive coaching? Although there is tremendous variation in fees and arrangements among coaches, be prepared to pay a C-level coach what you pay your top attorney. If this seems excessive, consider that a coach must have the experience and expertise to quickly grasp a leader’s situation, challenge assumptions and choices, and bring credible, fresh ideas to the table. Doing this with your best and brightest is not easy. And given the influence a coach can have on an executive’s decisions and actions over the course of a typical six-to-12-month engagement involving bimonthly meetings, regular phone calls and e-mail check-ins, a bargain coach whose sophistication does not match the client’s is a big mistake.

2. What is the challenge the person is facing right now?

People, relationships, organizations and behavioral change are what executive coaches know best. When an executive is struggling to learn how to best manage herself and engage others, you’ve found the sweet spot for executive coaching.

He might be a chief executive officer trying to figure out how to work with his board chair. Or a regional vice president scaling up to global responsibility, learning how to lead her former peers. Or a technical wizard who destroys teams with his resistance to all ideas but his own.

But be warned: An executive coach is not a consultant. He may have technical or functional expertise. But he should not be used as an answer person, an extra pair of hands or a bolster for a weak leader. He helps executives think through and tackle their own problems. Self-reliance, not dependency, is the goal.

3. How willing and able will the executive be to work with a coach?

The client has got to want to change. A bright, motivated coaching client can step up to most challenges. A bright, unmotivated one will waste everyone’s time and money. Working with an executive who has been pressured into coaching by his boss or human resources department is an uphill battle, though it’s not impossible.

Coachability is important. Look for a track record of unusual growth under the guidance of teachers and mentors. Coachable executives readily share their experience. They are realistic about their strengths and weaknesses. They learn from others but do it their own way, taking responsibility for whatever happens. They know how to leverage a coach.

4. What alternatives to coaching are available?

There are many ways to help executives grow as leaders. High-level training, mentoring, reading, job rotation and special assignments are just a few. The most overlooked alternative is attention from the individual’s own manager. As coaching has become more fashionable, I’ve seen too many managers abdicate their own coaching responsibilities, turning a struggling executive over to a professional. Sometimes the problem is beyond what the manager can handle. But often managers hand off executives because they’d rather not deal with messy people stuff.

The manager is already being paid to coach. Don’t incur an executive coaching expense if the problem is within that manager’s capabilities.

5. Are key people in the organization ready to support this person’s efforts to grow and change?

Changing the way you think and act is tough even when you have support from others. But when key leaders above or beside you are indifferent, skeptical or hostile to changes you’re trying to make, things get exponentially more difficult. Coaching works best when key people in the executive’s world stand solidly behind her. They need to provide tailwinds, not headwinds. Coaching relationships in a vacuum of support fall apart before any goals are achieved.

When conditions are right, executive coaching can be one of the best people investments you’ll ever make. But it is not a panacea for every executive development problem. Answer these five questions, and you’ll make better decisions about who is likely to benefit from coaching. And who isn’t.

Douglas McKenna is chief executive officer and co-founder of the Oceanside Institute. Formerly head of leadership development at Microsoft, he coaches senior executives around the world.

New Leaders Should Act Fast

A McKinsey study shows that new CEOs should let their vision set in quickly in order to see the best return.  

Whenever a company brings on a new CEO, the big question always concern what kinds of changes are forthcoming, and how quickly. The findings of a newly-published McKinsey study suggest that the answer to the second part of the question should be, "As soon as possible."

The study was based on 20 years of data from 1,500 public U.S. companies, and it sought to determine the effects of how newly-onboarded CEOs reallocate corporate resources.

The faster a new leader moves in this regard, the study found, the greater the return for shareholders--and the longer the CEO's tenure.

Companies saw both the best returns to the shareholders and longer 

Three quarters of CEOs who moved quickly in changing how resources were deployed lasted more than six years in the position, compared to 65 percent of "slow" CEOs. Shareholders saw more than a 2 percent return from "fast" leaders compared to their slow counterparts.

The study also found that CEOs brought from the outside of a company find it easier to shift gears while those promoted internally to the executive chair struggle to make the change. And the data show that executives who make changes in their top management teams early on also see a stronger return in the long run.

The study suggests that that new leaders should take the reins and give their vision prudence. Stephen Hill and Conor Kehoe, the report's authors, suggest four keys to making it happen.

1. Explain the reallocation strategy clearly. 
Be upfront with stakeholders, the authors instruct, that reallocation may lead to short-term hits, but let them know the long-term benefits.

2. Be bold.
The study turned up no indications that reallocating too much would ultimately wind up hurting shareholders.

3. "Own" the careers of senior corporate talent.
"CEOs must ensure that they are free to deploy good people to manage new or expanded activities across the corporate portfolio," Hill and Kehoe write.

4. Enlist board support.
A new leader is probably going to have the backing of the board. As such, the CEO should ask their help in implementing his or her vision. 

by Adam Vaccaro

Why Great CEOs Roll With The Punches


By Tom Bell 

Every day we see or read about superb acts of leadership. The ones that occupy an indelible place in our minds are often characterized by unexpected high-pressure, traumatic conditions and courageous acts taken within a very limited amount of time—a cabbie delivering a baby, a mayor calming a city after one of the worst terrorist attacks in the history of mankind, a pilot making the call to land a powerless 65 ton piece of steel on a river in the middle of a major metropolis or a primary school teacher protecting her class from a gun-wielding madman.

With the exception of tampered product recalls, oil spills or factory explosions, these types of trials never face the captains of industry. Am I implying that leading a business enterprise is easy? Not in the least. But in the context of taking charge and leading human beings during major or minor crises, every chief executive is blessed with the luxuries of time, subordinate counsel, years of related experience and knowhow imparted by pundits in thousands of books, journals and case studies.

So, why do 21st century CEOs continue to struggle in their roles as leaders of a business enterprise? Consider this: Only two years ago the average tenure of a CEO in America was 8.4 years, down from 10.0 years in 2000. According to The Conference Board reportdismissals were on the rise because of increased accountability of directors and a greater scrutiny from shareholders and activists.

The Conference Board suggests that the pressure of serving as the CEO of a large company in an increasingly competitive global marketplace has resulted in voluntarily shorter tenures, implying that CEOs are leaving on their own terms after fewer years on the job. This is a case of “jump” before you are “pushed.”

Is the tenure problem leadership itself, impatient shareholders, uncontrollable external factors or a combination of all three? Blaming shareholders is a cop-out. The moment shareholders lose confidence in their chief executive, he or she is toast.

A critical role of an organization’s leader is to generate and communicate business progress to all stakeholders. Sometimes that headway doesn’t show up on the profit line of the income statement. Progress may be represented by top-line sales, market share, productivity, innovation, new product launches or expanding distribution. These factors can be the determinants of the organization’s strategic well-being.

Strategic health ultimately results in profit. But profit can also be the worse indicator of a company’s strategic health. Look at any business with increasing profits and declining or stagnating sales; below the shining profit façade is a deep-rooted problem.

In judging CEO performance, there is no place for the uncontrollable factor. Chief executives are paid handsomely to deal with sick economies and currency fluctuations. CEOs aren’t expected to change the world, but they sure as hell can affect how their companies deal with negatives that ostensibly are beyond their control.

Over my 17-year career in the North American coffee business, I must have dealt with three or four Brazilian frosts that pushed the price of coffee futures through the roof. Most of the lessons learned were from the errors the executive team made in the first frost that almost put us out of business. After that calamity, we altered our course to make the best of a difficult situation and always came out of the frost in much better shape than our competition. You do not throw your hands in the air and tell the shareholders to wait for prices to stabilize.

Back to my question—who is to blame for lackluster CEO performance? Though I have no statistical evidence to support my theory, I place most of the blame on leadership itself. Great leadership begins in the interview process. Those keen to secure the job and the big paycheck over-sell and over-promise.

Astute leaders establish the right expectations and continue to manage those expectations in the battlefield. These CEOs deal with uncontrollable issues as the norm, and they have a better shot at a longer tenure—if they want it.

In the late 19th century, someone said, “When the going gets tough, the tough get going.” Today’s successful CEOs have little choice but to walk that talk.

7 Beliefs of a Leader Who Will Never Be CEO


shh (Photo credit: Inubleachanimefan)

In order to build a successful company, varying personality types must all be represented. This array of characters is more important than determining someone’s title: instead of trying to check the box for CTO, CMO and VP of Engineering, you should focus on hiring rockstars, all different from one another. These leaders bring their range of expertise to the group, none more important than the next. That being said, common thinking patterns need to be tossed out the window, right from the start, in order to be the chief executive of a company. Many strong leaders are priceless assets to teams but aren’t CEO material if they hold any of the following commonly-held beliefs.

It’s real when you see it. To build a company, CEOs have to be visionary and forward-thinking. No different than an architect and builder can “see” a house before the foundation has been dug, a CEO sees the results only when he first believes in them. Whether this is an invigorated team, a world-changing product, or the acquisition of a competitor, a CEO rests at the helm, perpetually steering the ship forward toward the goals set out in advance.


If it’s not broken, don’t fix it. In the age of creativity, our world moves at mind-boggling speeds. To keep up with the crowd, let alone stay ahead of the curve, companies must constantly innovate. Stagnation is the surefire path to mediocrity. If a fix does not come until after something is broken, it’s far too late.  It’s the things that work just fine that need the fixing.  “Fix the stuff that works fine” is the modus operandi of a true innovator.

Failure is not an option. Failing (fast) must be encouraged in a company of five or a company of 50,000. Employees need to feel comfortable speaking up and sharing ideas with their teams and broader peer group, which is only cultivated through a well-developed culture of openness. Ultimately, failing isn’t a nail in a coffin, but rather in a window into something otherwise unclear. Michael Jordan explains it succinctly, noting, “I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” It’s not that failure is not an option, but rather that failure is the only option.

Risk is something that should be managed. Big risks lead to big rewards. The world’s most successful people – and their companies – are those who take outlandish risks, often cast off as crazy by others, until they’ve won, changed the game, and proved their naysayers wrong.  “Here’s to the crazy ones…”

Figure out the best way to do something and stick with it. If you’ve always done something a certain way, it’s probably wrong. Traditions are great at home with your family, but in the business world, they can lead to disaster. At ePrize, a digital promotions company I founded in 1999, we told the meatloaf story: a young girl asks her mom why she always cut off the end of her meatloaf before putting it in the pan. Without a good answer to her daughter’s question, the woman calls her own mom, who also has no explanation beyond “it’s just how I’ve always done it, because that’s how my mom did it.” Grandma calls great-grandma, who laughs hysterically at the question. Her response was a slap in the face: “I don’t know why you’re all cutting off the end of your loaves – I didn’t have a big enough pan!”

Your best ideas must be protected. The best ideas are never stolen, because they must be shoved down people’s throats. At first these plans will be ridiculed, then fought, and finally, accepted, but only once a critical mass has developed. Nobody wants to be the first one to the party. For customers you already have, remember that their feedback is a gift – use it to improve upon whatever you’re doing, because the truth is, there’s always room to improve.

Common sense is king. The best CEOs balk at the herd. If there’s a trend doing something in “zig” fashion, visionary executives will jump at the chance to “zag,” racing in the opposite direction. Even if it seems incremental (as opposed to disruptive or revolutionary), the status quo provides any company with the opportunity to do it better by doing it differently.

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