Chief Executive Officers’ Paradox

Traders Den

The World’s Mysterious Chief Executive Officers’ Paradox: The Strangeness of Having No Formal and Structured Training, Education, Development and Support for a Position That Accounts for 20-50% of the Fate and Destiny of a Business, Company or Organisations.

By Simon Bere

The State of Affairs: CEO’s Are Assuming the Position Without Position Specific Body of Knowledge and Know how to Help Them Excel and Still Expected to Excel.

In his autobiography first published in 2001, the late world’s legendary chief executive officer, Jack Welch devotes a full chapter on the subject of being a chief executive officer. In the chapter he says; “There’s no pat formula to this CEO thing. Everyone does it differently, and there is no right or wrong way to go about it.”

He then goes to goes on to share some ideas on ceoship based on his own experience and his gargantuan success in the role.

In other words, assuming the position of CEO is being taken 33 000 feet into the sky and being release in pitch darkness within an animal infested jungle without a parachute, without breathing apparatus, without a map and without a weapon and expected to survive and thrive.

This also suggests so many things, and some frightening, if we consider just how important the role of chief executive officer is to organisations, economies and the world.

  1. If there is not any formula to the job, on what logical basis then can candidates for the CEO job be recruited and how relevant and accurate are the world’s battery of recruitment and job specifications of the ceo in selection the right candidates for the job?
  2. How can the world stay this long without establishing some kind of formula and role specific education to guide chief executive officers if they have done so for all other positions such as marketing, sales, HR and so on?

Several researches (by established and highly credible research and consulting institutions) on the role and impact of the Chief Executive Officer on organisations, companies, businesses and institutions they leave estimate that this role accounts for between 20% and 50% to the success and failure of the organisations and companies they lead. This shows just how important this role is and an indication of what amount of effort to ensure that this role if filled by the right candidate and also it is well supported to ensure those who assume it perform as well as they can because an under performance has a huge impact on organisations.

Other studies are also indicating a high turnover of chief executive officers, with some putting the high turn-over as high as over 40 percent while the tenure of ceos is reducing with many leaving organisations due to under performance.

Recruitment and Performance Appraisal of CEOs

If Jack Welch is right that there is no pat formula and in the absence of a position specific training, education and development program to prepare aspiring or candidates for the chief executive officer, is what those who are responsible for ceo recruitment use to select suitable candidates accurate enough to avoid selecting out higher potential candidates and recruiting candidates who might find the going tough up there. In other words;

Are the contents and approaches to recruiting chief executive officers accurate enough to produce the best possible outcomes and how can the quality of such approaches be verified in the absence of some kind of evidence-based and science-driven criteria given that, if we take Jack Welch’s view that there is no pat formula and everyone does it his own way?

What is the competence criteria of the people who must be involved in designing the CEOs job description and suitability criteria? How do they make sound decisions on which candidate among the many is suitable when there is no formula to the job?

A world renowned leadership expert, John Adair argues that there is a “big disconnect between what makes a great CEO and what boards think makes a great CEO.” Since things change and improve over time, things might have changed but a perusal of adverts for Chief Executive Officer positions to not show that change. Recent research also shows that many boards still underestimate what time it takes for a first time CEO or a new CEO to get to grips with the demands of the new organisation and to start being productive. One research actually tears down the first 100-Day thing as a hoax and a non-scientific invented by a politician as a promise to the American electorate and not a proven management or leadership principle. In fact research argues that for a big organisation it is impossible to expect serious performance from a CEO within the so called 100 days.

CEO Suitability and the MBA Thing

Many organisations around the world still emphasis the possession of an MBA or similar to be the non-negotiation gateway to the CEO position. This is despite several studies and researches (Read for example, Managers, Not MBAs by Henry Mintzberg and his other presentations and papers) showing no correlation between the MBA and Accounting qualifications with long term CEO performance. They argue that the issue is not to exclude those who have MBA and Finance degree to vie for CEO positions but to remove the mandatory MBA or Finance requirement because it does nothing more than screen out higher potential CEO candidates who might not have MBA or Finance Degree. In more liberal economies, many CEOs without MBA or Finance Degree are proving the point because they are performing as well as those with those qualifications; with many outperforming them. (You can email or +263-77-444-74-38 for more research findings on this subject).

There are also many other research findings proving that many CEOs who have failed had Business Degrees from some of the world’s most famous business schools and universities. Henry Mintzberg in particular is vehement that the MBA is not a passport to CEO success and is therefore an irrelevant criteria for selecting candidates the position. The MBA, no doubt will help but it can only help and is not the defining factor for ceo performance, argue researchers in the field. In any case there are many other people with MBAs in most organisations these days.

Even if, as I suspect, some will vehemently defend the relevance of the MBA thing, other research studies also suggest that due to the forgetting curve, we forget more than 80% of what we learn within two years after graduating. Research among marketing graduates suggests that after two years, there is no marked difference in the on the job performance between those who have a marketing degree and those in marketing but who do not have marketing degree. This is a serious problem in many positions in organisations especially the non-technical and non-STEM positions.

Training, Education and Development of CEOs

Other research also argue that the CEO position and roles are unlike any other position or roles within an organisation and the role needs its own body of knowledge, training, education and development. I agree one hundred percent with this position. The big question is why, for a role of such importance, the world still has not developed a position-specific training, education and development program for ceos and why there is still no program called CEOSHIP in the formal academic institution?

This is why I have introduced CEOLOGY as the scientific study of how ceos produce the performance and results they produce in the ceo role and CEOSHIP as discipline on the ceo role and its practice.

A lot is now known on ceo performance and given the importance of a the CEO there must be a robust support system for ceos and for this we have developed the CEO CADETS which is a program to coach, advise, develop, equip, teach, train and support the CEO Position and role ranging from aspiring CEOs, Candidate CEOs, First Time CEOs, Seasoned Practising CEOs, CEOs facing performance and results difficulties with their businesses or organisations and retired CEOs want to leave a legacy and share their insights and experience so that we continue to build a robust CEOship body of knowledge to improve the support and performance of existing and future ceos.

Frontiers in CEO Performance and CEOSHIP Research

Serious research on the position and role of the CEO is going on, most of it outside university and many important and powerful insights are coming out that will improve CEO performance today and into future. Some of the studies interesting findings include the following;
• Studies of CEO failures, why they happen and how they happen
• The idea of CEO Personality Archetypes matching CEO personality with phases of companies and organisations they excel at. For example the concept that certain type of ceos excel at starting companies or organisations, while others excel at growing while still others excel to maintain a successful company in a steady state while still others excel at turning around struggling companies (turnaround ceos)
• The finding that some ceos are great at strategy but not so good at execution and vice versa
• The idea that the strategic key result areas of all ceos are the same regardless of company, organisation, industry or geography
• The idea of negative personality traits that may hinder CEOs from maintaining their continuous upward rise after reaching a certain level
• The discovery defining difference between poor performing, average and outstanding chief executive officers
• The isolation of key skills sets that drive successful ceoship
• The idea of the 21st Century CEOship which is drastically different from how the ceoship was practiced in pre-21st Century
• The discovery of specific elements of ceoship which are termed dimensions of CEOship
• The discovery of the greatest secret behind phenomenal CEO success and high achievement

Is the Term Chief Executive Officer Still Appropriate for the 21st Century CEO?

The study of the history of organisations indicates that the role of Chief Executive Officer was established at a time when boards where directly responsible for strategy and the board chair and the board members where the strategy architects. The Chief Executive Officer would then be handed over the strategy and action plan to implement with this execution team; the reason he was termed Chief Executive Officer. Executive was derived from the responsibility of executing and not power or status. This theme is explored in detail by the legendary business mind Peter Drucker in his publication: The Effective Executive in which we asserts that there is more than one executive in any organisation and that term executive must not be restricted to those who enter the boardroom.

Given that the role of many boards have shifted from strategy formulation and today’s CEO is now actually supposed to be the strategy architect (Professor Michael Porter also stressed this point), is the term Chief Executive Officer still appropriate for those who assume the position. I advocate the change of the title to Chief Strategy Officer? Does this change matter? Of course it does because it drives how to today’s Chief Executive Officer that his strategy, not execution, is first mandate. This is so important in today’s world where there is a global strategy crisis that needs addressing with the fierce urgency of now.

You may be asking; if this Chief Executive Officer Role is replaced with Chief Strategy Officer, what of the role of the Chief Executive Officer? Well, I do not want to open another big discussion on strategy because the whole concept of strategy has been do brutally mutilated and dis configured and the boundaries of what strategy really is have been seriously tempered with and not without grave consequence. For now, let me just say that the boundary between strategy and execution, when we talk about real strategy, are false. One cannot talk of strategy, real and complete strategy, without talking of execution. A strategy, is not a real strategy until it is executed. We can have a deeper discussion on this fundamental subject of strategy because it needs its own acres of space to do justices so that we as the world, get back to real strategy.

Lets keep the conversations going and please share.

Questions to Ponder on the CEO Role?

  1. Why is there still no CEOSHIP Education Programs in the world’s formal education system?
  2. If all ceos had the same strategic key result areas, what would they be?
  3. Do you think certain degree qualifications have an advantage over others in their contribution to Chief Executive Officer Success
  4. In your context, do you think the term Chief Executive Officer is the correct title for what today’s ceos do?
  5. If you are a CEO, what do you think about ceoship?
  6. If you are a CEO, what do you know about yourself in relation to being a CEO?
  7. If you are a CEO do you think or feel that you have reach the personal peak performance level in your role as Chief Executive Officer?
  8. If you are a CEO are you clear of your unique CEO strengths? How do you define strengths?
  9. If you are a CEO imagine you were a captain of a spaceship. What would be on your CEO dashboard?
  10. If you are a CEO do you think studying the new discipline of CEOLOGY, the scientific study of how CEOs produce the kind of performance and results they produce in their CEO role will add value to your performance?
  11. If you are already a CEO, do you already have a system of support that includes all or any of the following?

a. CEO Personal Performance Coach
b. A CEO Personal Strategist who help you hands on in your strategy work at personal, life, position and organisational role
c. CEO Personal Strategy Advisor to call on from time to time to bounce your ideas and problems on?
d. CEO Personal Coaches in specific areas that contribute to your CEO role and performance?
e. Personal CEO Mentor in key areas of your responsibilities
f. CEO Personal Trainer in Your Core CEO Skills

  1. What are the competences, if any, of an elite performing Chief Executive Officer?
  2. If you are an aspiring, candidate or first time CEO, do you have a powerful and accurate CEO Personal Development Program for the continuous improvement of your CEO Game.

Contact Simon

Telephone: 263-77-444-74-38
LinkedIn: Simon Bere

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