Knowledge Center: Article
Develop your ripple intelligence12/7/2015
Picture this: Six months into her job, the CEO finds a fleeting moment to savor. In the morning, she announces record company results to stakeholders and a generous profit share to delighted colleagues. In the afternoon, she calls in the HR director and thanks him for a level of executive support and preparation that has made her elevation to the top job an early success.
“Thank you for helping me to prepare for my initiation as CEO of this business and for helping me to make the leap from a CEO-in-waiting to the headline act,” she says.
Sound familiar? If this is the kind of appreciation that happens inside your business, congratulations. You are way ahead of the pack. Unfortunately, our research suggests that when the CEO takes up the hot seat, there is a high level of personal doubt about what the role entails. It can take CEOs some time to get into their stride. In the past, it was a matter of sink or swim; that is no longer a sensible option for succession planning.
Our research, conducted in association with Saïd Business School and presented in The CEO Report: Embracing the Paradoxes of Leadership and the Power of Doubt, has produced a wealth of insight into how CEOs fit into their role. We interviewed more than 150 CEOs, with an average tenure of six and a half years and combined revenues of $1.6 trillion. The candor of this group of people revealed their doubts and surprise at the unique demands of the role. In most cases, it was widely different from their expectations.
And it is here that senior HR leaders can be instrumental in supporting CEOs to ensure business is propelled forward. (Our research showed that business performance dropped back in these early transitional months after a new CEO arrives.)
Lonely at the top
For the HR professional, it’s about understanding the unique position of the CEO in a changing world. While we all appreciate that a good CEO is well remunerated, it’s a lonely role. Today’s CEO sits at the intersection of two complex worlds. The old days of "command and control" leadership appear to be dying, and, now, the tuned-in CEO must keep pace with the expectations of a variety of often conflicting stakeholders, both inside and outside his or her organization.
In our research, CEOs told us they were unprepared for this noise from so many sides. So the chances are your next CEO appointment will feel the same and be underprepared for the task. HR directors should look at their executive succession process and the full development of candidates. There is a chasm between expectation and reality, and it is vital that the succession team understands what a future CEO looks like.
And this is an internal matter too. While the business news headlines always look at the arrival of external CEOs with turnaround management programs in large corporations, in reality the majority of CEOs are groomed from their existing businesses. National stereotypes persist too, with leaders in the United Kingdom coming from a finance background, in Germany from an engineering background, and in France from the civil service école system.
Every CEO’s position is a unique role, like that of a political leader, a prime minister, or a sports team coach. These individuals are never fully formed until they have been through the fire of office. The best way to learn is to be a CEO.
However, our research shows that preparation is vital to enhance a future CEO's abilities, cushion the hard landing into the top seat, and ensure he or she arrives with the right mind-set.
For example, the CEO is suddenly visible to a new range of stakeholders, all with views, all pulling at the CEO's coat sleeve. In his or her previous role, this person might have articulated his or her thoughts inside the safety of the organization. Now all pronouncements are in a public arena.
When we interviewed the CEOs, they talked about the speed of change. Yet it was more than just the pace; it was the need to understand the scope and significance of each challenge.
Just because a matter is pressing does not mean it has maximum significance for the business. The CEO has to learn when to deal with decision making and when to delegate. The CEO is also expected to be more human: some interviewees even talked of the "chief emotional officer," adding, "the best leaders are human first and foremost." To create trust, the CEO must learn how to communicate, listen, make multiple decisions, and manage time.
We call this "ripple intelligence." The analogy we use is visualizing stones thrown into a pond and watching the ripples. The CEO must keep his or her eye on these ripples, using them as an early-warning alarm system. While the CEO still needs to "own the chair," he or she must do so while showing a sensitivity about what’s going on. This is about "collaborative command" rather than old-style "follow the leader over the top of the trenches, no matter what."
HR leaders must operate effectively in this changing environment. It’s fine for the CEO to doubt his or her decision making. Yet decisions must be made. We see CEOs as three-dimensional thinkers who understand that change is the oxygen of growth and creativity.
CEOs will need to keep learning on the job. Talent development and succession planning are critical. And it might mean that the current incumbent starts working with future replacements to develop emotional intelligence, influence, and communication skills. These were once dubbed softer management skills, but now they must be seen as core to sustainable business success.
About the author
Dave Tullett is an alumnus of Heidrick & Struggles' London office.
This article was originally published by Changeboard, and is available here.