The CEO Next Door
The 4 behaviors that transform ordinary people into world-class leaders.
This book is a playbook of tried-and-true and repeatable practices that anyone can benefit from to accelerate the journey to the top of one's aspirations. These practices are not inborn traits. There are four of them:
Decisiveness
Engaging for Impact
Relentless Reliability, and
Adapting Boldly
CEO leadership requires outstanding capabilities - but the capability isn't enough. To become a CEO, an individual must be able to see and believe in that possibility. Becoming a CEO isn't necessarily about the background and good fortune. It's about performance, about behaviors that most of us can master with hard work, close attention, and useful techniques.
My key takeaways:
Section I. Get Strong. Master the Four CEO Genome Behaviors
Decide: Speed over Precision
Successful CEOs stood out for decisiveness itself - the ability to make decisions with speed and conviction. Decisive CEOs are much likely to be high performers.
A potential bad decision is better than no decision, especially when decisions can be modified or reversed.
Success relies on action more than pure intellect.
To develop decisiveness, we can focus on three things:
Make decisions faster: make the complex simple, use mental models; involve others by giving a voice, not a vote: you need input, but do not need to wait for consensus.
Make fewer decisions: become adept at triage; do not step in when the decision rights reside with others in the organization who have the information and experience to make a decision. Your job is to decide on the what and to empower others to decide the how.
Put in place practices to get better at decision-making every time: there is a cost to perfectionism. Move forward and continuously improve. Look back, learn from your past decisions. Assume responsibility for the mistakes and see them not as a failure, but as learning. Look inward: make sure your physical and mental state is conducive to decisiveness. Look forward: Use the 10/10/10 technique - imagine how you will feel about a decision in 10 minutes, 10 months, and 10 years. Look around: Rely on MOPs (Multiple Outsider Perspectives)
Engage for Impact: Orchestrate Stakeholders to Drive Results
Despite their power and authority, CEOs are almost entirely dependent on the actions of others for their success. Interdependence - not independence - wins the game.
Successful CEOs engage with others for impact rather than affinity.
Lead with intent: clearly articulate the intent to yourself, consistently align your daily actions with your intent, act on your intent in each interaction based on a deep understanding of the audience and context - ask yourself, what do you want each person you meet to think, feel, and do as the result of stepping out of the meeting with you?
Understand the players: focus on who your stakeholders are and what they want - perspective getting. Mentoring others is a powerful laboratory in perspective getting.
Build your relationships through routines: Communicate repeatedly: any message has to be repeated seven times in seven different ways before any organization has any hope of hearing it. Break the "sound barrier" around your office. Marry corporate, date the field: build broad and consistent outreach.
Relentless Reliability: Deliver Consistently
Reliability is the killer behavior behind both hiring and performance success. Reliable leaders create the assumption among their customers, board members, and staff that they will get things done.
A hallmark of reliability is following through on commitments.
The pillars of reliability are personal consistency, setting realistic expectations, practicing radical personal accountability, and embedding consistency into the organization.
The Habits of Highly Reliable Leaders: they are on time, they make individual commitments clear in meetings, they follow up on agreed actions religiously, they make lists and put those lists into action, they are aware of their state in their interactions with their teams, they keep people who need to know in the loop.
To become a successful manager and leader, you need to be able to transition from being focused on individual achievement to collective achievement.
Adopt the habits of highly reliable organizations: make mistakes safe, level the playing field, create a precise shared vocabulary, build the machinery of consistent process. Consistency becomes momentum.
Adapt Boldly: Ride the Discomfort of the Unknown
Most of the issues that are known should be addressed by those below the CEO level, freeing the CEO to focus on navigating the unknown. Train your adaptation muscles: pick up a new skill or hobby; immerse yourself in an uncomfortable experience; take a job or volunteering assignment in a completely new area.
The CEOs who are best at adapting themselves and their organizations have learned to welcome discomfort, conflict, and change. They take the attitude, If I am not uncomfortable, then I am probably not learning or changing fast enough.
Let go of the past: actively seek out novelty, weigh jobs as much by their learning potential as by their pay grade; acquire skills you don’t have; be willing to let go of approaches that have worked before. Conduct annual "spring cleaning": ask yourself and your team which habits, practices, and assumptions hold you back today or in the future. Great leaders, whatever their titles, are constantly becoming - becoming better, different, more informed.
Build the antennas for the future. The time leaders spend thinking beyond the next year into the future doubles when they become CEOs. Build diverse information networks (assemble your "Inspiration Board"); Schedule "Foresight" time at least twice a month - block time in your calendar for big picture view; Use the power of questions; tackle "premortems" before postmortems, beware of cognitive overload, look into the crystal ball of customer experience.
You do not have to be a superwoman or superman to be a successful CEO or to grow to your potential. And it's never too early or too late to strengthen your muscles on any of the four key behaviors.
Section II. Get to the Top: Win Your Dream Job
What are the career choices and experiences that got some CEOs to the top faster?
Career Catapults: Fast-Track Your Future
Your career trajectory is the output of two factors that have a multiplying effect: getting results in the right roles and getting noticed for those results.
CEO's careers are roughly divided into three stages:
Stage 1 (years 0 to 8) - Go Broad: maximize the breadth and pace of your learning, ideally in direct contact with role models for high professional standards. This is also a time to build valuable foundational skills that will be harder to master later, particularly problem-solving, financial analysis, and oral and written communication skills.
Stage 2 (years 9 to 16) - Go Deep: this stage is about measurable results above all. It's about developing leadership ability, depth of industry experience, and a track record of results. Future CEOs are demonstrating that they can lead others to demonstrate measurable results.
Stage 3 (years 17 to 24) - Go High: this stage is about differentiating yourself as an enterprise leader.
Don’t look at your career as a succession of jobs to land; instead, look at your decisions as a portfolio of experiences to build: industry experience, P&L leadership, strong people leadership, proven success in a relevant context, breadth of experience across different types of business problems and roles, strategic vision and ability to set direction and champion change, operational and financial acumen, ability to work with the board and external stakeholders, international experience.
Career catapults are inflection points that accelerated strong performers to top-level leadership, both in terms of their capabilities and in terms of how others saw their potential.
Career catapult #1: the Big Leap. It’s about proactively seeking out opportunities to take on a new large challenge before you feel fully prepared or ready. DIY Big Leaps: seek out cross-functional projects; get involved in the integration of a merger; top-priority business initiative; additional responsibilities; proactive problem-solving; seeking out broader & more senior relationships in customer organizations.
Career catapult #2: the Big Mess. It's about fixing an underperforming or broken business. One tactic: take the job no one wants.
Career catapult #3: Go Small to Go Big. Taking a smaller role or starting something new.
Career catapults can be risky. How does one know which risks to take and how to handle blowups so that they become "learning experiences"? Having different kinds of blowups does not disqualify you as a potential CEO. Having the same blow-up over and over does. How you handle blowups is critical to your success in any leadership role. Consider them as an opportunity to learn and fully own them.
Techniques to catapult without crash landing: align supporters, align senior management on the risk involved, ensure you have the resources you need, stay connected.
Stand Out: How to Become Known
Get great things done, and get noticed for them.
Build relationships to deliver results for the good of the company, not your own self-interest.
Create visibility with the right people in the right way.
Pick your boss: understand your boss's goals. Don’t guess her expectations and preferences, Ask. Let your boss help you. Master the regular update on the things that matter.
Build your tribe: have powerful sponsors. Rather than passively acting for your luck, you can proactively create your sponsors: share your aspirations, not problems; ask advice on the topics relevant to sponsor; make clear, specific requests that are easy for your sponsor to fulfill; give your genuine gratitude; follow through.
Build a bonfire: a critical mass of relationships. A great way is to take on a staff role with a senior person several levels above you; volunteering for important cross-functional projects. You have much more oxygen to feed the flame when you're working at an intersection where you can add the most value and contribute what the organization values most. You need to make contributions that move the needle for the company.
Ask for what you want - but you have to have earned this right to ask by delivering a strong performance. Don't bring problems, bring solutions.
Rock the boat. Conflict, often perceived as a negative, can, when done for the right reasons in the right way, strengthen the relationships and create powerful reputational tailwinds that establish you as a leader with conviction and power.
Kissing up and kicking down is not a long-term strategy.
Look and speak as if you belong at the executive table. Speak a little louder. Speak more slowly. Master the deliberate pause. Make every word count. Know your opening and closing sentences before you enter the room. Constantly scan for cues that your message is gaining traction. Borrow from Frank Sinatra - do it your way.
Close the Deal
To ace, an interview, ask not what the interviewer can do for you but what you can do for the interviewer.
More than anything, hiring decision-makers want to make a safe choice.
You get fired on results but hired on perception.
Become a happy Warrior. Likeability and confidence impart no advantage to performance, but they definitely help you land the job.
The people who ultimately get picked are those who lead with fierce competence delivered with genuine warmth.
Safety of language. You can't win a CEO job in a single meeting, but you can surely lose it. A foreign accent reduces the chances of getting hired. Overly sophisticated language is a handicap too. Down-to-earth storytelling, drawing on memorable results, is vastly more powerful than a cerebral, academic style. Consulting-ese and relying on empty buzzwords can be interview killers. We/I balance: the best candidates are clear about their individual contributions without overusing "I".
Memorable and relevant. Relevant provides safety. Memorable keeps you at the top of the interviewer's mind. Use meaningful numbers. Have bona fides and vivid stories. Address your blowups productively: paint a clear picture of what you learned from those mistakes to ensure they would not be repeated the next time out.
The first and the final minutes of the interview - how you meet and how you part - are most likely to be remembered.
Set the agenda: Here's who I am. Here are the opportunities for your company today. Here's what I'm going to do about it. You have to enter the room knowing what you want them to take away from the conversation, what do you want them to know and remember about you.
Don't take the job if your gut tells you no if you don't have credible validation that the business can be fixed if you don't have a clear sense of why your predecessor left if you don't have the decision right to hire and fire if you don't get along with an important board member if you don't have complete visibility into the financial picture if you see yourself change significantly who you are to succeed.
The Four Archetypes: Are you a Match for the Role? The number one success factor for a new CEO or a leader at any level is simply picking the right opportunity. Don't accept just any CEO role. Accept the right role for your skills, strengths, and values.
The Sky's the Limit: relentlessly creative and entrepreneurial, well suited for rapidly changing industries and initiating bold breakthrough opportunities for small high-growth companies.
The Lean, Mean, Operational Machine: a paragon of efficiency, reengineering processes and cutting costs. Best put to use in companies where cost is a key source of competitive advantage.
The ER Surgeon: a quintessential turnaround CEO. An adrenaline junkie who doesn't hesitate to make tough calls; often a skilled negotiator.
The Safe Pair of Hands: deliberate and relies on both culture and process to protect valued institutions. Typically found in slow-growth industries.
Context is everything.
Writing down what you want is key.
As a leader, you will find much that you can't control. The job you choose is one thing that you can control entirely. The opportunity matters more than the title - so slow down and pick the right conditions for your success.
Section III. Get Results. Navigate the Challenges of the Role
The Five Hidden Hazards at the Top
A typical CEO takes roughly two years to feel comfortable in the role.
The biggest question on every new CEO's mind and on the minds of anyone in a new role: What is it that I don't know that can kill me?
Learn from the mistakes of others, or you may not be on the job long enough to make them all yourself.
Hazard #1: the Ghouls in the Supply Closet. The common ones: a critical gap between the board's expectations and the reality inside the business; a hidden financial or operational bomb; a sacred cow or cultural blind spot; signs coming from a level or two down that one of your critical people isn't up to his or her job.
Anything you bring to light in the first six months in the role will be viewed as part of what you walked into, setting the baseline. After that, it's your problem.
Your first step as you pause in the new job: Hear your major stakeholders out. Go even further: Walk the floors, visit the field offices, ask people what they think.
Year One Checklist: assess the shape of the business, get skeletons out of the closet. Set vision and strategy. Set the baseline and new expectations with the board. Score a couple of early wins. Assess and upgrade the team (if needed).
Hazard #2: Entering Warp Speed. You are going to have to take on the most challenging job of your life - running an enterprise - in significantly less time than you devoted to running the business in previous positions. CEOs spend over 40% of their attention focused more than a year into the future. This practice creates a filter for all the incoming demands on their time: One or two years from now, is this going to matter? You also need to train others around you on how to work with you.
Actively manage your calendar. Adapt the meeting time to the complexity and level of priority of the issue. Make a disciplined habit of getting in, getting to the point, and getting out of meetings and conversations. Look at your calendar and ask yourself: how well does your time allocation represent your business and life priorities? Your relationship priorities? How much time are you spending on short- versus long-term? Internally vs Externally? Say no to the opportunities that are not aligned with your priorities.
Hazard #3: Get used to life in the permanent spotlight. The way people relate to you as the boss - even people who were just yesterday your peers - is completely and utterly different. Understand this, adapt your leadership style accordingly, and amplification becomes one of the most potent tools in your new kit. Every move matters. Every gesture is profound.
Hazard #4. Use all the levers of the CEO role. 1/5 of the CEOs were fired because they didn't use the full set of business levers available to them: (1) culture-shaping: whether you intend to focus on your company culture or not, much like air, it will have an ever-present impact on your results. You'll want to be intentional about it: consistently articulate and model the behaviors you seek, watch where you put your time and attention; whom you hire, fire and promote. (2) Financial Strategy: if finance isn't your strength, you've got to find someone who can help you learn. (3) Corporate Diplomacy: your historical sources of power aren’t necessarily going to apply. Knowledge and insight have to be broad; information power comes in interpreting big picture patterns from outside the company and their implications on the business; networks become more external; the loyalty of your team becomes extremely important; positional authority is there, but you should use it sparingly.
Hazard #5: the C-suite is a Psychological Thunder Dome. The one thing utterly within your control is showing up to this high-stakes obstacle course in your absolute best condition to perform and win. Create Winning routines. Protect against "identity theft" - do not limit your identity to your job only, nurture aspects that are unrelated to your CEO job or status. Find confidants and consiglieri - it’s never too early to build a network of advisors outside of your business.
Not Just Any team - Your Team
Challenges building the team are the single most common setbacks for new CEOs.
The first question every new leader should ask when it comes to talent is this: "How can I move this from being THE team to being MY team as quickly as possible?”
The inaugural address matters. The best way to figure out WHO is to start by telling your team WHAT. How you enter the CEO role has enormous power to set the right momentum and tone for your tenure. Include your assessment of today. Your vision for tomorrow. Your values for the organization. Your broader view. Your call to action. Your leadership style.
New leaders feel vulnerable. And vulnerability can lead to inertia and poor judgment at the very moment when bold, decisive moves are critical. Avoid falling into traps of "safe" bets: maintaining the status quo, favoring pedigree over relevant track record, acquiescing to the board, over-relaying on people who helped you get the top job, hiring people who are clones of themselves, avoiding talent who can become competition.
Draft the right team quickly. Develop your people plan in writing. Assess your team looking forward through the windshield, not backward through the rearview mirror. Set a higher bar for what "great" looks in each role. Start discussions from zero base: rather than assuming that you have to live with what you have, imagine you had to redraft your entire team for the sole purpose of winning against company's vision and goals.
Minimize personnel "projects". They are costly.
Use small gestures to connect with your team.
Build your new language. 90% of the CEO leadership is behavior modification. The most important decision you'll make is when to be a cheerleader, inspiring and engaging others, and when to wield a hammer of accountability. The language of leadership has to do with actions, not words; signals, not demands. Success is no longer your success. It's your team's.
Dancing with the Titans - the Board
Just running the business is only part of the work. How well you work with your board of directors can make all the difference between success and failure.
Failure to manage the board is among the top three most commonly cited mistakes made by new CEOs.
On average, successful CEOs spend between 10 and 20 percent of their time working with their board.
4 ways to fail to partner with the board: (1) Super Operator: "my job is to run the business. As long as the results are good, the board will take care of itself". (2) The Heisman: "I've got this., keeping the board at arm's length, especially when the things are not going well. (3) the Polyanna: "Great, great, great, no problem", avoiding the tough, uncomfortable discussions; tending to overpromise and underdeliver. (4) the Oversharer: "By the way" - overly needy for board approval, running to the board with every mundane issue.
Who is really in charge? You need to figure out what are the power dynamics of the board.
The CEO may not have the formal authority to lead the board, but he has the responsibility to put the company on a path to success, even if this means taking risks with the board.
Common archetypes among the board members: (1) the Engaged Partner. Lean on them oy help push your thinking and help you be the best CEO you can be. (2) the Quiet Expert - won't weigh in on board debates unless you specifically ask her. Has more competence than influence. Create structured opportunities for her to add value. (3) the Rubber Stamper. Follows the lead of the most powerful. The primary goal is to establish an agreeable reputation the gets him hired to other boards. Understand whom they hold in high regard. (4) the Micromanager - eager to prove his value and superiority. Can undermine the CEO and be disruptive to board dynamics. Give feedback, arrange for coaching form the chairperson. If all else fails, work to remove him from the board. (5) the CEO in waiting: approach them with a. open mind, understand their contribution and power. If they bring value, find the way to work with them. If they are disruptive, work with the chairperson to move them out. (6) the Activist. Don't try to win them over with relationship skills, their primary allegiance is to the hedge fund. Understand the agenda they represent and look for the common ground.
The best questions no one asks their board members: What excites you the most about being on this board? How did you get connected with this board? Whom on the board do you talk the most often? Where have you focused your time and efforts in the past? Where and how would you like to engage in the future? What does success look like, for the company and for the CEO, in one year? In three years?
Initial investment into the understanding board members plant very important seeds for a strong partnership. To bear fruits, these seeds must me continuously watered and fertilized through deliberate ongoing engagement and communication. Align on what success look like. Align on the rules of engagement early. Assign homework. Partner with your chairperson or lead director. Bring in fresh talent. Call out unproductive behavior. Take a shareholder's perspective.
Delivering bad news. Communicate early and often. Own the issues, and focus on solutions. Don't be defensive. Apologize if an apology is warranted. Discuss forward-looking early-warning operating metrics. Come with a plan. Don't avoid an occasional "I Don't Know".
From Ordinary to Extraordinary
Many CEOs regarded as extraordinary today had very ordinary beginnings.
Great CEOS are high-purpose, high-performance leaders. They create value for the shareholders as an outcome of two distinguishing actions: they lead with clarity of purpose, and they create a culture grounded in strong values. They get up in the morning to achieve better outcomes for others.
You, too, are a CEO. At least, you could be.