Here I will talk about five reasons why some CEOs have a hard time getting their businesses up and running to the extent they could have. All CEOs start their work in good faith and with great promise. At the time of the job interview, they dazzle the board with qualifications, vision, and competence.
But over time, something happens, and their business suffers. That something could be something external, such as the Covid crisis, a slowdown in the economy or the competitors gaining ground. But often, that something is internal to the CEO’s personality and work habits.
Unless the CEO learns to be either introspective or improvement oriented, this ‘something internal’ could slow down the CEO’s success trajectory, and, by extension, the company’s growth story.
Now, on to the five points:
First, micromanagement. A micromanager CEO wants things perfect the way he wants them. This seems fine in the beginning, but, over time, this makes him spend an enormous time, looking after everything by himself. He does not develop an ability to distinguish between what is essential work and what is not. That inability further makes him unable to delegate most things to others.
When he spends an equal time on trivial things and important things, trying to do them himself or by spending time to direct others to do them, he fails to raise other people’s abilities to do those things by themselves.
Micromanagement has an organizational cost in that it does not get the best of other people through trust and coaching. It basically puts one person in charge, who cannot do everything in 24 hours. To use Warren Buffet’s famous metaphor, micromanagement is like keeping a dog, and then doing all the barking yourself because you do not like how that dog barks.
Second, a frequent change in decisions: Some CEOs are notoriously fickle-minded. During meetings, they would decide one thing, and an hour later, they would discard that decision in favor of something new. The following day or the following week, the decision would be something else altogether. These frequent changes in decisions make things unpredictable. This unpredictability further makes the whole organization dependent on one man’s whims and moods.
When you run your management like this, people do not make decisions themselves. Why? They wait for the decisions to be stabilized. Time is wasted. All the key decisions accumulate at the top, and that further drains the top management’s time and energy.
Third, an inability to learn new management techniques: Some CEOs may read all the latest business books and magazines and consider themselves up to date with new management techniques. But it’s clear that they may read all the new stuff, and that is often that. They do not reflect on the lessons, take notes on how the new management thinking could be applied to their own business. Nor do they look for ways to incorporate the new thinking in the day-to-day work. As a result, they may know about all the new management concepts but are unable to practice them. There is this ‘knowing-doing gap’: a huge gap between what they know and what they actually do.
And the result? As things get more and more complex with multiple layers of decision-making matrices and accountability, they remain under-prepared to handle it all because there is a huge gap between what they know and what the reality demands in terms of actions.
Fourth, they have too much of an ego, which stops him from seeing things as they are. It’s always good to have enormous confidence and a tiny ego. Having a tiny ego allows you to see things from multiple perspectives, without being emotionally invested in your own particular view. You have a sense that you may be wrong and are therefore always looking to disconfirm your beliefs. But ego blinds you to your own shortcomings. Ego shuts down genuine feedback. Ego makes you defensive. Ego stops you from learning new things. Ego convinces you that you alone are right — all the time about all things. Ego makes you too certain and makes you always ‘read between the lines’ about anything, as it were because you doubt others but do not doubt your own self. In a complex, fast-moving world, having too much ego is a recipe for disaster.
Fifth, CEOs do not plan for resiliency. In these times, profits are good, but resilience is much better. What is resilience? Simply put, it’s the ability to bounce back from a setback, even if that setback lasts for a year or more. Board members demand profits so that they can swan in front of the shareholders. CEOs struggle to deliver profits. But the language has to change to focus on corporate resiliency in that: does the company has enough cash to weather financial difficulties? Does the company have enough resources to go through a difficult journey? Has the company stored up enough goodwill if it encounters customer relations disasters? And so on.
Thinking only about profits and driving the company to profits without embedding resilience measures at all levels of the company – from liquidity to employees’ well-being to encouraging experimentation with regard to products, services, and processes – is one sure way to stop the company from evolving with times. What that evolution stops, but the times keep changing, yesterday’s profits no longer pay for tomorrow’s changes.
Most CEOs are well-meaning workaholics. They have gotten to be CEOs by using what worked well in the past. But a CEO’s job is not to be a super-manager. It’s to lead the company to a right and better future. To do that, what worked well before will not work well the next time. That’s because the world has changed, people and their tastes have changed, and the context has changed.
In summation, in these changing times, CEOs who micromanage and do not develop their people; CEOs paralyze their organizations by changing decisions all the time; CEOs who are unable to put new management techniques to practice; CEOs who put protecting their ego over getting improvement-oriented feedback, and CEOs who do not plan for resiliency in all the major workings of the company are operating at a level that is far short of their own and their companies’ human potential. This is something to guard against for all, and for human resource professionals to watch out for in their own professional lives.
Tiwari is Managing Director of Safal Partners, Nepal’s first business operations-focused investment firm.