Does leadership matter? And if so, how do senior leaders make a difference? The answer to the first question is yes. According to research referenced in an article titled What We Know About Leadership by Robert Hogan and Robert Kaiser, CEO’s account for about 14% of the variance in firm performance.
The answer to the question how do they make a difference is that a CEO influences the effectiveness and culture of his senior leadership team and the senior leadership team influences the performance of the organization. In other words, if your senior team is not performing well, the performance of your organization is at risk.
It is the CEO’s job to recruit, coach and manage the performance of the members of the senior leadership team and to make changes when senior leaders are not performing. In my experience, this is an area where many CEOs (if not most) struggle.
There are at least two reasons for this. First (and this may come as a surprise), many CEOs don’t like conflict and hence shy away from difficult conversations with their direct reports. Just like other leaders, CEOs want to be liked by those closest to them. So they may avoid confronting problem performance.
Second, some CEOs think they shouldn’t really have to coach and manage their direct reports. The assumption is that since they are senior leaders, they don’t want or need to be managed. The CEO should be able to tell them what he wants and then expect his team members to get it done. This may work in times of relative calm, but is a recipe for failure in times of stress and change.
Perhaps the most difficult challenge for CEOs of growing firms is when a senior leader who has been a loyal leader in the start up phase is not up to the challenge of leading the firm to the next level. It is painful and goes against ideals of loyalty when a CEO has to terminate a leader who is a long term colleague but no longer doing the job.
At The Bailey Group, when coaching CEOs much of the time is spent on evaluating the members of one’s senior team and making decisions about what to do when members are not performing, then helping them to act on those decisions. Once that hard work is done, we then move forward to support the CEO in identifying the characteristics of leaders she needs to accomplish her vision. Working together, we strive to build the senior team she needs to maximize her organization’s performance.
Is your firm’s senior leadership underperforming? Call Leigh at 763-545-5997 and start building the senior team you want and need and your organization deserves.