Effective Enterprise Leadership: Counsel for enterprise leaders from enterprise leaders — CHAPTER 3
Know your role
Most contributing executives began their comments in this area of action. Some referred to it throughout the discussion to illustrate its importance. A few revealed that the mistakes they had made in their role as leaders often began with an incomplete or misinterpreted view of their stakeholders’ expectations.
It is one thing to understand the role of the top executive. It is another to understand the role of the top executive in this enterprise, at this time, looking ahead toward the opportunities and hurdles that lie ahead of it.
“Age and experience are the best teachers, no matter what anyone says. People can talk to you about the role, but they can’t teach it to you. You have to learn it yourself.”
Contributors gave similar answers when asked how they found the path to success in their role. In addition to their own experiences (the most frequent answer), they credited mentorship from those who had similar roles. Their message was clear: you begin by learning from the experiences of others and, in the end, you learn from experiences of your own. Those who have gone before may be helpful in predicting where problems may lurk or where opportunities might be found; however, your problems and opportunities will not be the same as theirs. To unearth the roots of the task ahead, enterprise leaders must dig them up for themselves.
Knowing the role comes from actions taken along three lines of inquiry. Successful leaders:
- know the position in terms of the scope of responsibilities specific to the enterprise and industry;
- know the mandate from their Board, shareholders, customers, employees, and other stakeholders; and
- know themselves, including why they were chosen for the role and how their skills and principles will be tested.
Insights from Enterprise Leaders
Effective enterprise leadership begins with neither subject matter expertise nor strategic insight but with an understanding of the nature, demands, and personal challenges inherent to the role.
Know your role
Effective enterprise leadership begins with neither subject matter expertise nor strategic insight but with an understanding of the nature, demands, and personal challenges inherent to the role.
In an uncomfortable meeting between client and consultant, the CEO of a mid-sized business reviewed the young advisor’s recommendations on where and how the executive should engage. “I think every one of these suggestions is spot-on,” he said, “and I would follow them if I could somehow be in three places at one time, every day.”
A leader’s role demands accountability for anything and everything that transpires within the enterprise and the outcomes it delivers to all stakeholders — far more responsibility than any one person can possibly manage. Survival requires judicious and effective delegation: one must entrust and empower others. Effective leaders understand that the decisions regarding how to deliver results, sustainably and ethically, is the single responsibility they cannot delegate.
Peer counsel
“The CEO is three things: 1) keeper of the vision; 2) keeper of the culture; and, 3) taskmaster for execution of the plan.”
“Leadership of large enterprises is more about temperament than personal intelligence or knowledge.”
“You can’t become completely absorbed in the initiatives to transform the business… your job is more than that.”
“It’s a lesson for those moving up — when you get high enough, your responsibilities become comprehensive, not more high-level.”
“At the end of it all, the CEO is the person who makes commitments to the stakeholders and ensures that they are delivered.”
Know your role — know the position
“Until you have the job, you don’t get it.” Many contributors shared a version of this sentiment. Whether leading the enterprise or a business within a corporation, the responsibility of integrating all the elements in the service of all the stakeholders requires a different mindset and skillset than any other role in the organization.
The enterprise leader is the final accountability for the actions of everyone within the enterprise and the outcomes they produce. By contrast, corporate executives and entrepreneurs often reach the role of enterprise leader through selective focus and actions. Contributors reflected on the unique challenges of being the ultimate integrator for the enterprise — the obligation to get all the parts of the operating model to work in concert to produce intended outcomes for stakeholders. These requirements precipitate the tensions of the position: personal time constraints, distorted information, and responsibility for making hard choices.
Insights from Enterprise Leaders
The role of enterprise leader carries comprehensive responsibility and the obligation to integrate the needs of multiple stakeholders.
Effective leaders exercise restraint with the authority and influence that accompany the role.
The leader’s time is not their own — they must allocate their share of presence and share of mind based on need, not preference.
Enterprise leaders rarely hear plain facts or receive direct, candid feedback; yet, their success depends on getting to the underlying truth.
Enterprise leaders must be willing to end debates with direction, make unpopular decisions, and hold others accountable for meeting “unreasonable” demands.
Know the position — your obligation extends to all stakeholders
The role of enterprise leader carries comprehensive responsibility and the obligation to integrate the needs of multiple stakeholders.
According to dozens of articles over recent years, Elon Musk is both the wellspring and the potential downfall of Tesla. His sweeping visions, unconventional management style, and bold decisions attracted investors. At a critical juncture in the company’s history, his erratic actions, apparent lack of management acumen, and open defiance of regulators became a magnet for short-sellers.
Many startups struggle after IPO. Transparency, shareholders who expect earnings and growth, and the attention of regulators and society mobilize powerful stakeholders from which founders were shielded during their development. Some new CEOs yearn for earlier management roles where the definition of winning was simpler. Some failed CEOs did not make the transition from the narrow definition of success that fueled their rise. Enterprise leaders shoulder the broad responsibility of serving diverse stakeholders with independent — even conflicting — interests.
Peer counsel
“Many people [in large corporations] climb by focusing on one stakeholder, even at the expense of the others… that is exactly the wrong behavior for the top job.”
“The early days of startups are all about big ideas and strategy… once it is a ‘real business’ you have to wrestle the details every day.”
“You better be in control of the things that can sink the boat.”
Know the position — be wary of your power
Effective leaders exercise restraint with the authority and influence that accompany the role.
“Nearly all men can stand adversity,
but if you want to test a man’s character, give him power.”
Abraham Lincoln
The role and requirements of the enterprise leader are unlike any along the path to reach it. Many attain the position through persuasive skills, aggressive execution, or affability. The authority of the leader’s role adds weight to their opinions and can lead to oversteering when they engage. Over-assertive behaviors at the top amplify and echo down the line. A heavy-handed leader with the best of intentions can send an organization into a tailspin. Effective leaders appreciate that the scope of their role and weight of their authority must be used deliberately.
Peer counsel
“Many of the skills that won you the CEO job are the exact opposite of the ones you should exercise once you have the job.”
“Once you wield the weight of the role, having a strong point of view can influence the team too much.”
“You have to be wary of the impact of your seat on others’ thinking.”
“When you are the integrator, everything changes. On the way to the job, you operated in a parliamentary system of influence; at the top, that kind of influence is toxic.”
Know the position — allocate for impact
The leader’s time is not their own — they must allocate their share of presence and share of mind based on need, not preference.
In an article collaborating with HBS Dean Nitin Nohria, Michael Porter estimates that enterprise leaders spend more than 40% of their time “advancing their agenda.” By implication, they spend the majority of their time doing things that do not advance their agenda.
While nearly all leaders agree that time is their most valuable asset, most feel they could manage it better. Experienced enterprise leaders treat their time as a strategic asset and allocate it accordingly. Through personal disciplines and tools, including the aid of a strong executive assistant or chief of staff, top executives must balance their time between short-term requirements and long-term goals. Effective leaders find a method that works for them to invest their time as a strategic asset.
Peer counsel
“I am a closet HR professional, strategist, and M&A leader; I had to rein in my desire to lead those functions from the CEO seat.”
“As CEO, you must not be selfish, in any way, with your time.”
“I prescribe my intended ratio of time amongst stakeholders and ask my assistant to notify me when it doesn’t align.”
“You can signal a change in strategy with time allocation — people around you will notice.”
Know the position — look beneath the surface
Enterprise leaders rarely hear plain facts or receive direct, candid feedback; yet, their success depends on getting to the underlying truth.
A Navy Captain toured a college student through the floating fortress under his command. A steaming cup of coffee was waiting on his desk when they reached his office. “Two things I don’t get when I am on board,” he explained. “Lukewarm coffee and the truth.”
Effective leaders find ways to get to the truth. They are aware that the organization will not — likely cannot — give them a complete or unbiased picture. They invite personal feedback, create meritocratic forums for ideas, insist on fact-based decision-making, provoke debate, and drill down with successive questions to test the motivations and grounding for opinions offered. Almost everyone builds walls of diplomacy to deal with their own discomfort and anxiety when engaging the top executive. Ineffective leaders add to the walls when they fail to model the honesty and directness they want from others. Effective leaders devise methods to get to the facts of situations and outlook of the stakeholders. They tear down the walls between them and the truth — respectfully, but relentlessly.
Peer counsel
“Be cautious with allowing strong opinions and persuasion to influence you; look for the agenda behind the idea.”
“Everyone comes at you wanting something.”
“My biggest errors came from thinking that the organization was bought into the direction as opposed to being agreeable in the moment; you learn not to take ‘yes’ for an answer.”
“Diplomacy is the enemy of clarity.”
Know the position — make the hard calls
Enterprise leaders must be willing to end debates with direction, make difficult decisions, and hold others accountable for meeting “unreasonable” demands.
If you were born before 1980, you are likely to have heard about President Harry Truman’s desk placard that read “The Buck Stops Here.” You may not know that President Truman first saw a version while visiting the Federal Reformatory in El Reno, Oklahoma, where the Warden, L. Clark Schilder, had one displayed on his desk. Whether a president or a prison warden, enterprise leaders must be willing to be the final stop for accountability.
Accountability for the performance, health, and conduct of an enterprise demands hard choices. Leadership never requires being unfair or uncaring; however, it often requires being unpopular. Decisions informed by principles may be easy to make but hard to swallow. Decisions based on judgement, such as setting stretch goals, may require personal resolve. The art of leadership lies in determining when to exercise authority then doing so with clarity.
Peer counsel
“I had always dealt with hard problems by asking great questions and letting others discover the solutions… it wasn’t working. I realized that I had to take control and set direction.”
“Leaders must lead, not do what the organization wants; if you follow the team, you will ultimately fail the team.”
“There is a real and vital role for the leader to make unreasonable demands; at the right point, you have to demand more than the team thinks they can do, and you have to be adamant.”
Know your role — know the mandate
For some enterprise leaders, the mandate is clear from the outset. “We had two potential successors — the Board chose me because they believed I would change our strategy and create greater capability for execution,” reported one of the CEOs interviewed. For others, determining the mandate becomes the first hurdle they must cross. “The Board never even asked me for a plan,” another contributor related.
Whether stipulated during the succession or hiring process or discovered through engaging the stakeholders, every enterprise leader must know their mandate. They should determine stakeholders’ incoming expectations for their era of leadership. They should invest to understand the types of leadership to which the shareholders (and their proxies), the Board, and the organization will best respond.
For the sake of the enterprise and its stakeholders, leaders must build a constructive relationship with the Board, or its equivalent for private companies. Neither the leader nor those charged with governing the enterprise can fulfill their obligations effectively without it. Yet, many executives see significant room for improvement in the relationship. Most Board members feel the same.
Insights from Enterprise Leaders
Experienced enterprise leaders see themselves as a steward of the institution who is entrusted to lead it through a portion of its journey.
The unique challenge given to each leader will demand different dimensions of leadership, combining persuasive, decisive, empowering, and developmental actions.
The expectations of every leader can, and will, change with shifts of technology, competition, regulation, society, and enterprise progress.
Establish a Board relationship with transparency, trust, and candor.
Know the mandate — deliver your leg of the journey
Experienced enterprise leaders see themselves as a steward of the institution who is entrusted to lead it through a portion of its journey.
The Pony Express began making cross-country deliveries in 1860. By sequencing riders with 75–100 mile legs, it was able to deliver high-priority mail from New York to California in less than 10 days — more than twice as fast as the next best option.
The idea behind the Pony Express was simple — break a monumental journey into pieces and find horses and riders who could handle each leg. For most leaders — those who are neither founders nor multi-decade CEOs — the task is to receive the enterprise from their predecessor, cover the terrain ahead as best as possible, and deliver it to the hands of the successor. Every leader’s era will have challenges, opportunities, and a dose of good and bad luck. Every leader inherits the shortfalls of their predecessor’s efforts; however, the best leaders respect those that came before and resist the temptation to blame. Successful leaders meet the challenges along their leg of the journey with the full measure of their efforts and give the next rider the best chance for success.
Peer counsel
“I was brought in as the ‘growth guy’ — to stimulate growth in a stagnant business… that’s how my tenure here will be judged.”
“Before accepting the job, I talked to the Chairman about what would define success at the time of my exit from the role; it clarified the Board’s expectations for my tenure.”
“This institution was here before and will be here after — I had to appreciate the history and the potential future to play my part.”
Know the mandate — lead on more than one dimension
The unique challenge given to each leader will demand different dimensions of leadership combining persuasive, decisive, empowering, and developmental actions.
An ancient and influential text on military strategy describes nine different situations each general may face and prescribes the objectives and tactics appropriate for each. Notably, it does not advise that generals stick to their strengths; rather, it demands that effective generals respond to the conditions.
Effective leaders incorporate multiple dimensions of engagement into their arsenal. Most have a preferred approach; however, they can pivot and use the leverage of their position through other modes of engagement when the situation merits the switch. A consensus-oriented leader sends a signal when they declare decisions. A decisive leader may inspire their team when they seek ideas and feedback. Effective leaders match their leadership tactics to the challenge at hand.
Peer counsel
“My ability to build consensus is my greatest strength; however, it is also a weakness. For some situations it was too slow or resulted in too much compromise in the solution.”
“On which dimension are you going to lead? Values? Principles? Mission? Authority? Consensus-building? You need to assess the situation and decide, not default to what feels comfortable.”
“Under pressure, most people revert to doing what they like or the things that make them feel confident. As the leader, you must always do what is needed, not what feels good to you.”
Know the mandate — expect to adapt
The expectations of every leader can, and will, change with shifts of technology, competition, regulation, society, and enterprise progress.
Fortis Fortuna Adiuvat translates to “fortune favors the bold.” This motto dates from the 2nd century BC in the playwright Terence’s Latin play, Phormio. Several elite armed services units have adopted it to recognize that courage and decisive action are the best means of dealing with uncertainty and the imperative to adapt and improvise.
Change is certain, and disruption will result — the only uncertainty will be the pace and degree. Some leaders aim to anticipate change and disrupt the industry. Some prefer optionality and nimble adaptation over the higher risk/higher reward path of attempting to shape their industries. In either case, effective leaders have the will to act decisively and accept change in the context of the enterprise and the expectations of stakeholders. They expect to adapt and improvise.
Peer counsel
“[An unexpected industry change] was going to cut core business revenues by 70% over two years; the nature of the leadership role changed immediately.”
“For me, the military was a good place to learn that life isn’t fair.”
“The biggest threats to any and every business are environmental change and orthogonal competition. We have survived both.”
“Business is messy. Life is messy.”
Know the mandate — build a constructive Board relationship
Establish a Board relationship with transparency, trust, and candor.
A McKinsey study in 2013 reported that only:
- 34% of Directors fully comprehended their companies’ strategies;
- 22% believed that the Boards understood how their firms created value; and
- 16% of Directors had a strong understanding of the dynamics of their firms’ industries.
A constructive Board relationship must include a two-way commitment to transparency, trust, and candor. Settling for anything less creates risk for the enterprise leader, the Board, and its stakeholders. Effective leaders view every interaction with the Board and its members as an opportunity to invest in the relationship. They embrace their obligation to help the Board govern successfully.
Peer counsel
“CEOs underestimate how crucial — crucial — it is to have a good relationship with their Board.”
“From Board members, you need: the ability to confide; transparency both ways; support, if merited; wise council and advice.”
“Board members need to be heard; when I go to dinner with them, I really just focus on listening.”
“The effectiveness of the Board is a function of the information they get from the CEO.”
Know your role — know yourself
Seasoned leaders, especially those that have retired or moved to a new role, reflect on the learning experience that leading an enterprise provided. As one veteran CEO commented, “you have to take the beatings to earn the wisdom and develop a certain equanimity.”
If the Board has done a good job in succession or recruitment, the essence of the leader will be well-suited to the enterprise and its mandate. Effective leaders strive to be authentic and find alignment between their principles and passions and the intended culture of the enterprise. They also expect pressure and remain open to personal growth.
Insights from Enterprise Leaders
If the leader is right for the challenge, their personal beliefs, principles, and values will align with the needs of the situation.
The impact of the leader’s style on the culture of the organization is part of the value they bring to their role.
Leaders should expect their decisions — even their beliefs and principles — to be pressured at several points over their tenure.
Effective leaders never stop developing — they evolve their perspectives and practices while remaining true to their principles.
Know yourself — trust that you are the right person, right now
If the leader is right for the challenge, their personal beliefs, principles, and values will align with the needs of the situation.
Experienced executive search professionals say the right CEO is determined more by fit than qualifications. Do they mean: a) fit with the specific challenge facing the company; b) personal fit with senior leaders and the Board; c) fit with the expectations of shareholders; or, d) fit with the culture of the company? Of course, they mean e) all of the above.
Retired executives who feel satisfied with their tenure in the top job often believe that they were the right person for the role at the time they held it. In truth, most can’t discern whether it was true when they were given the role or if it became true over the course of their experience. By exercising their judgment — on principles, strategies, people, and practices — leaders reveal their essence. Of course, no one is perfect, and those judgements will include mistakes. Effective enterprise leaders trust that the Board did their homework and pursue the role as its rightful owner.
Peer counsel
“Over time, organizations mold around the CEO, and the CEO molds around the organization.”
“Our culture is our operating system… it is grounded in my fundamental beliefs — things that have transcended industries, companies, and roles over my professional life.”
“I have followed the same framework [for leadership] for the last 18 years; I always revert to the same fundamentals.”
“Confidence in the CEO as a person is essential for attracting investment, whether you’re talking about a startup or the biggest company on the New York Stock Exchange.”
Know yourself — let your style influence culture
The impact of the leader’s style on the culture of the organization is part of the value they bring to their role.
IBM’s unofficial “uniform” of dark blue suits and crisp white shirts was well known. IBM legend has it that, on the first day as CEO, Lou Gerstner wore a blue shirt. Was he signaling change or just wearing what he liked? Is there a difference?
Where does the style of the enterprise leader end and the culture of the enterprise begin? Effective leaders don’t recognize the distinction. They translate the culture they want into their personal actions and reinforce it with everything they do: how they allocate their time; how they speak; how they ask questions and make decisions; how they hold themselves and others accountable; and what they celebrate. Does acting differently from the norm matter? It does if you want your actions to become the new norm.
Peer counsel
“I want to connect to the people in the business personally… I want to know their faces… I want to connect beyond the role they play at work.”
“Part of our culture is to be constantly curious — I must lead that [behavior] from the top and expect it of my management.”
“Everything is a work in process. Everything can be better. I don’t want anyone to ever feel that we have ‘arrived’.”
“The Board was looking for a CEO that was as different from the outgoing leader as they could find; they wanted a change in culture, style, and approach.”
“The leader must be the chief culture carrier.”
Know yourself — expect pressure
Leaders should expect their decisions — even their beliefs and principles — to be pressured at several points over their tenure.
In the Oscar-winning movie, The King’s Speech, Lionel Logue, speech therapist to King George VI, explains his actions, saying “…that’s what friends are for.” The monarch mutters, as much to himself as to Logue, “I wouldn’t know.” Being King, it would seem, often means bearing up to the pressures of the role alone.
Resilience, determination, and fortitude are requirements for a leader’s character. Difficult decisions, internal conflicts, and significant risks will always flow to the top of the enterprise. Holding others accountable will strain, if not damage, personal relationships. One enterprise leader shared their belief that the job description for the CEO should be: “have deep conviction, in the face of adversity, with endurance.” George VI would have agreed.
Peer counsel
“It comes down to Machiavelli’s question of whether it is better to be feared or loved; I have erred to the latter, sometimes to the detriment of the mission.”
“However strong you think you are; you realize that there are people actively rooting for you to fail, and it has an effect on you.”
“If you make a big, contrarian call, expect to be lonely. There will be plenty of folks inside and outside the enterprise to sell you short.”
“When ‘our culture’ is used as an excuse not to change — and it often is — I take it on.”
“Someone said that when it comes to matters of core principles, you have to choose your battles. I choose all of them.”
Know yourself — develop within your principles
Effective leaders never stop developing — they evolve their perspectives and practices while remaining true to their principles.
“The test of first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”
F. Scott Fitzgerald
One irony of the enterprise leader’s role lies in the perception that the leader should be fully developed, yet there is no greater development challenge or opportunity than leading an enterprise. The parallel challenges for the effective leader are to be decisive, yet remain open to options and new ideas and to convey confidence and clarity, yet remain humble about the things they do not, or cannot, know. To manage this feat, leaders must have a foundation of personal principles that guide their choices even when their own knowledge and the information available to them do not prescribe the best option.
Peer counsel
“In the end, I made the biggest decision of my tenure as CEO based on principles because there were too many unknowns and uncertainties to make it based on economics. It turned out to be right — but I didn’t know it would be at the time.”
“I have never met a CEO that has the ‘complete’ skill set. To be good, you need at least one area of distinctiveness; to be great, you need more than one.”
“You have to stay true to your core but meet the demands of the position and the situation.”
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Revisit Chapter 2.
Read Chapter 4 here.
