7 Mistakes most CEOs make!

When going is good and company is on growth trajectory, CEO is like a God. His/her word or action is sacrosanct and beyond challenge. Board of the company, shareholders and media are all praise and plus for him/her. And, then comes the down slide. This is the story of most CEOs worldwide. There are very few exceptions, who may still survive at their peaks.

What is that CEOs do or don’t do, which leads to their rise and downfall?

  1. Shareholders’ value overrides people values
    By people values, I mean here creating values for customers, suppliers and employees.
    No doubt, business is all about making profit and increase shareholders’ wealth. I have seen the most CEOs hammer their hierarchy for these 2 aspects much beyond belief; forgetting that “the end” by itself is not “means”! Shareholders’ value is created by successful business and success in business comes from sound strategies for management, product, marketing, selling, R&D etc. However, behind all these strategies, are people to envision and execute! It is unfortunate but true that “return on capital, cash flow, earning per share and other financial parameters” receives CEOs’ attention the most and people parameters the least.
    Correct focus on making people competent and courageous, enthusiastic and empowered would automatically make lot of performance parameters of company to fall in place like jigsaw puzzle!
  2. Focus on what brings success; not on what causes failure
    This is a wide spread problem – most know what gives success and hence find it easy to focus on that. If success does not show up, it is also convenient to pass the buck and blame. To understand what can cause failures requires time, efforts and energy, which most do not have or want to spend.
    It is the simplest logic that if you remove causes of failures, what you would be left with is Success. Yet, it is least understood and used in practice!
    If CEOs can defer and devote their attention to causes of failure in advance, as opposed to what causes success, they would make a difference in their organizations of day and night.
  3. CEOs gather around them those, in whom they see traits akin to theirs!
    This is a perennial problem. People tend to follow or emulate those in power and prominence like CEOs! And it is also a human weakness that when you are in power, you tend to lean more on those, whose style or flair i.e. trait, you find like that of yours. These 2 factors could spell more than 1 problem:
    –  If CEO’s traits are not terrific, followers would turn out to be terrible.
    Leadership tunnel would go for a toss.
    –  Most managers would attempt to emulate their CEO; but some would make it and others would fake it. If CEO is not careful, he or she may be swayed away by the latter, because ones, who could fake tend to be loud mouth and hence get noticed first!
    –  Most CEOs do not have time to notice these key aspects and corporates often become playground for politics. So, genuine and galvanized employees with leadership mental languish and leave!
  4. Being in hurry most time
    Most CEOs are in hurry, jet set and end up doing multi-tasking. Maladies of running short of time, most time are many and mutilating:
    –  They speak most of time, hear their voice and hence, can become poor listener – an ill for good leadership.
    –  They could lose patience and become grumpy.
    –  They try to be perceptual and judgmental.
    –  They do not get enough time to think; but most time only to act.
    All of above do not augur well for effective and elevated leadership.
  5. Window dressing under their nose escaping their eyes
    Believe me, this is most practiced and many managers or executives do this subtly or surreptitiously. If CEO is a strong leader, his people would do everything to present and speak what would please him/her. Picture and performance, which they may present is rosier than reality and duly wrapped up with complex caveats to save their skin. Such presentations are always complex and lengthy.
    If CEO is a weak leader, people down in hierarchy would twist and turn to suit their agenda and objectives, in any case.
    Either way, true picture of a company is blurred to the extent of 20 to 35% and when surprises show up, people seek shelter under safeguards they have already built in; rather than owning up! Do not be surprised that in corporations, bosses spend 35 to 40% of their time in preparing presentations and attending conferences!
    A CEO cum good leader must direct his top executives/managers vociferously that he wants to see things “as is where basis” every time and a simple roadmap to improve and grow, without if and buts! Spending more than 10% of their time for presentation and reporting should be held against bosses’ performance.
    This simple step is sure to radically change culture and character of the company! Rather than window dressing, they would keep it always well dressed in n out!! I have been a witness to this kind of Change.
  6. Old guards and associates are Loyal; but not necessarily Leaders
    Most CEOs like to count on familiar faces and there is nothing wrong, as they are faithful and need to recognized. But, there are very few, who would evolve with age and be agile to cope up with challenges of current time. Most, however, become dogmatic with age, with fixed ideas and free of risk approach.
    Many CEOs and company boards find comfort zone in old guards and put stakes on them. This is alright, only when you want company to keep going as is; but that would not help it grow or transform.
    CEOs need to get over such biases, if best people are to be picked inside or outside.
  7. Emphasis on “What should be done” as opposed to “What should not be done”
    We all fall prey to pious platitudes and hence, make holy statements – what we should be and do. Seldom, we would speak what we should not be and not do. CEOs are no exceptions. But, repercussions at that level could be repressing.
    It is astonishing that most management books, programs and training do not talk on above lines. The two are diametrically different and can make a dramatic difference to an organization!
    1st is a“Desire  and 2nd is a “Direction”!!! A company needs the 2nd.

My surmise at the end “What CEOs can often fail to do, you (if not a CEO) are more prone to failures. Become aware, how 7 mistakes can make you miserable!”

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7 Comments
  • Aug 27,2012 at 6:53 pm

    Transferred from LinkedIn
    Pankaj Rai Mehta has sent you a message.
    Date: 8/25/2012
    Subject: RE: 7 Mistakes most CEOs make!
    Thank you. I always find your thoughts insightful and practical. Pankaj

  • Rudra
    Aug 13,2012 at 1:52 pm

    Considering my relatively smaller career, I would love to agree most with the 5th and the 6th mistakes that you mentioned – have seen it… have experienced it!!

    And yes, I am not surprised at all when you say in corporations; bosses spend 35 to 40% of their time in preparing presentations and attending conferences! 😛

    Well, irrespective of a, somewhat matured mind, I still think I am a bit too young to comment anything more on CEOs… but this post will surely help me down-the-line when I become one – eventually!! 🙂

    Thanks!

    • Aug 15,2012 at 11:23 am

      I appreciate your matured thinking; however please remember that small or big career or experience by itself is not important. It is essentially qualitative aspects, which matter most! Thanks for sharing your experience, that you have made.

      Essence of this post is that when CEOs can commit as many or more mistakes, who reach that position after much drilling and grilling, it good to know for everyone at every stage, where human mind is most prone to mistakes!!

  • Anup Mazumdar
    Aug 10,2012 at 12:21 pm

    Dear Sir,

    Very interesting! Got some insights which I will try and stay wary of.

    Regards,
    Anup

    • Aug 10,2012 at 12:43 pm

      I greatly appreciate your views! I am glad that your approach remains positive!!

  • Aug 8,2012 at 10:01 pm

    Transferred from LinkedIn
    John S. Gundersen C.P.S.M. has sent you a message.
    Date: 8/08/2012
    Subject: RE: 7 Mistakes most CEOs make!
    Great advice in this – Thank you Murli

  • Murli Lohia
    Aug 8,2012 at 9:55 pm

    Received directly From: John.Gardner@emerson.com [mailto:John.Gardner@emerson.com]
    Sent: Wednesday, August 08, 2012 7:27 PM

    Murli

    Thanks

    I liked this one a lot!

    John
    John F. Gardner, P.E.
    Senior Vice President – Global Strategic Accounts Program

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