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ISSUE 5
IN THIS ISSUE:
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Don’t hire the wrong CEO
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Fear of feedback hinders performance
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Resilience: Improving performance in tough times
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Our services
Don’t hire the wrong CEO
The right CEO can make or break an organisation, yet boards often go about CEO selection all wrong, say leadership experts Warren Bennis and James O’Toole in their HBR paper on the subject. They cite a study conducted by Rakesh Khurana, a professor at the MIT Sloan School, showing that CEO appointments in the USA after 1985 were three times more likely to be fired than CEOs that were hired before that date. Similarly the Center for Executive Options found that one-third of Fortune 100 companies have replaced their CEOs over a 5 year period. Certainly some of which could be attributed to "natural causes," but not all.
Bennis and O’Toole concede that factors such as hyper competition, globalisation and mergers may be contributing to the diminishing half life of executive tenure but that they are not convinced. Having examined evidence surrounding premature retirements of high profile executives, they agree that one cause has been the executive’s incompetence in coping with exogenous developments. They think the underlying culprit is the self defeating way in which boards select leaders.
They comment that most boards are so unclear about the definition of leadership, they are picking the wrong people. They suggest boards can reverse the trend by following several guidelines.
First, boards must come to a shared, accurate definition of leadership. Simply put, leaders must be able to move human hearts; to challenge people and make them want to scale steep peaks.
Second, boards should strengthen the CEO selection process by resolving strategic and political conflicts amongst themselves. An agreed-upon strategic direction will make choosing the CEO with the right vision for the company that much easier and can clarify the job for the new CEO. (This is a service PeopleFit has provided to boards in the past).
Third, boards need to measure every CEO candidate’s soft qualities. Economic measures are important, but integrity, the ability to provide meaning, and the talent for creating other leaders are critical.
Fourth, boards should be beware of candidates who act like CEOs. Charisma and glossy pitches can be enticing, but are rarely the stuff of true leadership.
Fifth, boards should accept that real leaders will more than likely overturn the status quo. Without realising it many boards are averse to outsiders that will shake things up.
Sixth, boards need to know that insider heirs are not usually apparent.
And finally, boards should always avoid making a hasty decision. Hiring the right CEO is a slow process at best.
Bennis and O’Toole comment that boards have no one to blame except themselves if their CEOs disappoint them and that if you want to find a leader you must look for one. Otherwise you will get something else, probably something far less.
Nobody likes performance reviews. Subordinates are terrified they will hear nothing but criticism and bosses think that subordinates will respond to the mildest criticism with stonewalling, anger or tears. It is estimated that at least half of executives never ask for feedback. Fear of feedback can result in maladaptive behaviours such as procrastination, denial, brooding, jealousy and self-sabotage. However with the right environment and a willingness to adapt to receiving feedback, old patterns can be broken and appropriate tools can be used to identify areas of strength, development of new skills and opportunities for personal growth and improve company performance1.
In most organisations feedback typically comes in the form of an annual performance review with the focus unfortunately being the forthcoming remuneration review. Without an environment where regular feedback is the norm, the annual review may become a highly stressful situation for all involved. Whatever the cause of discomfort, the very threat of a critical review can lead some to unhelpful behaviours:
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Procrastination: Usually done consciously, commonly with an element of hostility or anger.
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Denial: An unwillingness to face reality or fail to acknowledge the implications of the situation.
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Brooding: A powerful emotional response taking the form of a morbid preoccupation and sense of foreboding.
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Jealousy: Comparison is normal but this becomes an issue when based on suspicion, rivalry, envy, or possessiveness.
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Self-sabotage: Usually unconscious behaviour commonly with an element of inappropriate behaviour or comment, or unusual/poor judgement. Adapting to feedback (inevitably about asking people to change) is critical for managers in most positions. It is possible, and indeed necessary, to think positively about change to alter how we respond to feedback and the changes it demands. To alter how you respond to feedback you need to:
If seeking feedback, it is important to assure the provider that criticisms and suggestions will be heard, appreciated and positively acted on. During the meeting ask for specific examples and suggestions for change while remaining physically and emotionally encouraging about what you hear. Watch for indirect feedback in body language and tone. Thank them for the feedback and indicate that you will get back to them after you have had the time to absorb what you have heard.
Although more than two areas of behaviour may need to be modified, most people can’t change more than one or two areas at a time. Taking small steps and meeting discrete goals reduces your chance of being overwhelmed.
Develop an environment of positive regular feedback and then you will be ready to move to the next phase with a formal 360 degree programme to drive personnel review and/or growth and development programmes, improve team dynamics and communication and ultimately deliver better business performance.
1 Harvard Business Review: April 2003, 101-105.
Resilience: Improving performance in tough times
"I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed."
Michael Jordan
When confronted with setbacks and adversity, what is it that makes some people or organisations bounce back and adapt while others snap? The quality, simply known as resilience, is unfortunately only something you realise you have after the fact. The question this raises is can we build resilience in ourselves or within our organisation to better face adversity when it occurs?
In looking at resilience, Revich and Shatte in "The Resilience Factor" proposed that there is not a genetic set point for how resilient we become but it is how we choose to think about adversity and respond to the events that we are faced with that matters. To affect this, first we need to understand the attributes that make a person or organisation more resilient. Next we need to know what it means to slip down the "death spiral", and finally we need to develop ways to combat destructive emotions and thinking patterns that can push us to breaking point1.
In looking at resilience theories Diane Coutu2 found that almost all theories overlap in three ways. Resilient people possess: a staunch acceptance of reality; a deep belief, often buttressed with strongly held values, that life is meaningful; and an uncanny ability to improvise. While an optimistic nature is also commonly seen as a factor this is true only as long as this does not distort a sense of reality.
For organisations, the second factor of "finding meaning" is actually more important than having resilient people on the payroll2. Finding meaning in one’s environment is related to possessing strong value systems because this offers ways to interpret and shape events. Commonly held values provide a consistent framework on which strategy and mission can be adapted. Without this, if employees are all interpreting reality in different ways, their decisions and actions may well conflict and as the weakening of an organisation becomes apparent it is the resilient employees that are most likely to seek other opportunities.
It is a fully engaged workforce that forms the basis of a resilient organisation and provides the commitment, initiative and improvisation to persevere. Many organisations offer people development and wellness programmes that cultivate resilience through valuing the individual beyond merely being units of economic production. This means respecting our health, building constructive emotions, training our minds and developing a sense of meaning and purpose.
The Death Spiral
Overload, loss of attention and confusion signal the start of the death spiral. Working memory is overloaded, leading to cognitive disengagement and the consequence of poor decisions, dullness and apathy. The important thing is to recognise triggers at an early stage and focus on enhancing resilience.
Building resilience is about having physical vitality, mastering and overcoming negative stress and adopting a performance mindset. With a little support and direction, people can take advantage of well-tested practices to improve their lives. When resilience is cultivated we enjoy increasing periods in a state known as flow3. Flow is achieved through positive emotion when facing a challenge and when our level of competence and the challenge of the task are equal. In flow we are fully engaged in the activity we are participating in and are stress-free even if pressures are high. This occurs because we have a singular focus on the task at hand – a task that we have the skills and control to complete. The absence of stress and the resulting stress hormones (adrenaline and cortisole) means we are able to operate physically, cognitively and emotionally at our best. Getting people out of the death spiral, engaged, focused and in flow is imperative for a high performance culture, improved business performance and a resilient organisation able to adapt with change.
1 Employment Today: August 2006, 19-22.
2 Harvard Business Review: May 2002, 46-55.
3 Good Business: M Czikszentmihalyi, 2003.
"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."
Charles Darwin
Our services
Executive recruitment and search
A thorough and methodical approach is necessary to secure a successful outcome when recruiting a new member to your team. The process, tailored to meet your specific needs, is a combination of sourcing candidates through advertised search and/or selective targeting. We use best practice methodology which includes analysing applications against agreed competencies, exploring candidate potential through understanding their educational/work background and their personal traits, critical strengths and potential limitations through using specific assessment tools and reference checking to verify and/or expand impressions. We also assist with employment agreement negotiation.
Organisational performance management
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Change Management – designing a programme of change that can be implemented in a lawful, productive and fair manner
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Systems and Processes such as performance management – including system design and training and supporting your people in implementation and changes
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Structural Review – ensuring your structure and lines of accountability are clear and best aligned to support organisational goals
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Strategic Planning – assisting you to develop coherent, relevant plans supported by well defined measures and translated into personal performance objectives for key staff
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Succession Planning – building capability and readiness to fill critical positions
Assessment
Psychometric assessments are used to provide information on an individual with regards to their attributes, attitudes, critical strengths and potential limitations. We are registered with the NZ Council of Educational Research and Saville Holdsworth Ltd.
Assessments can be used for:
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Evaluating individuals in the recruitment process and during the training and development process
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Evaluating and enhancing team dynamics
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Part of a career coaching programme
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Enhancing success of potential and new mergers and acquisitions – feedback and development strategies resulting from assessment of mutual fit and compatibility at board, management and team levels.
Executive leasing
PeopleFit Ltd is able to source experienced executive lessees from its substantial database. We have a range of contacts which enable us to search globally for high calibre people with the experience and skill set that are in high demand and difficult to access.
We choose to form collaborations with consultancies of similar philosophy to ourselves so we can assure that the quality of our service is maintained at the industry’s best practice standard.
On our register are professionals with proven expertise in a wide range of management skills including:
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Accounting, auditing and financial management
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Sales, marketing and distribution management roles
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Strategic planning and special project management
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Personnel and operational management roles
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Engineering
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General management
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IT & communications
The principal outcomes for companies or organisations using executive leasing are accessibility to professionals on your own terms, affordability with a source of top expertise, and flexibility of tenure to suit your needs.
Employment and industrial relations and support
We can assist in enhancing your ability to meet the legal requirements of acting in "Good Faith" and at the same time, build workplace commitment to productivity and productive relationships.
Our services in this area include:
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Negotiation and drafting employment agreements
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Training and coaching managers, team leaders and union delegates in disciplinary processes
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Representing you at mediation services or at the Employment Relations Authority
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Providing an independent facilitation and conflict resolution service
Training and development
We provide customised training and development programmes based around your needs in a broad range of areas from Customer Service through to Effective Team Management Skills.
Career coaching and management
We work with specific tools to identify an individual’s preferences, skills, strengths and limitations and goals. We assist them in planning future direction and building appropriate skill bases to achieve their goals.
Remuneration advice
We are able to provide remuneration advice based around our knowledge of positions in the current market. We can also undertake remuneration surveys where required.
Phone: 03 379 8909 Fax: 03 365 4494 PO Box 391, Christchurch