I am sure you are working very hard to close the year strong and soon (or maybe already) you will be evaluating your company’s final 2016 performance. And your Board will be looking at your performance also! What kind of grade would you give yourself if you were on the Board?
When you reflect on your business in 2016, you may notice 3 compelling and sometimes competing forces at play when you are running your company: your Associates, your Customers, and your Board. The challenge of managing these 3 forces is that the success of one force may be at the total expense of the other. For example, the Board may want you to improve profitability, and your associates may want more pay, and your Customer may want a lower price. How do you make all 3 of these happen simultaneously? Therein lies the challenge and the fun of being the CEO! There is pressure. A lot of pressure. And it’s coming at you from many directions. Your success at managing these 3 forces will mark your grade as the CEO. I call this talent: Managing the Epicenter.
LEADING YOUR BOARD
To this point in my career, I have participated in over 600 Board meetings either as a President/CEO, or as a member of a Board myself. I can tell you it is difficult to manage your Board but let’s start by understanding what motivates and drives them. First, the Board has the final responsibility for the success or failure of the company, and therefor the Board will get involved in selecting and grading the CEO. They are usually stockholders and therefor have a personal interest in the company succeeding. You are going to always have up quarters and down quarters, and the Board will be there through it all, for the most part challenging you and pushing you.
“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.”
Leonardo da Vinci
These inspirational words are from one of the greatest minds the world has ever known. I highlight them here because they capture the essence of what the Board wants you to deliver as the company leader: deliver results! And have an urgency about doing it. It’s not about ‘moving in the right direction’ or ‘understanding the issues and opportunities’. It’s about financially delivering results today!
The Board expects you as the CEO to execute. They want you do what you told them you would do, strategically and financially. And you should want that too! CEO pay is typically tied to hitting the same targets! For this reason alone, you should make sure your strategic and financial goals are defined, hopefully around all 6 dimensions of The Growth Cube!
Getting results starts with competing hard:
“Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running.”
This is how your Board thinks! And this better be how you think if you are the CEO! You cannot just hold the reins where you are today. You were hired or put into the top role because you had ideas and talent that could move the company to the next level.
WHY SOME CEO’S FAIL WITH THE BOARD
Most executives get to the top because of their talent, but those who fail lose it for other reasons, and its mainly due to pressure. Some great CEO’s have difficulty with Boards and just cannot make it through the Board ‘attack gauntlet’.
However, it must be noted that CEO’s are partly to blame for some Board members who are skeptical, challenging, and sometimes belligerent. I have made mistakes myself, and that’s why I want to guide you because there could be deep hazards that await you at the Board room level if you are not prepared. All of these CEO mistakes are within your control:
- Some CEO’s who implode do so because they are not upfront with their Board. They do not tell them the whole story. This is the worst thing you can do. Tell the good and the bad. Tell both sides of the story. Give them the full picture, along with your recommendation.
- Some CEO’s are not team players and miss the big picture. If you are part of a larger company, make sure you are not only thinking about the value creation within your unit, but how you can help drive the value in your parent company, and how you can partner with colleague’s running other business units.
- You cannot ignore or avoid the Board members. CEO’s in smaller companies and startups may underestimate the Board. You should reach out individually to each Board member and develop a relationship. If you think it is insignificant or not important, you will do this at your own peril. In a small company, the ‘Board’ may be just one owner.
Leading your Board is an art and a dance. It is high-pressure and challenging. And your ability to bring balance and perspective to the discussion will be a constant fight. There is a reason why I labeled this article: Leading YOUR Board. In the end, this is Your Board. As best as you can, control the topics, lead the discussion, listen, and fight for what you believe in! Try to make your meetings stimulating and productive. And if you are hitting your targets, the Board will probably even have some fun!
Being the CEO is a unique role, and it takes a special person to put it all together and do it well! And when you start beating your plan, remember there will always be ups and downs in your performance over time. And the Board room is filled with Alpha males and Alpha females. Be smart. And be humble.
“When you have a great quarter, say little. Push higher. Business as usual.
When you have a poor quarter, do the same. But also, have new ideas and be proactive with a sense of urgency.”
Bottom line: Your Board will be reviewing your 2016 results and 2017 priorities and financial targets. Have you thought about doing your 2017 strategic planning using the Growth Cube format? It’s a proven, tested tool that can help prioritize your strategies, widen your view of your potential growth opportunities, and help take your business all the way to the top in 2017!