Saturday, March 21, 2009

What to Avoid When Choosing a Successor?

Choosing a great successor is one of the most important accomplishments that a CEO can achieve. It is often presented as a paint-by-numbers process during which executives concern themselves with abstract concepts such as strategic fit, core competencies, and long-term shareholder value. However, the process of evaluating potential successors can often be as influenced by emotions as it is by logic! From a behavioral (or human) perspective, when evaluating potential successors, we should first look at ourselves.

Beware of the following three classic mistakes leaders make when considering potential successors. All three can cloud our objectivity and diminish our ability to evaluate candidates.

1. Why Doesn’t He Or She Act Like Me? As a rule, successful human beings tend to “over-weight” their own strengths and “under-weight” their weaknesses when evaluating others. The more successful we become, the more we can fall into the “superstition trap,” which, simply stated, is, “I behave this way. I am a successful leader. Therefore, I must be a successful leader because I behave this way.”

All successful leaders are successful because of many positive qualities and in spite of some behavior that needs improvement.

As a leader, take a hard look at your own strengths and challenges. Recognize that you will have a natural tendency to forgive even large errors that resemble your weaknesses and to punish even small flaws that occur in your area of strength.

After making a list of your strengths and challenges, list the strengths and challenges of your potential successor. As hard as it may be, try to think like an objective outsider. Challenge yourself to recognize that the behavior that you feel is most important for the company may really be the behavior that is most important for you.

2. Why Doesn’t He Or She Think Like Me? It is hard for successful leaders not to believe that their strategic thinking is the right strategic thinking. As you proceed in the succession process, you are going to have to let go. It can be very hard to watch your successor make decisions that are different from yours. It is especially tough since, as long as you are still the leader, you have the power to reverse the decisions.

Your successor—not you—will manage your organization in the future. As hard as it may be, you have to let him or her begin to make a bigger and bigger difference in developing strategy. As long as the organization will be headed in a positive general direction—and achieving results—try to recognize that your successor’s different path may actually turn out to be a better path.

3. Why Doesn’t He Or She Respect and Appreciate My Friends? We all tend to overvalue input from people that we personally like and respect and undervalue the opinions of people whom we don’t love as much. Face it: your successor’s personal preferences are probably different than yours. As such, he or she will likely choose other trusted advisors.
Invariably when transition occurs, some of your friends may lose status or power and may end up leaving the company. This can be tough—both for them and for you.

The Bottom Line: Respect your successor enough to let him be himself, follow his own path, and choose his own key advisers.

Marshall Goldsmith

Monday, March 16, 2009

Coach CEOs Through Stress for Success.

Stress for Success...

In times of crisis, the natural response is to buckle down, lie low and try to maintain the status quo - which, in many cases, means the bottom line. The unfortunate side effect is learning and development initiatives, especially at the senior management level, often decline.

According to Dr. Peter Warshaw, a vice president at RHR International, a group of corporate psychologists, now is the time to offer CEOs and senior managers developmental support so they can navigate the company through current stormy conditions.

"In very turbulent times, these are the most meaningful developmental experiences that executives have," Warshaw said. "If their organizations provide them with a little bit of support, a little bit of reflection, and a little bit of a safety net, the development of our executives through this is going to be really, really tremendous. Talent development, HR folks and line managers need to think about [this] as a real opportunity to make lemonade out of lemons."

Warshaw outlined a few key pieces of advice talent managers can convey to their senior leaders to help them help their companies:

1. Lead and manage effectively.
"Crisis leadership is one that's not dictatorial, but people are really looking for leaders to put stakes in the ground and say, 'This is what we stand for,'" Warshaw said. "It's very difficult and challenging to lead with both the demeanor of being calm and in control and at the same time invoke a high sense of urgency in the organization. [But it] is extremely important."

2. Clarify the message.
"If the only message that is coming from the C-suite is 'cut costs' - which is certainly an important one, it's very reactive - it sends fear and trepidation throughout the organization," Warshaw said.

CEOs and senior managers should reiterate what the company stands for and explain that, for the company to continue to stand for that, layoffs or budget cuts are unpleasant requirements. However, this is not the time for grand vision, Warshaw said. Keep it simple and current.

3. Swap scenario planning for strategic planning.
"The whole idea of strategic planning is out the window. What the best CEOs and CFOs are doing these days is what we call scenario planning," Warshaw said. "They're working out the scenarios in advance and asking the 'what if' questions: 'What are we going to do if our revenue drops 10 percent?' 'What are we going to do if our revenue drops 30 percent?' [They should have] those plans at least reasonably thought through so that if the bottom drops again, they're prepared, and they're not running around like chickens with their heads cut off and having knee-jerk reactions that may be damaging to the company."

4. Ask for help.
"This is not the time for executives to go off alone or make the decisions in a singularly top-down way," Warshaw said. Typically, it's very difficult for CEOs to ask for help, he said, but it's critical right now. There are two kinds of help that should be sought: internal and external. Internally, CEOs should meet regularly with senior teams to make sure they have the best thinking at the table. They also should hold one another accountable for their actions. Externally, CEOs should cultivate relationships with advisers, board members or even groups of other CEOs so they can let their guards down, engage in self reflection, talk about their concerns and get emotional support, Warshaw said.

"It's those people outside the organization that are particularly helpful around things, CEOs and other senior executives can't really show and disclose within their organization," he said. "Not reaching out doesn't necessarily mean disaster, but it is a recipe for disaster."

5. Develop new skills.
"Executives are being forced to develop new skills by necessity," Warshaw said. For example, one leader might be very analytical and make decisions based reports only, while another might be more intuitive and listen to his or her gut.

"In these turbulent times, neither one of those styles is sufficient," he explained. "People who are analytical have to learn to be more intuitive, and people who are intuitive have to be more analytical [while also] rely [ing] on the best thinking of their teams to help balance that out."

Agatha Gilmore
[About the Author: Agatha Gilmore is a senior editor for Talent Management magazine.]