Lonely at the top? How can CEOs get the support they need to grow their businesses?
The secrets of great leadership are wide-ranging and well-documented – but some of the most successful leaders of the modern generation all claim to do one simple thing: they work out. That’s right, plain old-fashioned exercise is regarded as a key factor in the accomplishments of some of the world’s most prominent entrepreneurs, with many citing the correlation between physical fitness and mental sharpness as the science behind their success. Now I’m not going to argue with Messrs Branson, Zuckerburg and Dorsey – in fact my continuing endeavours as an amateur triathlete suggest we share similar beliefs if not a similar bank balance. But my own analysis of successful leaders – and in particular the characteristics of effective CEOs – suggests a variation on the theme. Strong leadership may well be contingent on working out, but it’s also dependent on working together.
We all know the expression ‘it’s lonely at the top’. It’s a cliché, but it’s true. There are high profile examples all around us, with two of the most recognisable once again underlining parallels between business and sport that I’ve previously discussed in this forum. Undeniably, the principles of great leadership transcend all professions.
Few leaders have looked lonelier in recent months than Theresa May in the wake of her General Election debacle and Arsene Wenger following three consecutive 5-1 defeats to Bayern Munich in the Champions League. (Clearly, in both cases, presiding over a European exit can be a tortuous experience). Yet their apparent loneliness is arguably self-inflicted. Critics claim that the authoritarian and insular nature of both May and Wenger’s leadership styles, along with their reluctance to seek input and perspective from others, is at the root of their travails. They’ve found out the hard way that a more collegiate approach – and in Arsenal’s case, perhaps a defensive coach – is the secret to sustainable success. The same is undoubtedly the case at the top of the Boardroom.
Loneliness is a familiar feeling for many CEOs. It’s perhaps not surprising; business leaders are under enormous pressure to create value, drive growth and deliver results for both internal and external stakeholders. These are huge responsibilities and it’s easy to understand why many believe they shoulder the burden on their own. The reality is, they don’t. Or at least they don’t have to, since there are a variety of resources that CEOs can turn to for support. True, CEOs are ultimately accountable for results – good, bad or indifferent – but match-winning performance does not need to be a solo pursuit, it works much better as a team sport.
Helping hands for CEOs
So how can CEOs get the support they need? The options are out there. The past few years has seen significant growth in executive coaching as business leaders look outside for professional guidance and mentoring. Executive coaching can undoubtedly assist personal growth and effectiveness to lead organisational change. But when it comes to shaping strategic decision-making – the core of the CEO remit – it invariably pulls up short.
The most logical strategic resource open to a CEO is the executive leadership team. The executive leadership team offers a rich source of specialist expertise, schooled in the organisational culture and cognisant of its challenges and goals. But the dynamic between the two is still tricky; whereas individual team members typically have a one-dimensional focus, CEOs have a broad agenda and are required to look across everything. As a result, CEOs often feel they need to operate at a level above their executive team, depriving themselves of the opportunity to bounce ideas off senior leaders. This naturally leads to strategic decisions being made in isolation and perpetuates the loneliness of life at the top.
The value of the Non-Execs
Savvy CEOs see their board as a strategic asset and use it to shape their thinking. Moreover, the most effective maximise the value of their Non-Executive Directors (NEDs). NEDs are often the strategic sounding board that CEOs desperately need but seldom feel comfortable to invite from their peers. Unlike the executive leadership team, NEDs are not caught up in the day-to-day of the business – they’re independent of it – enabling them to offer an impartial view.
NEDs offer a different kind of independence to executive coaches, typically drawing on sector-specific or discipline-specific experience to help ensure that CEOs are asking the right questions and thinking about the right things. Where executive coaches focus on the personal effectiveness of a CEO, NEDs concentrate on the strategic effectiveness of the business – offering objective advice on the definition, direction and delivery of strategy. Where it works best, a NED will provide both a sounding board and a helpful ‘nudge’, nurturing a ‘course correction’ relationship that positively supports a CEO.
The closest NED relationship is invariably between the CEO and the Non-Exec Chair. In the most effective examples, the latter not only has responsibility for board effectiveness, it is also more likely to maintain regular dialogue with a CEO in between board meetings. There’s a strong argument for ‘between meeting’ engagement to be maintained with all board members to ensure that thinking is proactive, holistic and collaborative.
In recent years, boards have begun to appoint NEDs with specialist domain expertise to address company-specific strategic challenges. A good example of this is in the digital domain where there’s a growing trend towards boards appointing digital NEDs. The development follows 2014 research that showed a high majority of boards lack the digital leadership required to meet the challenges of digital/business transformation. The Russell Reynolds study of all board members in the ‘Global 300’ companies revealed that only 10% of boards could be classified as ‘highly digital’. This indicates a strategic capability gap that clearly needs addressing. Thankfully it seems progress is being made.
The enduring importance of digital leadership – a theme I’ve explored previously – is significant. However, digital is just one area where CEOs can benefit specialist domain expertise from NEDs. Outside of digital, proactive organisations are increasingly deploying Non-Exec specialists with regional, customer or commercial expertise to provide strategic counsel to the leadership team. These specialists are offering invaluable support to CEOs both within, and crucially outside of, formal board meetings.
An alternative approach – and one that’s rapidly gaining traction – is the use of specialist Advisory Boards. Advisory Boards offer a totally different kind of resource, comprising paid advisors rather than company employees or NEDs. They typically focus on specific, resonant business challenges and solicit the independent and regular input of experts in the topic. Advisory Boards are useful in that they can help businesses address gaps in knowledge without needing to alter the conventional structure of the board. Crucially, they’re an inexpensive way of bringing significant expertise into a business without the burden of fixed employment costs. The use of Advisory Boards is becoming very popular, particularly in areas such as digital strategy, technology and new/emerging markets. Their value is both significant and demonstrable.
So the message is clear: in today’s ever-competitive and highly pressurised markets, there’s no need for CEOs to find life lonely at the top. Effective leaders adopt a more collegiate approach, leveraging the divergent skillsets of NEDs, Advisory Boards and, of course, their executive leadership teams to shape strategy and drive growth. It’s an approach that makes sense. The most successful leaders recognise it’s far better to lean on others for support than to stand alone until they fall. There’s a lesson in there for Arsene Wenger. It may be too late for Theresa May.
In the final analysis, the advice of Branson and co is eminently sensible. After all, healthy body, healthy mind. But to be truly fit for purpose, perhaps it’s a good idea for CEOs to mix the metaphors: work together and it might just work out.