A Guide to the Challenges and Opportunities of Being a Top Executive
Being a CEO is one of the most rewarding and challenging roles in the business world. It allows you to shape the vision, strategy, and culture of your company, and to create value for your stakeholders. But it also exposes you to many risks, pressures, and responsibilities that can jeopardize your career.
In this article, we will explore some of the common pitfalls that can lead to a CEO’s downfall and some of the best practices that can help you succeed and thrive as a top executive.
The Common Pitfalls That Can Lead to a CEO’s Downfall
According to a study by Strategy&, a division of PwC, the average tenure of a CEO in the world’s largest 2,500 public companies was 7.2 years in 2019, down from 7.8 years in 2018. The study also found that 39% of the CEOs who left their jobs in 2019 were forced out, either due to poor performance, ethical lapses, or board disagreements.
This shows that being a CEO is not a secure or stable position and that many factors can contribute to a CEO’s dismissal. Here are some of the most common ones
Failing to Deliver on Performance Expectations
This is the most obvious and frequent reason why CEOs get fired. If a CEO cannot meet or exceed the performance expectations of the board, the shareholders, the customers, or the employees, they will lose their credibility and legitimacy. Performance expectations can vary depending on the industry, the market, the company, and the stakeholders, but they usually include indicators such as revenue, profit, market share, customer satisfaction, innovation, growth, and social impact. A CEO who cannot deliver on these indicators may face criticism, scrutiny, and pressure from the stakeholders, and may ultimately be replaced by someone who can.
Having a Poor Relationship with the Board
The board of directors is the ultimate authority that hires and fires the CEO, and they expect the CEO to align with their vision, strategy, and goals. The board also provides oversight, guidance, and support to the CEO, and holds them accountable for their actions and results. Therefore, having a strong and healthy relationship with the board is crucial for a CEO’s success and survival. However, many CEOs struggle to maintain a good relationship with the board, either because they have different opinions, values, or agendas, or because they fail to communicate, collaborate, or respect them. This can create tension, conflict, and mistrust between the CEO and the board, and can undermine the CEO’s authority and effectiveness.
Lacking the Necessary Skills and Competencies
A CEO needs to have a diverse and dynamic set of skills and competencies to lead a complex and changing organization. These skills and competencies include strategic thinking, decision-making, communication, collaboration, innovation, adaptability, and emotional intelligence. A CEO who lacks one or more of these skills and competencies may find it difficult to cope with the challenges and opportunities of the business environment and may fail to inspire and motivate their team. A CEO who does not recognize their skill gaps, or does not seek to improve them, may risk losing their credibility and competence.
Alienating the Management Team and the Employees
A CEO cannot run a company alone. They need to rely on a strong and loyal management team and a motivated and productive workforce. A CEO who alienates their management team and their employees, either by micromanaging, ignoring, or disrespecting them, may create a toxic and dysfunctional culture. This can lead to a loss of talent, morale, and productivity, which can affect the company’s performance and reputation.
Getting Involved in a Scandal or a Crisis
A CEO is the face and the voice of the company, and they are expected to uphold the highest standards of ethics, integrity, and professionalism. A CEO who gets involved in a scandal or a crisis, such as fraud, corruption, harassment, discrimination, or environmental damage, may tarnish the company’s image and reputation and may face legal and regulatory consequences. A scandal or a crisis can also erode the trust and confidence of the stakeholders and may force the board to take action to protect the company’s interests.
The Best Practices That Can Help You Succeed and Thrive as a CEO
While there is no guarantee that a CEO can avoid getting fired, there are some best practices that can help them reduce the risk and increase their chances of success. Here are some of them:
Be Aware of the Possibility of Getting Fired
The first step to avoid getting fired is to be aware of the possibility of getting fired. A CEO who is overconfident, arrogant, or complacent may overlook their weaknesses, mistakes, or threats, and may fail to adapt to the changing circumstances. A CEO who is humble, realistic, and self-aware may be more open to feedback, learning, and improvement, and may be more prepared to face the challenges and opportunities.
Grow the Business and Create Value
The ultimate goal of a CEO is to grow the business and create value for the stakeholders. A CEO who can achieve this goal may earn the respect and support of the board, the shareholders, the customers, and the employees. A CEO who can grow the business and create value may do so by:
- Developing and executing a clear and compelling vision and strategy that sets the direction and the priorities of the company
- Fostering a culture of innovation and excellence that encourages creativity, experimentation, and learning
- Investing in the development and retention of talent that can execute the vision and strategy
- Expanding into new markets and segments that offer growth potential and competitive advantage
- Creating and maintaining a loyal and satisfied customer base that generates revenue and referrals
- Building and leveraging strategic partnerships and alliances that enhance the company’s capabilities and reach
- Adopting and implementing best practices and technologies that improve the company’s efficiency and effectiveness
Invest in Your Team and Your People
A CEO is only as good as their team and their people. A CEO who invests in their team and their people may do so by:
- Communicating and collaborating effectively and transparently with the board, the management team, and the employees, and keeping them informed, involved, and aligned
- Empowering and delegating responsibilities and authority to the management team and the employees, and trusting them to make decisions and take actions
- Recognizing and rewarding achievements and contributions of the management team and the employees, and celebrating successes and milestones
- Providing and seeking constructive feedback and coaching to the management team and the employees, and helping them improve and grow
- Encouraging and supporting the learning and growth of the management team and the employees, and providing and facilitating mentoring and training opportunities
- Resolving and preventing conflicts and issues among the management team and the employees, and creating and sustaining a positive and productive work environment
Develop New Leaders and Plan for Succession
A CEO is responsible for the succession and continuity of the company. A CEO who develops new leaders and plans for succession may do so by:
- Identifying and nurturing high-potential and high-performing employees who can become future leaders of the company
- Providing and facilitating mentoring and training opportunities for potential leaders, and exposing and involving them in strategic and operational decisions and projects
- Challenging and stretching the potential leaders beyond their comfort zone, and giving them feedback and support
- Supporting and sponsoring potential leaders for advancement and promotion, and creating and maintaining a diverse and inclusive leadership pipeline
- Preparing and communicating a succession plan that ensures a smooth and seamless transition of leadership in case of departure, retirement, or emergency
Attract and Retain New Customers
A CEO is accountable for the customer experience and satisfaction. A CEO who attracts and retains new customers may do so by:
- Understanding and anticipating the needs and preferences of the target market, and conducting market research and analysis
- Developing and delivering value propositions and solutions that meet or exceed customer expectations, and solving customer problems and pain points
- Marketing and promoting the company’s brand, products, and services effectively and efficiently, and creating awareness and interest among potential customers
- Engaging and interacting with customers through various channels and platforms, and building and maintaining relationships and trust
- Soliciting and acting on customer feedback and insights, and improving and enhancing the customer experience and satisfaction
- Retaining and expanding existing customer relationships and loyalty, and generating and converting leads and referrals
Create and Maintain Strategic Partnerships and Alliances
A CEO is instrumental in creating and maintaining strategic partnerships and alliances that can benefit the company. A CEO who creates and maintains strategic partnerships and alliances may do so by:
- Identifying and evaluating potential partners and opportunities that are aligned with the company’s vision, strategy, and goals, and that offer complementary or synergistic value
- Negotiating and establishing mutually beneficial and long-term agreements and contracts with the partners, and defining the roles, responsibilities, and expectations of each party
- Coordinating and collaborating with the partners on joint projects and initiatives, and leveraging and sharing resources, capabilities, and expertise
- Monitoring and measuring the performance and outcomes of the partnerships and alliances, and ensuring that they deliver on the agreed objectives and value
- Resolving and preventing any conflicts or issues that may arise with the partners, and maintaining a positive and respectful relationship
Build and Sustain Alliances with Various Stakeholders
A CEO is influential in building and sustaining alliances with various stakeholders, such as investors, regulators, media, competitors, and the community. A CEO who builds and sustains alliances with various stakeholders may do so by:
- Building and sustaining trust and credibility with the stakeholders, and demonstrating the company’s values, mission, and vision
- Communicating and reporting the company’s vision, strategy, performance, and impact to the stakeholders, and keeping them informed
- Engaging and involving the stakeholders in the company’s activities and decisions, and seeking and incorporating their input and feedback
- Addressing and resolving any concerns or complaints that may arise with the stakeholders, and maintaining a positive and respectful relationship
- Supporting and contributing to the stakeholders’ interests and causes, and demonstrating the company’s social and environmental responsibility
How to Lead Your Company to Greatness as a CEO
Being a CEO is a privilege and a challenge that demands a lot of skills, knowledge, experience, and leadership. It also exposes you to a lot of risks, pressures, and responsibilities that can endanger your career.
However, by being aware of the common pitfalls that can lead to your downfall, and by following the best practices that can help you succeed and thrive, you can increase your chances of staying on top and leading your company to greatness.
As a CEO, you are not only the leader of your company, but also the leader of yourself. You have the power and the potential to make a difference, not only for your company, but also for yourself, your team, your customers, your partners, your stakeholders, and your community. So, don’t let arrogance, complacency, or fear stop you from pursuing your vision and achieving your goals. Instead, embrace humility, realism, self-awareness, openness, adaptability, innovation, collaboration, communication, respect, ethics, professionalism, responsibility, and vision. And most importantly, be yourself. You are a CEO, and you can do it.
If you want to learn more about how to be a successful CEO, I recommend you to read the following books:
- The CEO Next Door: The 4 Behaviors That Transform Ordinary People into World-Class Leaders by Elena L. Botelho, Kim R. Powell, and Tahl Raz
- The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter by Michael D. Watkins
- Good to Great: Why Some Companies Make the Leap and Others Don’t by Jim Collins
- The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey
- The 21 Irrefutable Laws of Leadership: Follow Them and People Will Follow You by John C. Maxwell
These books will provide you with valuable insights, tips, and strategies on how to lead your company and yourself to greatness. I wish you all the best in your journey as a CEO.
Thank
you for reading.
Best,
Nexa-Hub
