12 CEO Diseases & How to Treat Them

Great one for all to read...from CEO Network. See source below.

"Some of the “diseases” that CEOs catch may seem minor; these can be the virulent ones that morph stealthily into major corporate illnesses. Following are some CEO diseases and my prescriptions for treating them.

Talking Too Much. You never learn by talking, but some CEOs imagine the world to be in desperate need of their constant wisdom. It is a rare subordinate who will risk stifling a CEO.

My Prescription: Track the percentage of time you speak compared to that of your subordinates. Yours should be a lot less. If you want to give a speech, call it that. Otherwise, control yourself; to be blunt, shut up.

Goals Too Aggressive. Unrealistic goals “demotivate,” especially when compensation is involved. One CEO expected his plastics company to continue its 30 percent annual growth rate, not appreciating that with a larger base and a mature market their era of high growth had to end; the result discouraged managers.

My Prescription: Set goals that have, say, a 35 to 45 percent likelihood of success. (Assume all works well but not extraordinarily well.) Goals should make your executives reach, but not too high.

Power Building Trumps Wealth Building. CEOs tend to make decisions that enhance their scope and influence, even at the expense of increasing shareholder value—and this can be paradoxically true even when the CEO is a large shareholder. Sometimes, for effect, I put it this way: “I want a CEO whose greed exceeds his ego.” Sure, greed and ego are both unpleasant traits that are impolite to laud in public, but by privileging greed over ego I make the point that good CEOs should be motivated more by amassing wealth for their shareholders than by accreting empires for themselves.

My Prescription: Take this psychological test. When making a big decision, ask yourself how it will build the market value of your firm. Then, immediately, shift the introspective question to how the decision will increase your personal power. It is the speed of your answer, not its substance, that I’m assessing here. If the speed of your internal answer to the second question, stressing personal power, exceeds that of your answer to the first question, stressing firm value, your ego may be exceeding your greed, and this should be a cause for concern.

Not Respecting or Recognizing the Ideas of Others. In general, CEOs are egotistical. Highly successful almost by definition, many CEOs would seem to have every right to be self-impressed. However, when you hold the top spot, puffing yourself up at the expense of subordinates pollutes the organization. You benefit when your people are encouraged and empowered to generate novel ideas.

My Prescription: Do the opposite of what comes naturally. In a situation where a good idea was really or largely your own, go out of your way to give credit to others.

Seeing Only Summaries. A CEO should perceive the world as it truly is; if cluttered and chaotic, so be it. When information is always “high level,” predigested by staffers, a CEO may be perceiving an artificial world, a virtual reality as it were, of cleanly manicured lawns. Most CEOs have great instincts about their businesses, and such instincts should be nourished by raw data, like, for example, call reports of customers.

My Prescription: You know the critical success factors of your business. Demand unsimplified information for these factors. And get it randomly so that your staff never knows where or when you will require raw data.

Don’t Fall in Love. Your social life is your own affair, but when you sit in the corner office, follow your head not your heart. Every business must have a strategic or financial purpose, and if a business happens to make you feel good that’s fine as long as your emotional attachment doesn’t interfere with your rational decision-making. CEOs are particularly vulnerable when making acquisitions —who knows why Ford bought Aston-Martin?

My Prescription: Engage the executive most likely to call your favorite business babies “ugly.” You don’t have to agree, but you do have to listen. Also, when an executive challenges your favorite projects, praise her.

Feeling Invincible: CEOs to be CEOs must have superb track records—some are almost unblemished —so they have a proclivity to imagine themselves as invulnerable. The natural corollary is a robust confidence, even if subconscious, that past success assures future success. I can’t tell you how many dozens of CEOs I’ve seen who refused to sell their companies at what would turn out to be, in hindsight, their peak market values, simply because they were convinced that tomorrow’s prospects would mimic yesterday’s triumphs. Looking backward and looking forward, a humble, healthy respect for the subtleties of serendipity is the beginning of wisdom. As the Proverbs say: “When pride cometh, then cometh shame” (11:2): “Pride goeth before destruction, and an haughty spirit before a fall“ (16:18).

My Prescription: Even the best CEOs are lucky, and although I agree with the adage that “the smarter you are the luckier you get,” the relationship is far from perfect. A sobering exercise is to analyze your career, looking for “luck.” Also, don’t believe your own hype.

Personnel Too Similar. In some organizations, many of the senior executives look like the CEO. I mean this quite literally and it can be very funny. Not just obvious characteristics like gender and race, but also personal traits like size and stature, political philosophy, sporting interests, demeanor, even style of dress. In a globalized world where customers and suppliers may be very different kinds of people, it is not wise for the executives of a company to be homogenous, and hence, uniform in their thinking.

My Prescription: Look at your key external relationships; target those who are markedly different from you, and ask yourself whether any of your top executives are like them. If not, hire some.

Generalizations. CEOs like to spot trends, spot trends, finding deep principles to predict and affect business. But beware of averages, which can deceive. For example, assume that, in a pharmaceutical company, prices are declining for one-half of the drugs and increasing for the other half; the fact that the average price of all drugs has remained steady is worse than meaningless information. Strategies for drugs that kept prices steady might not work at all with those whose prices were decreasing or increasing.

My Prescription: Recognize that as the world has become progressively more narrowcasted in demand and supply, the power of generalization has become progressively more suspect.

Not Asking the “Stupid” Question. You learn by asking. If you don’t understand something, you can’t make a proper decision. CEOs are not known for sporting small self-images, but if these top-floor egos are so fragile that they can never appear uninformed, CEOs will suffer strategic disadvantages. It is astounding how many “dumb” questions, well timed, might have prevented poor decisions.

My Prescription: Go out of your way to ask stupid, dumb questions—even when you don’t need to—just to get your ego conditioned to how it feels. In this way, when you really need to ask that key question, your ego won’t immobilize your tongue.

Falling for Current Trends.It’s easy to be sucked into the vortex of current trends, whether macroscopic movements or management theories. Think Time Warner purchasing AOL at the height of the dot.com boom and destroying most of the acquirer’s value.

My Prescription: Ask yourself whether you really believe the current trend or whether you are feeling socially coerced? Your instincts are often a better strategic guide than the hot stories in the latest business magazines.

Falling for Contemporary Tricks. Every few years, it seems, there is some new fad with which CEOs must contend. In the 1960s, conglomerates grew by accretive acquisitions, seeking earnings per share growth and cyclical balance. In the 1980s, highly leveraged financings were the rage. And in virtually every decade, specious tax shelters and spurious tax gimmicks always pop up (e.g., trying to postpone huge capital gains taxes through tortuous and ultimately disallowed techniques).

My Prescription: Most CEOs should be wary of cutting-edge finance and simply stay away from tax dodges. Playing near the foul line isn’t worth it. How to diagnose your own CEO diseases? You will have to be your own doctor since I do not make house calls."

Source: CEO Network
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