The ‘CEO Effect’: 4 lessons from the top

The performance of many of the world’s most successful companies depends on the decisions taken by their leadership. This is what’s known as the ‘CEO Effect.’?

But what makes the best CEOs stand out from the rest? How do they think differently? How do they understand, anticipate and answer the needs of all stakeholders??

McKinsey & Co.’s latest, ‘CEO Excellence: The Six Mindsets that Distinguish the Best Leaders from the Rest’, sets out to answer this question.?

While I’m grateful for the opportunity to contribute my thoughts to this book, I’m even more grateful to learn from other top leaders through it.?

Here’s some of what I learned:?

Lesson 1: Build strength throughout the organisation

I have always believed that a good CEO makes himself redundant. This is echoed by other leaders throughout the book, particularly Netflix’s Reed Hastings.?

To achieve this, every department, vertical and employee must be empowered. It does not, however, mean that the CEO steps back completely and does nothing: instead, she or he must be like the conductor of an orchestra.?

Lesson 2: Don’t be afraid to make radical changes

For a company to evolve, its leadership needs to be willing to make the necessary changes, no matter how radical they seem. Adidas’s Kasper R?rsted says every crisis gives leaders the opportunity to change direction and do what’s necessary to keep the company moving forward.?

We have seen this in the way successful companies pivoted post pandemic: Leveraging digital opportunities, reshoring supply chains, streamlining operations, going remote where necessary, and so on.

Lesson 3: Always focus on the solution with optimism

Companies will weather many challenges, some external, others internal – that is a fact. During such times, it is up to the CEO as the captain of the ship to steer the organisation towards finding and implementing a solution.?

For Ken Chenault, the ex-CEO of American Express, a business leader must take it upon her- or himself to ‘define reality’ with honesty and transparency. At the same time, the CEO must remain positive and optimistic – their mood will affect the rest of the organisation.?

Lesson 4: Strike the right balance

The best business leaders are masters of balance. They evaluate the past and prepare for the future; they focus on the bigger picture and keep an eye on the minutiae; they know when to speed up and when to slow down, when to get close to the action and when to step back.?

As Microsoft’s Satya Nadella puts it, knowing what tempo to set for changes across the organisation is crucial, as is recognising that there are some things that require long-term, patient thinking and planning, whereas others could benefit from taking quicker calls.

As we prepare for the next wave of disruptions, current and aspiring leaders would do well to keep these lessons – and others from the book – in mind.?

If you’ve read ‘CEO Excellence,’ what piece(s) of advice did you like best???