CEO Challenge: Balancing Five "Dilemmas"

In a recent McKinsey article “The loneliest job? How top CEOs manage dilemmas and vulnerability” (link), the authors consolidated the insights of 100 CEOs who have gone through their leadership program into five “dilemmas” that CEOs had challenges balancing and prioritizing. Somewhat paraphrased, here they are:

1. Preserving the core capabilities ?? innovating for the future

2. Delivering short-term ?? investing in the long-term

3. Enabling individual stars ?? optimizing a team of stars

4. Empowering team decision-making ?? making all the decisions yourself

5. “Immersing” themselves in the CEO role ?? retaining personal identity and work-life balance

I'll let the article speak for itself. There were statements of the obvious, some points were less applicable to our focus, and one was downright startling, which I talk about below. Here are my suggestions for dealing with each of them:

Preserving the core capabilities versus innovating for the future.

The reality is that there is no either-or here; it’s more of a continuum. Many scholars of executive management will tell you that if you are not growing, you’re essentially dead. Even if you have a venerable family business which, as noted in the article, you are hesitant to mess with, no company can keep doing the same thing forever. It is how you approach the risk. Since we don’t live in a vacuum, there will be competitive forces at play that require one to act. It’s how we act and when that will matter. Do you wait for change or create it to control it?

Ideally, there should be innovation that helps retain the company’s core value and innovation that is disruptive. The enabling innovation allows the core functions to stay healthy and competitive, think business process automation for instance. Disruptive innovation opens the door to building upon your core strengths in new ways or creating a new strength, but that can be tricky.

Where leaders get into problems in innovating for the future is in making the wrong strategic decision. We see it in the expansion of a company’s pipeline, M&A, or extensions of core businesses. It is what many large companies pay high-powered consultants like McKinsey the big bucks to help them with. The balancing act is how far you can reach out without being beyond your skis.

There are two elements of leadership at play here: strategy and innovation. A change in strategy should be responsive but infrequent as it is the road map for your team. It must be mindful, deliberate, and consistent with vision and company purpose as it represents the reality for both. If a new strategic course of action requires you to modify the company’s vision, then be sure it is clear to you and your board what it means for the future. Will it be worth it and for how long? If it goes against your company’s purpose, i.e. core values, then walk away from that rabbit hole. Core values should not change, if they do, you will no longer have the same company. Is that your intention? And if it goes against your self-purpose, realize you are talking yourself out of being a good fit for the job (more on that below).

Ideally, innovation is happening in enabling (non-disruptive) ways throughout the company so that core capabilities stay current. At the same time, any big steps forward should align with purpose, vision, and strategy. This does not mean that leadership should not respond to changing conditions or new opportunities created by disruptive innovation. Rather, it means that there should always be alignment. If you need to rethink your company vision and strategy because of the rise of generative AI for example, or new competitive intelligence forces you to change, you have the best chance of staying upright while keeping one foot in the old and one in the new if you are still playing to a core strength and both feet are rooted in a cohesive vision and strategy.

Delivering short-term versus investing in the long-term

There is no CEO worth more than two cents who does not worry about the short term while thinking about the long term. However, the CEO is responsible for keeping an eye on long-term impact. This does not mean there won’t be pressure to be consumed by the short term. It will be a matter of prioritizing your energy and attention. Being able to prioritize even the smallest decision based on its relationship to the long-term vision is one of three essential grounding principles for successful life science leadership.

A stable vision will make balancing investments easier. When management caves too much to the short-term, the company will ultimately lose the strength to stay in play. Luckily, you have capable subordinates at multiple levels who can be agile, strong leaders handling shorter-term issues on a monthly, quarterly, and even yearly basis. Let them be concerned with the specifics of how the company will act to stay in play while you ensure that there are no action compromises or detracts from the company achieving its long-term vision, always asking yourself, “What does [an action/decision] mean for us in the long run?”

The higher one goes in the organization, the more answering this question will be necessary to ensure the wisest decisions. There may be shorter-term and longer-term investments of time and money that you’ll have to justify with investors. If both are consistent with the long-term vision, then understanding your decisions in how you are fitting it all together becomes clearer and more readily communicated. If there is a misfit, stakeholders may sense that you are reactionary and they in turn will be reactionary and less patient.

For example, say you have a clinical product on the market understandably corralling investor interest around market penetration and product revenue. You invest in getting that product wisely placed in the market. However, there is another clinical product in positive Phase II trials that you want to speed through Phase III trials. Some might feel that you should invest more in market expansion but you know more money won’t make that happen on a meaningful level or timeline for those investors. You also want to avoid any missteps with regulators, clinicians, and patients; you’re thinking longer term.

The leader most able to connect the two clinical objectives in a way that focuses on the longer-term vision of how you increase the company value will be better able to balance both priorities with less impunity. Flexing your leadership by explaining to investors why it should not be an either-or scenario nor do A first and then we’ll worry about B later option but about achieving the most valuable balance will help build trust in your decisions as the leader. If investors remain only interested in the short-term stock play from first product revenue, then you don’t want them as investors so don’t placate them. The goal of the CEO is to grow the company’s value and thus shareholder value but the shareholders have to take responsibility in how they participate. Again, vision and purpose benefit from alignment and you provide that guidance.

Enabling individual stars versus optimizing a team of stars

The article contained some comments that were disturbing to me. One of them was the idea that a challenge will be managing “toxic superstars” or ‘mercenaries’ with certain desirable skill sets but who do not share company values yet have the full support of the CEO. There may even be a different compensation structure for them. It provoked a visceral response and those who know me well know why!

If you’ve worked long enough, you’ve probably experienced such a person (often hired unwittingly but not always.) In my view, there is NEVER a reason to tolerate a person who is not in alignment with company values. There is no reason one should expend energy integrating them into a team; they are poisonous.

A star salesperson without ethics is simply an unethical person (and I know at least three companies that got into legal trouble like this). A greedy business strategy guru is just a greedy person who ultimately considers your company something to step on and over for personal gain. There are better people out there so take the time to identify them as best you can. If you find you’ve hired a ‘mercenary’ in error, show them the door ASAP, give yourself two slaps on the wrist, debrief with HR to identify red flags, and promise yourself you’ll ask better questions regarding self-purpose and motivation in the next interview.

Now to leading the good people…In a science or technology-based company having to balance this is a given. But is it finding a balance? Peter Drucker famously taught that we cannot assume that knowledge workers automatically understand what they should be doing for your company even though they and we might think they do. Often your stars provide the know-how and ways to accomplish the objectives while the leader contributes the nuance that will determine the final value of the collective effort. You enable your stars with that nuance and congruity with what other stars are doing.

Communication of what everyone is contributing and how is the leader’s responsibility. You inspire and direct motivation with the vision and bring clarity to the goals through the strategy.

You are building a mutual appreciation society, not a see what I can do showcase.

If you are having difficulty integrating one of your stars give this a try. Start by getting the person to tell you why they are uncomfortable or uninterested in the team. It allows you to connect the dots with them by sharing your view of the collective value of what they and others are doing. If they are sincere in creating an impact then this understanding will help them become more comfortable with and interested in the team effort.

Empowering team decision-making versus making all the decisions yourself

I don’t care who we are, I can safely say that in science and technology businesses no individual is knowledgeable enough to make all the right decisions solely on their own. There are just too many moving parts. Sure, your decision will be the final one when it comes to big decisions but there will be hundreds of decisions made each day that contribute to the whole, now and in the future. Our goal as leaders is for our collective decisions to be the wisest possible as often as possible. This requires empowering decision-making within the team. It is one of the earliest lessons to be learned for emerging leaders and from this study, it looks like the challenge never goes away. People must build “muscle” memory from practice. Being fit for the task isn’t immediate without substantial expertise and thorough knowledge of the objectives. Also, in a start-up doing something for the first time, there is a lot that will be new for everyone. Expertise helps so be sure it exists within the team. However, making your way in new territory will benefit from what leadership scholars call small wins no matter who it is. Great leaders know they’ll need wise decision-making from everyone every day and foster it freeing them to tackle the pivotal big-picture decisions that require careful consideration of the long-term impact.

“Immersing” themselves in the CEO role versus retaining personal identity and work-life balance

All students of leadership know that maintaining authenticity is vital for building trust. You may be known as a supportive friend, a loving spouse, an attentive parent, and an empathetic boss only to be swallowed whole by the job where you sense you are changing in unwanted ways. In this case, the first place to look for relief is in strengthening your self-leadership skills.

The stronger your self-leadership is, the more likely you’ll be able to sustain a high level of performance without undue personal compromise. To be comfortable on the job, we must first have alignment of company purpose with self-purpose and our core values. If those are misaligned, we are in the wrong job. To identify this, you must have strong self-awareness; of how you are perceived, what you want, how you learn best, how you communicate, etc. Strong self-leadership contributes to resilience, courageousness and comfort in remaining authentic. You’ll be less likely to be swallowed up by the job. Then you can look outward to other leadership skills that will help to create joy in what you do on the job for yourself and others.

If you are not happy it is a red flag; you must determine why and fix it because only you can. Your company needs you in a way that works for both. That requires you to be resilient, take care of your health, and enjoy your life. Resilience is something that will often be required of a CEO. The joyful elements within work and home will feed that resilience in you and the team. Finding joy for yourself and others is helped by working on your leadership skills. And circling back to where we began, it means you should expect a need to update your leadership approach and/or embrace additional skills as circumstances change.

I’ll leave you with an anecdote about the benefits of having fun on the job.

When I was a postdoc my quiet, reserved advisor was concerned because the noise level of our lab went up significantly from our laughter. At first, he thought we were not taking things seriously. On the contrary, our laughter indicated that we enjoyed each other’s company, looked forward to spending time in the lab, and cared about the success of the lab and each other. The lab accomplished several things we are still proud to have been a part of.

If you question how well you are handling the pressure to “immerse” yourself in the job, ask yourself why you feel the need, is there something that can be strengthened within yourself to make things easier? Is there a leadership skill such as how to more effectively communicate your vision to a larger workforce that might help? Also, step beyond yourself and observe the job environment. Do you hear any laughter? If not, find or even create a reason to laugh and see what that does!

If you are a CEO or plan to be in the future, you’ll inevitably face similar challenges and more. If you want to be the leader who can steer through choppy waters with the skill and fortitude of Russel Crowe in “Master and Commander” and happily reach your faraway shores, I might be able to help you.

Don’t miss my LinkedIn Live audio event on September 11th!

"CXOs: Become the C-suite Leader Everyone Wants on Their Team!"

https://www.dhirubhai.net/events/cxos-becomethec-suiteleaderever7226551103687979009/