CEO Excellence

A remarkable reading from this book published by 麦肯锡 into the mindsets of some of the top Fortune 500 CEOs compiled and categorized with interviews into themes to provide insights for current and future CEOs into managing role complexity, behaviors and situational leadership.

While it’s very hard to summarize 350 pages filled with top CEO experiences, I am going to list some key takeaways that struck a chord with me!

My Key takeaways:

Bold Direction:

A reimagined business vision defining the purpose of the firm’s existence centered around creating differentiated customer experiences. Interestingly enough revenue always eventually followed that flow even though initially, at times, it didn’t seem like it. While incremental adjustments may provide some short term gains, it’s really bold visions that provide sustainable long term gains.

M&A Strategy:

Criteria to look at a Target in the following order - Should be in an emerging market space, Able to add value, and finally, the deal math needs to make sense (There is a reason why common valuation is in multiples of EBITDA!). The best CEOs execute on average, atleast one deal per year which can contribute over 30% of Market Cap over a decade (Buying & Selling).

Resource Allocation:

Reallocation of resources to support new strategy/vision without negatively impacting the current service levels is one of the most difficult tasks - long term vs short term impacts have to be balanced. Allocation by starting with a zero base, solving for a unified or collective organization, management by milestones (not budgets), and stopping as much as we create (Ex: Rationalization of all customer segments being served with measurements on cost to serve against LTV and shaving off the bottom)

Organization Design & Talent:

Organization design needs to closely follow the conceived strategy which will lead to new roles and structure which is better suited to the new vision. We will then need to look at the existing leadership team and assess their skills to see who can fit into the new roles (some or many may not qualify - This is tough but necessary considering the risks!).? ? ? ? ? ? ? ? ? ? ? ? An interesting concept I have also applied at several firms successfully to strengthen delivery capabilities is the Helix model (2 solid reporting lines - Capability & Value Stream management) instead of the Matrix model (1 dotted and 1 solid - creates confusion between resource ownership between functional and business alignment).

Operating Rhythm:

This is my most critical and, thereby, a passionate topic. The first aspect is the Business outcome metrics - leading and lagging indicators defined during vision/strategy have to make all the way through the ground-level activities which help teams (even those globally dispersed) to have the same view on progress. Then the operating processes of the entire organization need to be structured towards supporting those metrics (fine-tuned as needed over time). This will eliminate the noise and distraction on different data points provided and promoted by different parts of the organization. The best CEOs play the role of a conductor in an Orchestra helping the teams deliver beautiful music!

Board Engagement:

Transparency and Trust are key in the quarterly board engagements using it as a platform to not only share information about the firm but also to seek guidance on several complex issues experienced both internally and externally. Their experience and network can help find the right tools and resources to solve them. Building individual relationships with board members can also be very fruitful where they can provide more detailed feedback. A key aspect is also creating avenues for the management team to get exposure to the board - Helps them build confidence and reinforce their ownership areas.

Stakeholder Engagement:

Stakeholders can include suppliers, regulators, communities, media, trade groups, etc which all need to be managed while ensuring the internal workings for the firm are in order and progressing on realizing the new vision. Top CEOs engage a defined role “Chief of Staff” to help them with running transformation efforts in the firm while they focus on external interactions.?

Personal Effectiveness:

A key to being effective as a CEO largely depends on how they are taking care of themselves - Competing priorities, time and energy (focusing on taking time off at regular intervals and preserving energy through the work day) , leadership model ( promoting accountability, continuous learning, empathy, servant leadership). An interesting construct is to have an informal group of professionals in the network to connect with regularly and bounce ideas confidentially. This can help get different perspectives without situational bias.

Would love to hear your experiences on these themes driving leadership excellence!

Sid Nandi is an Entrepreneur, Operating Partner, Business transformation leader, Coach, Technology strategy & management consultant experienced in M&A tech diligence, advisory and value creation. His previous startup on Digital Transformations generated 30X return on exit after 4 years! He takes on interim/fractional/fulltime CxO and advisory roles to drive portfolio acquisitions, strategy, and growth to exit.

His current venture (Traforma Consulting ) provides M&A Diligence, Tech Advisory, Post-close Value Creation towards exit for mid-market Private Equity firms. He is passionate about connecting and collaborating with Investment principals and Operating Partners in the PE world!.