Tensions and Tradeoffs-What Defines Effective Leadership

“Every great achievement is but a small peak in the mountain range of contributions” - Dale Mortensen

Two current circumstances that boards and leaders are facing:

**CEO selection and leadership depth is an increasingly important board governance priority as boards seek to improve the odds of significantly enhancing enterprise value via strategic performance-driven “leadership capital”…carefully recruited, deployed and evaluated.

**CEO turnover (another aspect in the era of great resignations) is at an all-time high. As CEOs and their teams turnover, identifying and appointing the best qualified leaders who will align priorities in the “new,” remains increasingly challenging, especially in our turbulent times.

Our Observations and Learnings

Historically, many Boards haven’t prioritized succession as a regular and ongoing element of board governance and most, therefore, aren't prepared for today’s nuanced talent challenges and how they fully align to outcomes. When asked why it hasn't been a top board agenda item, the principal reason cited by directors is that it’s difficult and perhaps, unfair to evaluate CEOs and leadership when conditions require continual adaptability. Additionally, we’ve observed that directors are reluctant, fearing the impact and the risk of a failure in judgment. The counter argument is that not being engaged and carefully proactive when leaders aren’t delivering, is far riskier.

How best, given current circumstances, can boards identify CEOs and their executive teams...leaders who possess the skill, courage, intellect and societal awareness to deliver performance with societal awareness…to enhance enterprise value?

In working with numerous boards over many years, we believe that there is a changing calculus of how boards are selecting CEOs (and their executives) and why… and how they are defining and benchmarking “success.” While financial results remain paramount, to move the needle now, leaders must have heightened “sensitivities… a will to address and engage on broader stakeholder interests… that are, and will, impact achieving desired outcomes.

Increasingly, though, boards are under pressure to become more engaged to seek different types of leaders...listening-oriented resilient CEOs and executives who will drive competitive standing by continually investing surgically and strategically in human capital...recruiting, identifying and developing leaders with the qualities and capabilities...tangible and intangibles...who are undaunted in addressing the curveballs of the next and new...swans and all.

Simply, boards, in selecting leaders, have come to realize it isn’t enough, in times of uncertainty, to simply seek out those leaders with matching experience. Today, that’s just table stakes.

Today’s Leadership Alchemy

Our clients recognize that CEOs who select their team carefully, and utilize its full power, have the best odds of accelerating enterprise value. This translates to selecting leaders, who believe in “team play” and demonstrate inclusiveness, emphasizing high collaboration coupled with clear and concise communication...full transparency.

Willingly, our clients are “passing” on executives who exhibit the need to be always right, be in full charge and/or who take “credit” over contribution of their teams even if these candidates are qualified on all other dimensions. Further, they realize that selecting such individuals is a prescription for a likely ‘train wreck” and probably lower returns. And, moreover, other than in severe turnarounds, in our view, this non-inclusive style has no place in today’s executive decision culture.

The Bottom Line

Leading now is complex with many tensions requiring difficult decisional tradeoffs. Companies led by culturally responsible leaders appreciate that they aren’t “The Yoda.” These leaders, while self-reflective, advance value by listening carefully, by asking questions and establishing and supporting methodologies and platforms that respect, inspire and challenge their teams.

They ask:

1-Have we explored all our reasonable options of moving forward (including innovative and those “out of the box”) and agree on which make the most sense?

2-In evaluating our options, which are the most promising to create wins and scale?

3-If we select the best alternative and align to win, what benchmarks/measurements will tell us whether it was worth the effort and resources?

In executive selection, don’t comprise and get caught solely by becoming enamored with a candidate’s experience or their dazzling personality.

Evaluate fully the inclusive factors and leadership behaviors that truly drive sustainable performance. Recruit/appoint leaders who recognize the power of collaboration and encourage team-oriented decisions...a principal determinant of gaining upside...especially critical now when the future is foggy and the pressure to perform has never been greater.

The Koblentz Group, a National Leadership Advisory Firm Trusted to Successfully Recruit Courageous Leaders