The trap that lurks successful leaders

If you're a CEO, you're getting results, success and you're exactly where you hoped to be, congratulations. You are about to face your toughest challenge yet: complacency. In other words, becoming a successful CEO is hard, but staying successful is even harder.

The problem with being a successful CEO

Research confirms this challenge: more than half of the Fortune 500 companies in the year 2000 went bankrupt, were acquired, or ceased to exist in the next 15 years. This middle period of the CEO's tenure, when the focus and energy invested in achieving the goals in the early years has paid off, is the most difficult. Rationally, the danger of such complacency is a simple concept to understand.

The reason this happens may be more emotional than rational. At some point, as the CEO, you are the author of the organization's status quo. This makes it much more difficult to objectively evaluate the business and change what is working.

Also, with success comes an increased confidence in one's own judgment. “The problem with being a CEO for a long time,” says James Gorman, CEO of Morgan Stanley, “is that everyone tells you that you have all the answers. It's comforting to your ego, but very dangerous to your results."

In the CEO role, the dynamic is as much about the organization as it is about you. As time went on, the employees got used to working in the new ways you established with the management team. If you don't continue to improve processes and be the main driver of change, the organization will become complacent.

So how do CEOs avoid complacency and maintain high performance? We don't have a magic formula, but we are confident that the odds increase significantly by improving the learning agenda, taking an outside perspective, defining the next stage of growth and future-proofing the organization.

Measures to avoid becoming a bottleneck for the company

Improve your learning agenda

As a CEO in your first years of leadership, you learned a lot. The conversations you had with customers, employees, consultants, board members helped you form the strategy that led to the success you enjoy today. You are now receiving requests to tell your story and share your wisdom with others. Although these demands are well deserved, dangers lurk beyond them. You can win prizes; you can receive praise. Which is good. But your main job is to do better every year than the year before.

The solution is not to withdraw from external commitments. It's about making sure you spend more time listening, learning and making connections instead of talking about your successes. Your early success should allow you to delegate more responsibilities to your team, which means spending more time outside of the company—but only for things that help the business stay competitive.

This involves attending business conferences, understanding competitors or interacting with opinion leaders. The information received is essential to strengthen the company's success on an agile basis, to have competitive sales people, and to bring new ideas for products and services

Adopt an outside perspective

"If you were given the role of CEO again, what would you do differently?". This is a hypothetical question that every CEO should ask themselves on a regular basis. Sure, you might feel uncomfortable pretending to be an outsider to your company. But the goal isn't to undermine what you've achieved; it's about questioning assumptions and seeing your opportunities with different eyes.

Another way a CEO can keep an outside perspective is to get feedback on how others perceive his leadership skills. It can come in the form of 360-degree feedback or through honest dialogues with your leadership team. You will gain valuable insights that help you become a more balanced leader.

Define the next stage of growth

From a practical standpoint, your first role as CEO was to outline your company's growth vision. Maybe you needed to lead the company to a return to growth. Or maybe you've been pursuing an aggressive expansion into a new field. Whatever the case, you've managed to drive the company along the "S-curve"—a classic growth pattern that starts slowly, accelerates quickly, then stabilizes as the value of the strategy is fully realized.

As the organization begins to thrive, you continue to push the boundaries, constantly defining new directions for growth to maintain momentum. This usually involves a mixture of exploring emerging markets, continuous innovation and adapting to technological and consumer changes. By actively involving the team in this process and constantly listening to feedback, you manage to keep the company on a long-term upward trajectory.

Secure the future of your organization

An essential aspect in avoiding complacency is preparing for inevitable crises. Even the best managed ones organizations face unforeseen challenges, and how these crises are managed can determine long-term success or failure.

Prepare your company to weather crises with regular risk assessments and what-if scenarios. Insist on regular testing of business continuity plans to ensure the organization can handle any major disruptions.

Emphasize the importance of continuous innovation and be proactive in identifying and addressing potential problems before they become major crises.

In conclusion

By improving the learning agenda, taking an outside perspective, defining the next period of growth and future-proofing the organization, CEOs can successfully manage the median of their tenure, avoiding the pitfalls of complacency and ensuring high performance over the long term.

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About PKF Finconta

For more than 29 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR, and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping, and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.? www.pkffinconta.ro

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