What Type is your CEO?

What Type is your CEO?

2016-17 has seen a massive flux of CEOs going into and out of organizations. Every time a CEO is hired to take on the reins of a company, the board, shareholders, consumers and society in general expect him or her to turn around the company or take it to new heights.

We have devised a very simple way to identify a CEO’s “Dominant Type” that can be a predictor of his or her success in a new leadership challenge. Let us see how in a short while! Before we begin, let us clarify two points. Firstly, to be truly successful, an organization must consistently generate sustained value - for itself and for everyone associated with it. Secondly, in case there was any confusion about this, a CEO has the full responsibility to steer BOTH the short-term performance and long-term direction and value of any organization and this responsibility clearly distinguishes him or her from the COO or Chairman.

CEOs often take one of two dominant approaches to generate value for their organizations: 1) Short-Term or 2) Short and Long-Term

A Short-Term CEO’s actions are often very clear. He or she focuses purely on sales, profits, costs, rationalizing investments and nothing else. On the other hand, a Short and Long-Term CEO will also give equal importance to Systems and Processes, Brands, Innovation, Market Expansion, Team Capability Development and so on.

Similarly, every Organization has an inherent DNA or approach to value-generation that exists even before a CEO arrives. This reflects in the principles of its Founder, Company Policies, approach towards it Employees, Strategies and Plans, the nature of its Reward and Recognition mechanisms and the firm's approach to Profit-Generation and delivering Share-Holder Value.

We will also classify an Organization's DNA towards Value-Generation into two categories: 1) Short-Term and 2) Short and Long-Term

Let us now easily combine these Value-Generation dimensions to identify your CEO’s Dominant Type.

Organization's DNA; CEO’s Approach; CEO’s Dominant Type

1. Short-Term; Short-Term; MYOPIC

2. Short & Long-Term; Short-Term; TRANSACTIONAL

3. Short-Term; Short & Long-Term; VISIONARY

4. Short & Long-Term; Short & Long-Term; PROTECTIVE

These four types define the CEO's leadership style and the approach they may adopt to lead your organization. Let me explain them to you briefly.

MYOPIC: This CEO knows that his or her business has been founded and run for short-term results and short-term profits only and does not want to change that in any way. This CEO has strong experience in delivering immediate results and has been professionally wired to always chose short-term outcomes over the future. They are very confident that they are doing the right thing for the company and often resist new-ideas or change for the better, even if their organization itself starts to look beyond, just because they don’t know otherwise. While they are CEO, their company’s market performance might fluctuate, however, they make hasty course-corrections to sort that out.

TRANSACTIONAL: A TRANSACTIONAL CEO fully knows that the future success of their company depends on a long-term purpose, differentiated products and services, policies and processes and mechanisms that can add value to shareholders, employees, consumers and society. They typically join an organization that has been focusing on CSR initiatives and has been investing in growth and people. However, due to short-term pressures, this CEO needs to deliver immediate performance so will focus on cost-cutting measures, eliminating structures and businesses that do not deliver today and eliminating anything that adds a burden to their P&L during this fiscal year. Often, this CEO is building a pool of future profits to plough them back into growth initiatives in years two and three. They are well-respected internally and in the stock market for their positive financial impact on the business performance, which is clearly visible.

VISIONARY: A VISIONARY CEO walks into an organization with a short-term DNA and wants to take the company to a whole new level. This CEO puts aside funds and steers initiatives for the long-term - innovation, company processes, branding and market expansion etc, while managing the short-term. They devise growth acceleration strategies and put the necessary teams in place that are required to make this happen. They are Change Agents, self-driven and persistent even in the face resistance from within. They do whatever is necessary to overcome challenges in finding resources and support and, with the support of a strong COO and willing Teams, can take organizations to a whole new level of existence and value-generation.

PROTECTIVE: While the name sounds ordinary, the job of a PROTECTIVE CEO is not trivial at all. They take up this role in an organization that is already very geared to driving strong P&L performance year on year and investing in future capabilities, both at the same time. They protect what exists and find the means to take their organizations further. While not necessarily visionary or a change-agent, this CEO is excellent at maintaining what is good and enabling and mobilizing teams to focus on tomorrow. They are excellent general managers and influencers and always make sure that their internal and external stakeholders see the value of their organization’s unique DNA.

So here is the verdict! Most CEOs have shades of each of these Four Types, however, operate as a "Dominate Type". A MYPOIC CEO could be an inappropriate choice for an organization that wants to grow rapidly. A TRANSACTIONAL CEO can turn-around short-term performance. A VISIONARY CEO could transform a firm’s approach to business and take it a whole new level in stiff competition and a PROTECTIVE CEO could be just what you need to continue with your sustainable approach to value-generation. When taking the decision to hire a new CEO, the Board needs to judge it's organization’s DNA, assess the stage of business transformation it is in and then decide on the type of CEO who most matches the company's current and future requirements as this decision can have a massive impact on the future of the organization, it's employees and society at large.

So what type is your CEO - MYOPIC, TRANSACTIONAL, VISIONARY or PROTECTIVE?

AVINASH RATTA @Avinash Ratta is the Founder and Managing Director of GRAINVELOCITY www.grainvelocity.com, a growth-dedicated, turnkey project management and business growth management consultancy that is focused on driving the growth of ambitious businesses through the power of brand, innovation, digital and social. You can reach him at [email protected]. The thoughts and opinions expressed in this article are purely of the author and no-one else, are purely for the purpose of illustration and discussion and absolutely do not to refer to any company, organization or person, living or dead.