When CEO apologizes...

I have worked in several companies either a local conglomerate or a multinational organization. In my entire work life of >12 years, I was lucky to witness the event of CEO made “apologizes remarks” with my fresh pair of eyes & ears. There were 3 CEO of a wholly different organization apologize to the BoD in various sizes, issues and intensity being observed & oriented. In this context, I started to wonder why some CEO succeeds and why some CEO fail.  

Let’s me quoted a real case example, (will not disclose another 2 cases here)

Mr. Alan (not his real name) stood up and adjusted his suit coat. The CEO was here at the annual executive board meeting with his board members who still played with their BlackBerry (Apple phone not yet so popular many years ago). I remembered he said “I am deeply sorry! I am here to apologize to the board on the worst financial result. The market sentiment was uncertain, and the competitors were attacking us aggressively that lead to this unfortunate outcome. However, I took full responsibility for this and will chart the new strategy and action plan to turn around the business. Thanks for the trust of the board for me to continue drive the company out of this hardship.” All the board members listened to his remarks attentively, some of them were nodding their head with disappointment kind of emotion shown on their faces. That was the 15 months after the CEO assumed the role. I was so sorry to be there to witness all this when I was still the “management trainee” in the company. At that moment, I can assure you that I was whispering to myself “I shouldn’t be there in the first place. It is so awkward!” The climate in the room was so tense and unpleasant. The Chairman told him to sit since they could all hear him. He thanked the Chairman but insisted on standing up while addressing the Board.

On that night, I couldn’t sleep well. The tense up of feeling incompetence, sorry, sympathy, worried… regardless how high you climb the corporate ladder, even in the high-tech world, the laws of the jungle still rule. It must be a tough call for the CEO to apologize to the BoD. 

Why successful, competent and well-trained executives stumble when they reach the top of the ladder?

After some years pass, I started to realize that there were so many CEO apologize to the board, public, customer & etc. in all sorts of cases happened in their leadership.

Recent news:

Reddit CEO and co-founder apologize after discussion board site thrown into 'revolt' following firing of popular employee

In the book of “The First 90 Days: Critical Success Strategies for New Leaders at All Levels” written by Michael Watkins illustrated in Chapter 3 “Match Strategy to Situation”. 

He emphasized the importance of the transition period, especially in the first 90 days. The dangers of “one best way” thinking, diagnosing the situation to develop the right strategy, the STAR model of types of transitions, using the model to analyze portfolios, reward success and develop leaders.

According to the author, the business can classify into Start Up, Turnaround, Alignment for Success and Realignment phases. That required a different set of skills of the talent in each phase name as either Hunter or Farmer. You should pick up the book if you haven’t. Personally, I found it very useful for all new leaders at all levels.  (I am not associated with the author or any publisher to promote the book!)

Please don’t get me wrong, I am not here to teach what a CEO should do. I am not as CEO before even on any single day of my corporate life. CEO has my utmost respect as the top tier senior management in the organization who are the one that being trusted by the entire organization to chart the life of another for betterment.

The list to ensure CEO succeed can be very exhaustive nowadays, I just want to share a few that I think important to my personal record.  

1. BoD

• They are here to approve or disapprove the action proposed by its CEO. They are not here to solve the CEO problems. If the board started to involve in solving a problem instead, there must be a crisis already in leadership. Consensus is paramount instead of just taking orders or giving orders to the board.

2. Short Term or Long Term Gain

• The CEO needs to commit for the long-term while also need to harvest short term quick win.
• A CEO, who can have all their team head, body & heart is indeed engaged in disseminating value, purpose and vision as a long-term support line.
• Solely focus on financial result & shareholder return may set traps to fall.
• CEO tenure is relatively short, 3 – 5 years perhaps. The majority is inclined to the short-term gain as a game to secure the chair.

3. Command & Control

• Unable to give up the authority, or to care about the detail of the daily activities and still practice micromanagement. This will eat up a lot of time of the CEO while he should be the one spend more time thinking about the strategic issue. Example, Business strategy, expansion need, portfolio revamp exercise, execution gap & etc.
• If a CEO fall into the management of the daily operational matters, means there is an enormous competency gap in his direct reports. I would say this is a crisis in middle management. The CEO has to be bold enough to take action to replace, relocate, demote, promote or even terminate, foster strict carrot & stick reward system, emphasize right people in the right job in his organization chart. Timing is very critical here to act.
• One CEO said, “I found that the most important decisions tested my courage far more than my intelligence.”

4. Introspective Awareness

• The ego and high confident, sometimes possess threat. The person who knows it all already will not able to accept any feedback from others. In order to achieve effective leadership, constant feedback & introspective exercise are needed. The CEO is also a human being; the stellar past performance does not guarantee future achievement.

5. Integrity and Honesty

• CEO with integrity produce a better result in general. It is a return to the great character that matters. We look for values-driven leaders of integrity, compassion, and accountability that can forgive mistakes and continue to gain wisdom and maturity with his leadership.
• We do not want a CEO has seen the employees were as a replaceable resource and treated as human capital, not people. A workforce that feels cared for is more productive than one that feels neglected, and that believe able to translate into bottom-line financial results.
• Any rumor connect with corruption, receiving a donation, promote crony business relationship and politically driven undoubtedly will discount the character, credibility regardless how good the performance & how smart a CEO is.
• One CEO said, “When I became CEO 10 years ago, the company's situation was dire. The debt was mounting, the stock sinking and bankers were calling. People urged me to declare bankruptcy, but I felt personally responsible for tens of thousands of employees.”

The CEO has a tough job! Wish all the CEO and Business Leader have a great success!

Through your influence, vision, ethics and authenticity you create a better reality for your family, community, and organization, where those around you and those who follow you are inspired to dream, learn and act!

Thank You CEO!

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Please feel free to add in the comment section that you think any points above are debatable, and also welcome you to add to the list above. 

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Darrell Tan is attaching to a corporate profession in Business Development & Strategic Planning. He is also a Certified Professional Trainer (CPT), Certified Train the Trainer and Certified Business Analyst. He believes & inspired by “Anyone shall be given a chance to learn hence transform learning into long-lasting growth!” 

He is passionate in organizational development (OD) & business transformation activities. 

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