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When
I was traveling a few years ago to Washington D.C., I stopped into one
of those magazine
stores at the airport to find something I could read during my
flight. The headline from the June 21, 1999 issue
of Fortune
Magazine
jumped off the rack. Since then this article has been one of
my
favorites to share with friends,
associates, and
clients. I've also found the entire article on-line,
and highly recommend that you read it at Why
CEO's Fail
“It’s rarely for lack of smarts or vision. Most unsuccessful CEO’s stumble because of one simple, fatal shortcoming.” This was the headline from the article in Fortune Magazine that jumped out at me from the magazine rack at the airport. What I read during my flight was a very insightful article written by Ram Charan and Geoffrey Colvin. Charan
and Colvin studied over 40 failed CEO’s from Fortune 500
companies to see what went wrong. The fatal flaw of these
failed
CEO’s was pretty simple. It was
execution.
But the reason they failed in their execution came down to something familiar to many of us in leadership and management. People problems. That’s right, these captains of industry were toppled because of people problems, as in not having the right person in the right job, holding on to them too long, and not holding them accountable for the important things. As the article states, the majority also shared another flaw connected to their people problems: Ignoring the voice inside that said “you have a problem, move on it now”. Instead they replaced that voice with “I can coach them”, “He’s/She’s my guy/gal”, “They’re so talented they just need more time”, or “I don’t want to start over with someone new (head in the sand)”. As the article explains, these unsuccessful CEO’s/Managers lacked emotional strength when it came down to personnel decisions. In short, the fatal flaw of "failure to execute" was due to bad personnel decisions, which came from not having the emotional strength to do what was needed to be done in the area of people problems. How do you avoid this yourself? In my opinion, you do it by performing personnel evaluations on a consistent business level no matter what. You also do this by keeping the hiring process as a “just business” proposition and continue to keep it that way through proper and fair appraisals of performance. If it’s time for a change, act upon it before it’s too late while keeping it all business. It's very much like the way stockbrokers approach a stock: we'll sell once we go below this mark for whatever reason. It’s a discipline, or better still, it’s a behavior that does not falter. Leaders
need certain qualities to succeed, and there is a distinct difference
between management behaviors and
manager qualities. For example,
management behaviors
include execution, decisiveness, follow-through, and delivering on
commitments. In comparison manager qualities
include
integrity, maturity, energy, business/people/organizational acumen,
intellectual capacity, superior judgment, drive, the motivation to
grow, and the ability to convert learning into
practice.
The power of a managers qualities will predict how well they can execute the behaviors with the required emotional strength. Is
strategy, market strength, and timing important?
Sure. But
to a business nothing is more important than having the right person in
the right job, period. That is why CEO’s and
managers need
to regularly inspect how they recruit, who they hire, how they evaluate
performance, and have emotional strength to follow-through
with
what is required when people problems arise.
One final point to consider. Hiring is the single best/worst thing you can do for your company. Hire people as if your job depends on it, because in reality it does. Charan
and Colvin summarized their article this way, “They were all
smart people who worried deeply about a lot of things. They
just
weren’t worrying enough about the right things:
execution,
decisiveness, follow-through, delivering on commitments.
Are you?”
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