CEO Coaching: Guiding Principles—What Are Yours?
This is the most worn book on my bookshelf. First published in 1973, I bought it in graduate school decades ago and still pull it out frequently. If you’re in business and don’t know who Peter Drucker is, you’re not well-versed—like an American history major who doesn’t know Abraham Lincoln, a foodie who doesn’t know Masaharu Morimoto.
I thought of Drucker as I read “Best Managed Companies” recently in The Wall Street Journal. The article is based on Drucker’s work and considers five broad areas: customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength. All measurable. All actionable.
Layered over these five areas are two principles that speak to the challenge of good leadership: balance and long-term thinking.
I like this model. If you can delight customers and employees, develop new products and services, conduct business honorably, and do it all profitably, you should at least get a lollipop—if not a large bonus.
There’s no excuse beyond ignorance for a rudderless business. Adopt the Drucker Institute’s model or develop your own, but focus on something—actually several things. That’s the balance part. You might have an intense focus on one of the five areas above, but if you do so to the detriment of the other four, you won’t optimize your business for the long term. Balance in a leadership role—particularly the CEO’s role—isn’t easy. It requires saying yes to some things that feel uncomfortable, and it requires saying no to some things you like. Turning down immediate revenue because it causes problems in one of the other four is particularly hard.
Long-term thinking is too often a rare commodity, particularly in public- or private equity-backed companies. One of my favorite clients exemplifies healthy thinking about profit and timeframe. A purpose-driven, privately owned company for decades, the owner, management team, and board make long-term bets about acquisitions, capital expense, and investment spending on people if it serves their purpose even if the ROI takes several years. As a result, the culture is very positive, their executives are extremely devoted, and they continue to provide very good returns on invested capital.
Businesses should exist to profitably address a market’s needs. Unless you’re a communist, you probably agree. There are, however, many ways to run a business. The best of those I’ve worked with have clear principles. They have clarified and memorialized what success looks like and how they’ll go about their business. Have you?
coaches CEOs to higher levels of success. He is a former CEO and has led teams as large as 7,000 people. Todd is the author of, Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be (Morgan James Publishing).