“When you are the CEO, people lie to you!” hammered Daimler-Benz’ CEO. “And yet you have to make decisions with incomplete and untrustworthy information. How do you do that?” The audience expected a traditional talk about leadership – instead the CEO of one of the largest car-makers in the world was comparing his job with that of a parent asking their child whether they brushed their teeth.
The information shared with you as the CEO is more suspect than it is for anyone else, insulating you in a bubble. As a result warning signals are tamped down, blurring your ability to make sound decisions and to correct your mistakes. What can you do to burst this bubble?
Insulated in the CEO bubble
Bursting the CEO bubble is “my job’s #1 challenge,” says Charles Schwab CEO in this HBR article. The higher you are in an organization, the thicker the bubble. As a CEO you are “insulated—perhaps more than anyone else in the company—from information that might challenge your assumptions and allow you to perceive a looming threat or opportunity.”
Information bubbles can have disastrous consequences, as in the explosion of the Space Shuttle Challenger in 1986. The commission that investigated the disaster “leveled harsh criticism at NASA for ‘management isolation’,” as related by Adam Bryant and Kevin Sharer in The CEO Test. A more recent example is Boeing and the 737 Max safety issues.
The CEO bubble creates a false sense of confidence that you really know what’s happening in your organization, which ultimately slows down your business growth. Charles Schwab’s CEO continues: “The difference between successful executives and unsuccessful ones is not the quality of their decision making,” he says.
“The difference is, the successful executive is faster to recognize the bad decisions and adjust, whereas failing executives often dig in and try to convince people that they were right.” If the speed of spotting your faulty thinking is what makes you successful, then you’ll want to find out when you’re wrong as soon as possible. That makes your CEO bubble your #1 enemy. Bursting it improves the quality of your leadership, and helps you grow faster and with less pain.
What are the root causes of your CEO bubble?
Your CEO bubble has a couple of root causes:
- People don’t tell you the whole truth: “When the leader asks questions, the default response is often a two thumbs-up” explain Bryant and Sharer. People tell you what they think you want to hear, and are afraid of telling you what they believe you don’t want to hear, due to:
- Your own behavior – eg your reaction to previous feedback or “bad news” conversations.
- The employee’s own side agenda. (eg career ambitions, a personal cause).
- Your ego danger zone: Many CEOs have the feeling that their board, shareholders, and employees expect them to be confidently right. Yet you can’t be right and curious at the same time, and this willingness to be right reinforces your CEO bubble.
“All these forces create a formidable challenge for senior leaders to listen more effectively so they have a clear understanding of all the signals. Breaking through the bubble requires intentional strategies, starting with an awareness that the bubble exists in the first place.”
Listening, the key to bursting your CEO bubble
This is the crux of the issue: many CEOs think that the CEO bubble only exists in larger companies. And yet as their business coach I see their senior leaders behave differently when the CEO is in the room. Not because they are bad people, simply because you have a special, unique function: you are the CEO.
The first step of breaking down your CEO bubble is recognizing that it exists. The second step is to be very intentional about bursting the bubble.
Here are five initiatives you can take to burst your CEO bubble:
1. Be aware of your CEO bubble through these tests:
- The “funny joke” test: Tell an unfunny joke and see how your leadership team reacts. If your leaders laugh more at your “funny” jokes than your children or your spouse, your CEO bubble is a real problem.
- The “stupid investment” test: Suggest an ambitious yet stupid investment idea, and see how many of your leaders will tell you in your face that your idea is stupid. If not all of them do, you are in trouble.
2. Be a better listener in conversations with employees:
- Be curious about the other person’s point of view, instead of fitting what your employees are saying into your story.
- Listen without formulating a response in your mind.
- Remain silent for 3 to 5 seconds between comments. This will help people who have a tough time telling you that something is not going well.
- Formalize regular listening moments: an open door policy works only in your mind, not in the mind of your employees. Organize town hall meetings, monthly “lunch with the CEO,” or regular “Open table meeting with the CEO,” with no set agenda and where people also have the opportunity to ask questions anonymously.
3. Regularly ask for formal feedback with questions like:
- If you were in my job, what would you be focusing on? Because this question is not about you, it makes it easier for people to volunteer information.
- What is broken in our company?
- What should I keep / stop / start doing?
- What else should I know?
4. Regularly talk about your mistakes and declare publicly that you don’t have all the answers. This might be obvious to you, but it isn’t to your employees.
5. Take care of yourself:
- Every week, ask yourself “What am I going to be curious about?”
- Book quiet time on your calendar, so that you have time to clear your head and come up with the right questions.
Breaking down your CEO bubble requires creating awareness of the issue and actively taking initiative. As a CEO you need to turn the cliché of “no news is good news” on its head. No news is actually bad news, because it means that warning signals of problems are not reaching you.
As a business growth coach, I work with founders of mid-market companies who are frustrated because their business is not growing the way they want; my passion is to help them identify and remove the growth roadblocks they have been hitting so they can grow faster and with less pain. Often they don’t get all the information they need to make better decisions, and don’t realize it and/or don’t know how to improve. I would like to learn about your growth roadblocks; contact me to discuss at Xavier@AmbroseGrowth.com.
“My company has lots of potential, but I just feel my employees are not engaged. If I don’t push, nothing seems to happen. I’m working night and day and we’re still missing 40% of our targets. I once dreamed of being a firefighter, I guess that dream has come true. All I do is put out fires, I have no time to focus on my business.”
Sound familiar? CEOs and leadership teams can change this picture, it’s all about accountability. Creating a fierce culture of accountability starts with the CEO and leadership team.
Why is accountability important?
Accountability is about owning a problem. You want employees to behave as if they own the piece of business that they are running. When you are accountable for a specific result, you will do whatever it takes to achieve it – and you would like your team to perform this way as well.
Carlos Brito, the CEO of brewing company AB Inbev, summarizes his views on accountability in these words: “We always compare that to a rental car: you drive a rental car in a different way than your own car. With a rental car someone else will live with the consequences of your driving. With your car, you know that it will be yours the next days, months, and years, and you know that you will be living with the consequences of your driving. Employees who behave like owners are here for the long term, and they will live with the consequences of their decisions – good or bad – and that builds a great company.”
Why am I having accountability issues?
Accountability issues are very common among growing companies. When you founded your company, you were personally accountable for everything. As your company grew you started delegating the responsibilities for some results – e.g. production, customer service, or sales. However, you may not have created the communication channels required to hold your teams accountable. Why would you? You didn’t need any of this yourself, and yet you grew your business successfully. Why would these smart managers need anything different?
For one, your employees are not you. If they were, they would not be working for you: they would start their own business. Second, your company is now more complex than we you started: it has more people involved, and all these people now need to be on the same page. Third, when you started your company with a few employees, you could be on top of each of them and had short communication lines: you knew what everybody was doing, all the time. Now that your company has more employees it is impossible for you to manage them the same way: this would soak up all your time. This is exactly why you need to put a system in place that will achieve what you want (ie create accountability), without you spending all your time on it.
In the book “Creating a Culture of Accountability” Gravitas Impact business coach Mark Green describes ways to increase your team’s accountability. This article outlines five of them
1. Lead by example
Like many aspects related to company culture, accountability starts with you and your leadership team. In order to create a culture of accountability you have to model the behaviors that you want to see in your organization. When it comes to accountability the rule is simple: when you make a commitment as a leader, you have to keep it. If you don’t, why should anyone else be interested in doing so? You can’t complain that employees miss their deadlines if you are occasionally late as well. As a CEO “all eyes and ears within your business are focused on you. What you say and what you do are invisibly and constantly observed, scrutinized and evaluated as your managers and employees are looking for clues as to how they should behave,” explains Mark Green.
Leading by example is not only about you sticking to your commitments, but also about your expectations from your team – and your behavior when your managers don’t meet your expectations. If your team members notice that there are no consequences for missing targets, why would they try their best? Similarly, if you tolerate one of your team members to produce poor results, why would other team members feel pressured to produce quality? When you hold your team to a higher standards, you are sending a strong signal across the organization.
2. Have the right people on the right seat
Without the right people on the right seat, nothing of what you can do will significantly increase accountability. The key question is: would you enthusiastically rehire everybody on your team? I advise my clients to assess employees on two dimensions; performance and adherence to company values. You will find more information on how to use this tool in this article.
Once you have the right people on your team you need to clarify their area of accountability. This is less obvious than it looks. The key question is: Who is accountable for each of the key functions in your company? As Mark Green explains “the exercise often reveals that there isn’t a single individual accountable for each function. When more than one person is “accountable”, nobody is accountable. It is easy to make assumptions that things will get done, but when there is not a designated person to account for a particular result, chances are, it is not going to happen. In this kind of environment, it is also easy to point fingers – Bob thought Mary would handle it, and vice versa. Other times, you’ll discover that a particular role hasn’t been filled by anyone at all; it is just implied that it will somehow be handled. Spoiler alert: it doesn’t!”
3. Clarify priorities
“The main thing is to keep the main thing the main thing,” wrote best-selling author Stephen Covey. “Individuals or organizations with too many priorities have no priorities and risk spinning their wheels and accomplishing nothing of significance,” says Verne Harnish in his book “Scaling Up.” Focus on a small number of priorities that will have the biggest impact on your goals, make sure that everyone on your leadership team is aligned on them – and communicate them broadly.
When employees understand where your organization is going and which role they play in it, they work less selfishly and they tend to make better business decisions on behalf of the company – simply because they can see the impact of their decisions and how they impact overall results.
4. Define clear action plans and metrics
Once you have identified who on the leadership team is accountable for each function and what your top priorities are, the next step is for each of your leaders to answer Mark Green’s key question: “What are the 3 most important results the company expects you deliver in exchange for paying your salary – and how should these results be measured? This step determines the results and metrics for each of your leadership functions. As we all know, you can’t manage what you don’t measure. If you want to increase the speed and quality of a particular service you offer, you should establish specific metrics to gauge those factors and identify metrics and targets for them. You may determine if you reach or surpass a target for three months in a row, you have achieved that objective.” Pick specific metrics, make sure that your leadership team is on the same page and that everybody aims for the clearly defined results – so that the rest of your organization can follow your lead.
Similarly, once you have defined top quarterly priorities, the question becomes: what do you and your team need to do in each of the next 13 weeks in order to achieve priorities? There are only 13 weeks in a quarter – if you do NOT view your quarter as a 13-week race, you will lose weeks and time which you will NOT get back. A weekly plan clarifies what can be expected every week, in order to meet expectations at the end of the quarter. It also makes it much easier for your leadership team to hold people accountable to their own 13-week plan.
5. Establish a metronome-like meeting rhythm
Just as a metronome calls time and sets tempo in a musical performance, so do a small set of consistently executed meetings to hold you and your team accountable, and keep everyone on the same page. The essential regular meetings are:
- Daily huddles (no more than 10 to 15 minutes) to evaluate progress on the very short-term priorities and identify any blocking issues.
- Weekly huddles (no more than 90 minutes) to review the status of the 13-week plan and course-correct if needed.
- Monthly and quarterly meetings to review progress on the priorities, take corrective actions when needed, and identify new priorities for the upcoming quarter.
I often notice that the most impactful meetings to drive accountability are the daily and weekly huddles: they create peer pressure and hence take the heat off your shoulders as the leader. They also improve communication: You won’t need to have the same water-cooler conversation three of four times, as is the case when you rely on chance hallway meetings for communication. And finally they enable collective intelligence to solve problems.
In the end, how much difference do these tools make on accountability? Pretty big, as this example from another Gravitas Impact business coach, Glen Dall, demonstrates in Mark Green’s book “Creating a Culture of Accountability”: “I worked with the CEO of a multi-location dental practice. The CEO had started with one practice that they grew very successfully – and then began expanding. At one point employee turnover rates increased to 200%. The leadership team would plan and set goals, but frequently failed to achieve them. The growth rate was declining. The CEO felt over-extended, frustrated and stressed.”
With the leadership team Glen Dall leveraged these tools to have the right people on the right seat, set priorities and targets, as well as establish a proven system to follow up on them. The result? “After our first 6 months of working together, the CEO told me, “You should be proud of how far you’ve brought the team. I feel that we have accomplished more in the past 6 months than we were able in the last 7 years.” That is the power of accountability.”
As a business growth coach, I work with founders of mid-market companies who are frustrated because their business is not growing the way they want; my passion is to help them identify and remove the growth roadblocks they have been hitting so they can grow faster and with less pain. Often their roadblocks include a lack of accountability: they have no system in place to regularly follow up on their team’s many commitments, or their teams don’t have clear priorities and metrics. I would like to learn about your growth roadblocks; contact me to discuss at Xavier@AmbroseGrowth.com.
What about you? How accountable is your team? How has Covid impacted accountability? Over the past couple of years, how many quarters has your company reached and missed their targets? What were the consequences of hitting targets, and what were the consequences of missing them? Do you have clear metrics and regular meetings in place to follow up on each of your priorities?
Let me know your thoughts in the comments section.