What do I want others to say about me as a leader? Select topics and stay current with our latest insights, The mindsets and practices of excellent CEOs. Vault this year introduced a new practice area ranking for the best consulting firms for technology, media, and telecoms (TMT), a fast-growing niche. Fred Adair and Richard M. Rosen, “CEOs misperceive top teams’ performance,” Harvard Business Review, September 2007, hbr.org. By emulating the four strategic-planning best practices, you can boost the ratio of insight to effort and align the organization around a strategy that is faithfully executed, constantly questioned, and regularly refreshed. Reinvent your business. Each solution should push thinking about best-practices. We also offer a self-assessment guide to help CEOs (and CEO watchers, such as boards of directors) determine how closely they adhere to the mindsets and practices that are closely associated with superior CEO performance. Scott Keller and Bill Schaninger, Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change, Hoboken, NJ: John Wiley & Sons, 2019. CONSULTING REIMAGINED. As the dean of Harvard Business School, Nitin Nohria, has said, “CEOs are accountable for all the work of their organizations. Scott Keller and Colin Price, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage, Hoboken, NJ: John Wiley & Sons, 2011. Industry and geographic trends account for 25 percent. They seek opportunities to go on the offensive, to the extent they can. Eben Harrell, “Succession planning: What the research says,” Harvard Business Review, December 2016, pp. Despite the luster of the role, serving as a CEO can be all-consuming, lonely, and stressful. We mined our proprietary database on CEO performance, which is the largest of its kind, containing 25 years’ worth of data on 7,800 CEOs from 3,500 public companies across 70 countries and 24 industries. A company has only one peerless role: chief executive officer. The odds of making the jump from average to outstanding might be long, but CEOs can greatly increase the probability of beating those odds by adhering to these practices: Vision: Reframe what winning means. A services company CEO, for example, better enabled her “one company” strategy by shifting the profit-and-loss axis from products to geographies, reorganizing the back office according to an agile flow-to-work model, and creating a new agile product development group. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. tab. An effective board can also repel activist investors. They also spend time with their companies’ 15 or 20 most important “intrinsic” investors (those who are most knowledgeable and engaged) and assign the rest to the CFO and the investor-relations department. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. Excellent CEOs form a small group of trusted colleagues to provide discreet, unfiltered advice—including the kind that hasn’t been asked for but is important to hear. Robust talent pipelines can also be developed so that important roles remain well staffed. by David H. Maister, Charles H. Green, and Robert M. Galford. It’s easy for CEOs to become overconfident. Most surprising of all is that the remaining 10 percent are roles that don’t even exist. 15 And not demonstrating such results isn’t an option—wise CEOs know they will be held to account for fulfilling their promises. 12 We also drew on what we’ve learned from helping hundreds of CEOs to excel, from preparing for the job and transitioning into it, through navigating difficult decisions and moments of truth, to handing their responsibilities over to a successor. ... management consulting is the business of problem-solving. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. You will see that magical phrase mentioned numerous times in white papers and research on these websites: Boston Consulting Group, Deloitte, PWC and Accenture. Our hope is that all CEOs, new or long-tenured, can use these tools to better apply their scarce time and energy. To show which mindsets and practices are proven to make CEOs most effective, we studied performance data on thousands of CEOs and revisited our firsthand experience helping CEOs enhance their leadership approaches. In addition to personal impact and entrepreneurial drive, McKinsey also assesses leadership using the PEI. Add to cart. Excellent CEOs develop and maintain a strong relationship with the chair (or lead independent director) and hold purposeful meetings with individual board members. Cognitive and organizational biases worsen everyone’s judgment. Practice with peers. Strategy: Make bold moves early. “Dan Ariely on irrationality in the workplace,” February 2011. In true McKinsey style, there is a lot of analysis and data. For the IT cases, I recommend reading the articles of the consulting companies about these topics on their websites (Hundreds of them if you google by key words "agile", "Digital", at McKinsey… Yet more than half of senior executives report that the top team is underperforming. For the regular cases on preplounge will be most helpful. Such an agenda calls for the board to go beyond its traditional fiduciary responsibilities (legal, regulatory, audit, compliance, risk, and performance reporting) and provide input on a broad range of topics, such as strategy, M&A, technology, culture, talent, resilience, and external communications. Excellent CEOs don’t allow one management process to foil another. 10 20. According to McKinsey research, five bold strategic moves best correlate with success: resource reallocation; programmatic mergers, acquisitions, and divestitures; capital expenditure; productivity improvements; and differentiation improvements (the latter three measured relative to a … PUTTING IT ALL TOGETHER. And when it comes to putting great talent in place, almost half of senior leaders say that their biggest regret is taking too long to move lesser performers out of important roles, or out of the organization altogether. Just three in five newly appointed CEOs live up to performance expectations in their first 18 months on the job. Scott Keller and Mary Meaney, Leading Organizations: Ten Timeless Truths, New York, NY: Bloomsbury Business, 2017. Teamwork: Show resolve. 8 Urgent product ideas are approved, only to get bogged down in long technology queues and one-size-fits-all risk-management processes. It is the fruit of a long-running effort to study performance data on thousands of CEOs, revisit our firsthand experience helping CEOs enhance their leadership approaches, and extract a set of empirical, broadly applicable insights on how excellent CEOs think and act. collaboration with select social media and trusted analytics partners Making one or two bold moves more than doubles the likelihood of rising from the middle quintiles of economic profit to the top quintile, and making three or more bold moves makes such a rise six times more likely. Nevertheless, CEOs sometimes feel as though they’re immune to bias (after all, they might ask, hasn’t good judgment gotten them where they are?). Digital upends old models. In the largest research effort of its kind, McKinsey found that CEOs who insist on rigorously measuring and managing all cultural elements that drive performance more than double the odds that their strategies will be executed. McKinsey topped that category, followed by BCG, Accenture, Deloitte, and Bain, respectively. they appeal to the curious : Clients want insight into what competitors and other leading companies are doing. According to McKinsey research, five bold strategic moves best correlate with success: resource reallocation; programmatic mergers, acquisitions, and divestitures; capital expenditure; productivity improvements; and differentiation improvements (the latter three measured relative to a company’s industry). However, sensible individual processes can cohere into a clumsy system that results in more confusion and wasted effort than accountability and value. Organizational design: Combine speed with stability. 4. The New Hiring Practices At McKinsey And Goldman Sachs. Talent: Match talent to value. 2. CEOs who insist on rigorously measuring and managing all cultural elements that drive performance more than double the odds that their strategies will be executed. Board members’ outside views on these topics can help management without compromising executives’ authority. Subscribed to {PRACTICE_NAME} email alerts. Our flagship business publication has been defining and informing the senior-management agenda since 1964. CEOs can easily become overwhelmed, which is understandable given the sheer breadth of their role. Vendors of workforce surveys like to say that employee engagement is the best measure of “soft stuff.” It’s not. Their life is endless meetings and a barrage of email.” Great CEOs and their boards also anticipate major shocks, macroeconomic events, and other potential crises. Many of the CEOs we’ve worked with have expressed similar views. For example, instead of a manufacturer aspiring to be number one in the industry, the CEO can broaden the objective to be in the top quartile among all industrials. Learn about Scott Keller and Bill Schaninger, Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change, Hoboken, NJ: John Wiley & Sons, 2019. Excellent CEOs form a small group of trusted colleagues to provide discreet, unfiltered advice—including the kind that hasn’t been asked for but is important to hear. Such a reframing acknowledges that companies compete for talent, capital, and influence on a bigger stage than their industry. Every CEO should know their company’s mission and values. But financial measures of CEO excellence have a serious shortcoming: they are heavily influenced by factors outside the CEO’s control. 12. Simply thinking through these questions as they relate to the problem can help you create a strong problem statement. The result of these efforts is a model for CEO excellence, which prescribes mindsets and practices that are especially likely to help CEOs succeed at their particular duties (Exhibit 1). Many CEOs have confided to us that they worry about asking the same few overstretched “usual suspects” to take extra assignments because they can’t trust the people who would otherwise perform them. Best practices are like good […] If you are uncertain whether you have to take it or not, assume that you have to, and practice for it before having confirmation from the HR. 10. The best CEOs ensure that their own role is included so that the board has viable, well-prepared internal candidates to consider for succession. There were non-intuitive and innovative recommendations among the “best practices" for reopening the county. We use cookies essential for this site to function well. Exemplary CEOs combine the reality of what they ought to do in the role with who they are as human beings. Five newly appointed CEOs live UP to performance expectations in their role questions as they relate the! And reserve time to deal with unexpected developments ve worked with have similar! 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