Your route to CEO C O N S U LT I N G

Transcription

1 Your route to CEO Tearle Robert

2 While the main focus of this article is to highlight how you can get to the top job, the information it contains will be relevant to any person interested in progressing their career. In particular, the article should be of help to middle managers thinking ahead or senior managers looking to make it to the next / top level. We have divided the information into three main areas of focus. In section 1, we outline the responsibilities of CEOs, set the scene and consider what qualities might be required in the job holder. In section 2, we state key facts and statistics to give you an insight into the role; and in section 3, we look at how you can increase your chances of getting there. A grow agenda is one that relates to organic growth; a buy agenda involves the acquisition of other and a companies; sell agenda relates to a strategy of selling out the firm, or parts of it, to another company or companies. Section 1: Background What is the role of CEO? The specific responsibilities of a CEO / Managing Director will be determined by the organization s board of directors, or the owner if the business is privately held. They can be broad and open, or quite narrow and clearly defined; the CEO might have free rein or be tightly managed. The goals and expectations of the shareholders / owners for a business will be subject to timescales, and may be set for intervals of, say, one year, two years, five years, and / or ten years and they will most likely be subject to change. On a theoretical level academics may argue that responsibilities may be defined in terms of roles: communicator, decision maker, manager, leader; whereas on a practical level, a CEO would usually be expected to be responsible for the profit and loss (P&L) of the business, financial reporting, and overseeing (through his or her team) not only the core business functions, which massively affect business results, (sales, operations, finance and accounting, human resources) but also governance, risk and compliance. The bottom line is that the role of CEO can be viewed simply as being responsible for the shareholders / owners investment, and how that investment reaps the maximum benefit in their eyes. Any organisation has a set of resources (employees, IP, products / propositions, cash, capabilities, customers, capital ability to borrow). The job of the CEO is really to determine how these resources can be used to return maximum benefits to the shareholders / business owners often determined by increased stock price, company value, sales, profit, market share. Both the appointment of the CEO and the nature of the role are likely to be heavily influenced by whatever agenda the organisation is pursuing: grow, buy or sell. Bear in mind that the overall agenda might either have more than one possible intended outcomes running in tandem and / or be subject to change. 02 Copyright A white paper from. roberttearle.com

3 What s the difference between Leadership and Management? There have been huge debates about the distinction between a leader and a manager, and whether one is inherently better in some way, or represents a magic bullet guaranteeing success. No doubt such debates will rage on for many years to come, but for now it seems fair to draw a distinction as follows: Leadership is about determining direction or vision and strategy for a group, which the group will subsequently follow; i.e. a leader will outline a vision and determine goals and objectives. The successful CEO surrounds himself or herself with great people who don t need to be micro-managed. And he or she will execute plans through multiple business units and teams, and keep the company headed in the right direction. Management is about putting into effect the people / team and resources to deliver those goals which have already been established. Management is about getting things done. This includes setting operational direction, and organising resources to maximise performance, drive optimisation and efficiency. What are they paid? The effective CEO will arguably be able to fulfil either role, as circumstances demand, possessing the vision and charisma to get people fired up and the management skills to direct his team to success. In Fortune 500 c. $1-2M basic, further $1M to $4M bonus + stock - median total pay $9.6M In FTSE 100 firms 850k median basic salary and total 4.2M Turn to the next page, to find out about facts about CEO appointments... Copyright A white paper from. roberttearle.com 03

4 Section 2: Key facts and statistics The average age for someone to become a CEO is 50. CEOs have high IQs AND are emotionally intelligent. Very few CEOs have high IQs and low emotional intelligence. Chief Executives are ordinarily appointed from people with one of three backgrounds: About 30 percent of CEOs have finance and accounting backgrounds. Some 20 percent of CEOs have sales or marketing backgrounds. Operations backgrounds or those within the core line of business that that firm is in, for example: Manufacturing firms: people with operational backgrounds; engineering, production, design, etc. who understand the complexity of such a business, when combined with commercial / senior management experience may see career progression from engineer, manager, senior manager, COO, and ultimately to President. Professional services firms: people with backgrounds in the firm s specialist area can do well. For example, in a human resources consultancy, it would be highly likely to find a CEO from a background in HR. CPG firms: as these are heavily marketing-led, marketers at CPG companies often rise to the top. The common theme being that it is unlikely for someone in a non-core business function to rise to the top i.e. HR, IT, admin, customer services more about this later. Approximately half of Chief Executives have had board experience before securing the top job. Loyalty is key to progression, as percent of CEOs are appointed from within. Internal hires have the advantage of understanding company culture, and are already aligned with key stakeholders, board members and the exec team. And, according to the Centre for Creative Leadership (USA), some 10 percent more likely to be successful than external hires. The average time to have served in a company before getting to CEO is in excess of ten years; however, you can expect this trend to change downwards, and it varies from industry to industry. Less than a third of those promoted to CEO were lifers (just one employer since starting work). Experience with several employers brings outside perspectives and best-in-class practices from a broad range of companies. Turn to the next page, to find out how you can get there. 04 Copyright A white paper from. roberttearle.com

5 Section 3: How to get there Identify what you want to achieve and develop a roadmap for getting there This should include milestones, timescales and in some cases, precise details. Consider your ultimate goal (title, company type) and timescale (when you want to get there, perhaps five or ten years from now) and work backwards to develop a roadmap. Identify what qualifications you will need, what experience you will need to gain, what accomplishments you will need to have made, what scope of responsibilities or job titles you will need to have held and how you will go about building a support network. Consider building in contingency: what if circumstances change? Place yourself in a strong position to get to the top You need to align yourself properly, in an environment in which your background is particularly well equipped to secure the top job. Look again at the information in section 2, point 3: Chief Executives are ordinarily from a finance and accounting or sales background, or else they have deep expertise relevant to the core line of business that the firm is in. If your expertise is in a non-core business function i.e. HR, IT, admin or customer services, you should consider moving into a company in which your core expertise is their core business for example an HR professional moving into an HR Consulting or HR Outsourcing firm. Building competencies, credentials & bridging skill gaps Getting to the top will be achieved in a series of stages, from individual contributor to manager, to senior manager and then leader. Prior senior-level managerial experience is also generally a must. Gain board level experience. This can be gained with your employer or outside of the company as a non-exec director or in a not for profit organization in which you can build experience in areas like strategy, corporate governance, and develop leadership visibility / status. Invariably employers will look for someone with a degree if you don t have one you may wish to consider studying for one and if you ve got business experience, degrees in a relevant area can be much easier and more interesting to study than without. You need the right qualifications on paper who wants to be operated on by an unqualified surgeon? Copyright A white paper from. roberttearle.com 05

6 You need to develop financial acumen Boards and business owners are looking for CEOs who can create shareholder value for the company and a pre-requisite for this is understanding finance and accounting, and understanding the financial ramifications of decisions. You can develop your financial acumen both practically, through getting involved in writing business plans and financial planning, and theoretically, by attending courses for example, finance for non-financial managers. A certificate from a high-profile business school adds to a candidate s credentials. Emotional intelligence Those people appointed into CEO roles have high IQs AND are emotionally intelligent, and the good news this is a competency which can be developed. Read more about this in our emotional intelligence white paper. Aggressively seek promotions In most companies there will be several management layers to progress through to get to the top job; don t expect that you will be able skip a few levels. If you are reactive you ll potentially miss chances, and time and opportunity will pass you by. If you are proactive and actively seek promotions and opportunities to broaden your experience, you will be much more likely to succeed. Make your ambition known. Ask for opportunities that may present themselves and volunteer for assignments and openings that may arise, provided they are aligned with your goals and aspirations or will offer you an advantage over your competitors. Be sure to come across as being genuine; you need people to be onside, so be careful not to alienate yourself nor appear selfish. Be an agent of change / distinguish yourself from the competition and incumbent One of the best ways to gain broader experience and set yourself apart from others for a promotion is to seek out ownership of new projects. Businesses operate in a competitive landscape and fast changing environment, standing still isn t an option. Stakeholders are looking for people who can bring about transformative change if you can build a track record showing what positive contributions and changes you have made you ll be better placed. It s not just about past achievements, it s also about future aspirations. When interviewing, you need very well thought out, researched plans to show how you would create significant additional value in the role. 06 Copyright A white paper from. roberttearle.com

7 Alignment, networking and brand you! Right or wrong, companies are political entities and anyone who ignores this will be powerless. You should set clear goals with regard to aligning yourself well and networking, choose appropriate mentors and mentor others in turn, develop supporters, build and exercise influence think about this like an election campaign. Alignment: Alignment should be across business functions and in some cases may need to extend into your broader environment key customers, suppliers, business partners and industry associations / bodies etc. You need to both add value and be seen to be adding value. You need be well-sponsored by stakeholders and people in power, and these individuals are likely to change with time. Networking: One of the biggest benefits of networking is in giving you broader perspectives. An additional advantage of networking is in opening up opportunities outside of your current employer what if the top job doesn t become available, what if you come second in the promotion selection process or if circumstances change; for example, your employer is acquired. Read more about this in our networking white paper. Brand you: You need an executive presence. This means gravitas, presentation and impact. This isn t just about how you are seen at work, but also what you do out of work which may influence how people see you and, finally, your online profile i.e. LinkedIn / Facebook / Twitter. Read more about this in our brand you white paper. You ll stand a far better chance working with help, support and coaching from trusted advisers than you will in a solo pursuit of the top job. So find a mentor, build a network of supporters and set about developing your profile as an influencer and agent of change. Copyright A white paper from. roberttearle.com 07