CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest

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In the past, leadership was called “management,” with an emphasis on providing technical expertise and direction. The context was the traditional industrial economy command-and-control organization, where leaders focused exclusively on maximizing value for shareholders. In these organizations, leaders had three roles: planners (who develop strategy, then translate that strategy into concrete steps), directors (who assign responsibilities), or controllers (who ensure people do what they’ve been assigned and plans are adhered to). What are the limits of traditional management styles?

beyond planner to architect, reimagining industries and innovating business systems that are able to create new levels of value Associated with this alignment is ‘organisation design’, which can involve doing away with certain positions and verticals and creating new ones. This can be a challenge because everywhere people matter and the reskilling of staff becomes important. Traditionally, this has taken a lot of time for companies to change and successful CEOs have to shorten the same. Getting new talent can be required to become more nimble-footed but the costs have to be weighed not just in terms of the salary bill, but also taking along the staff. The single most important thing I have to do as CEO is ensure that our brand continues to be relevant.” — Chris Kempczinski, CEO of McDonald’s That’s the question the just-released book CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest sets out to answer. It also pays to get your head of human resources intimately involved in this process. At Singaporean multinational banking and financial services corporation, DBS Bank, for example, CEO Piyush Gupta says, “For every job, mine included, we [my head of HR and I] work through what is the slate, who could do the job soon, who could do the job in three or five years. We then case manage 100-odd people. Who needs to move, where should we move them, how do we get them the exposure and growth they need to get from point A to point B. It’s very well structured.”

1. Actions to deal with digital disruption

Excellent CEOs understand the risk/reward trade-offs of potential big moves and study to downside scenario. Having imperfect information when making decisions is common, so a decision tree may need to be employed. Leaders must learn to make these five shifts at three levels: transforming and evolving personal mindsets and behaviors; transforming teams to work in new ways; and transforming the broader organization by building new levels of agility, human-centeredness, and value creation into the entire enterprise’s design and culture.

I think the fundamental role of a leader is to look for ways to shape the decades ahead, not just react to the present, and to help others accept the discomfort of disruptions to the status quo.” — Indra Nooyi, former chairman and CEO of PepsiCo When you talk to great CEOs, the things I hear about aren't how big the company is, how high the share price is, how much money they make...” he observes. “[It ’s] how they make their people feel. That ’s the legacy of a great CEO.” And a leader of any kind.Much of Vik’s current focus is on counseling CEOs and boards, and he is passionate about topics that matter to senior leadership. He believes the book offers a primer for any person who wants to be a strong leader, whether they are on the path to becoming a CEO or not. Additional considerations, such as making sure that in-person work and togetherness has a purpose, are important. Keeping an eye on inclusivity in hybrid work is also crucial. Listening to what employees want, with an eye to their lived experience, will be vital to leaders in these settings. And a focus on output, outcomes, results, and impact—rather than arbitrary norms about time spent in offices— may be a necessary adaptation in the hybrid era.

Stage one: Once your successor is announced, you will still largely run the company for two to three months to give them time to do their listening tour and sharpen their thoughts on how they want to run the company. During this time, you’ll also give them full exposure to what the role entails, share the rationale behind past decisions, discuss strengths and weaknesses of the top team and the organization at large, and warmly hand off important stakeholder relationships (for example, large customers, investors, regulators, suppliers, and community leaders). This is also when you can offer them some “live, with a safety net” learning opportunities (roles in senior staff meetings, town halls, board meetings, etcetera) so they can get a good feel for what it means to sit in the driver’s seat. For 21st-century organizations operating in today’s complex business environment, a fundamentally new and more effective approach to leadership is emerging. Leaders today are beginning to focus on building agile, human-centered, and digitally enabled organizations able to thrive in today’s unprecedented environment and meet the needs of a broader range of stakeholders (customers, employees, suppliers, and communities, in addition to investors). What is the emerging new approach to leadership? Microsoft CEO Satya Nadella stresses the importance of taking an institutional view of transitions: “My dad, a civil servant in India, always used to talk about institution builders as those people whose successors do better than they did themselves. I love that definition. I feel that if the next CEO of Microsoft can be even more successful than I am, then maybe I’ve done my job right. If the next CEO of Microsoft crashes and burns, that may result in a different verdict.” We partner with executives aspiring to become CEO – ranging from those new to the C-suite to those actively in the running – by helping them develop their skills, leadership style, and personal operating model so that they are well prepared to prioritize their efforts and demonstrate proof points that they are ready for the next level. We also work with the CEO and board to establish a rigorous succession planning process.The best chief executives know that there’s no place for ego in determining when to go; what matters is what’s best for the institution. Often there’s a natural need for the company to pivot in a new direction, but the sitting CEO isn’t the best one equipped to lead the transition. Gail Kelly chose to leave the Australian bank Westpac when she felt her customer-centric strategy was well in place and she had a successor ready who would be better suited to lead the company into a more digital future. Sony’s Kazuo Hirai felt that while he was the right person for the transformation phase of the company, he was less suited for the more stable phase to follow. Avoid being a complicit manager—for instance, if you’ve delegated a decision to a team, don’t step in and solve the problem for them. Herbert Hainer of Adidas changed ‘Outgrow our Competition’ to ‘Help athletes perform better than their competition.’

Carolyn Dewar: Many CEOs focus on getting individual leaders who are great at their roles. The excellent CEOs focus more on the dynamic between them, the psychology of the team and how they work together. There is the classic story of the US men’s Olympic basketball team who, during their preparations for the games, lost their first scrimmage game to a college team. The coach saw they weren’t gelling as a team and he let them fail, because this team of truly great players had to realize that they would need to work differently. Likewise, CEOs need to invest in the operating model of their teams. “How do we make decisions? How do we show up for one another?” US Bancorp’s Richard Davis says, “[It’s] essential. If you bring every burden to every meeting…the day [will] start to pile up on you…You just have to take everything as it is and isolate it, manage it; isolate it, manage it...People [will] start seeing that you are discipline and focused.” In a storm, look beyond the horizon.This new approach to leadership is far more effective. While the dynamics are complex, countless studies show empirical links among effective leadership, employee satisfaction, customer loyalty, and profitability. How can leaders empower employees? The book attempts to teach CEOs what they actually need to do to succeed in the role. CEOs won’t excel in every aspect of the role, rather they are excellent in some areas and do a solid if not exemplary job in the others. Sean Brown: When that allegorical boat became unstable, how did the CEOs you interviewed course-correct? The book offers an insider look at the mindsets of leading CEOs such as Mary Barra of GM, Reed Hastings of Netflix, Satya Nadella of Microsoft, and many more. More about the authors