Adopting the Mindset of a CEO

Harvard Business Review recently featured an article entitled “How Managers Become Leaders.” The article’s main premise follows: Few leadership transitions are as challenging as the move from running a function to running an entire enterprise for the first time. The focus of leadership passages changes and require them to develop new skills and conceptual frameworks.

Michael Watkins, author of the best-selling “The First 90 Days: Critical Success Strategies for New Leaders at All Levels,” remarks the transition into an enterprise leader requires shifts in the mindset of the leader. He proposes Seven Seismic Shifts. Here there are:

SPECIALIST TO GENERALIST:  Understand the mental models, tools, and terms used in key business functions and develop templates for evaluating the leaders of those functions.

  • Initially, the new CEO falls into a classic trap of overmanaging the function he or she knows well and undermanaging others due to lack of comfort level and confidence.
  • CEOs’ need to
    • Make decisions that are good for the business as a whole
    • Evaluate the talent on their teams.
    • CEOs must recognize the managerial subcultures.
    • Leaders must speak the language of all functions and translate for them when necessary.
    • Must know the right questions to ask the right metrics for evaluating people (understand what excellence means for each function)

ANALYST TO INTEGRATOR: Integrate the collective knowledge of cross-functional teams and make appropriate trade-offs to solve complex organizational problems.

  • Must manage and integrate the collective knowledge of those functional teams to solve important organizational problems.
  • Difficult initially to balance the competing demands:
    • E.g, Sales and Marketing VP wants to aggressively go to market with a new product, while the VP of Operations worried that production couldn’t be ramped up quickly enough to meet the sales staff’s demand scenarios.
    • Focus is less on analysis and more to do with understanding how to make trade-offs and explain the rationale for those decisions.

TACTICIAN TO STRATEGIST: Shift fluidly between the details and the larger picture, perceive important patterns in complex environments, and anticipate and influence the reactions of key external players.

  • Being tactical is seductive being immersed in the myriad details of the business
  • Must adopt a strategic-mindset. But, how?
    • Level Shifting: ability to move fluidity among levels of analysis – to know when to focus on the details, when to focus on the big picture, and how the two relate
    • Pattern Recognition: ability to discern important causal relationships and other significant patterns in a complex business and its environment – that is, to separate the signal from the noise.
    • Mental Simulation: ability to anticipate how outside parties (competitors, regulators, key members of the public) will respond to what you do, to predict their actions and reactions in order to define the best course to take.

BRICKLAYER TO ARCHITECT: Understand how to analyze and design organizational systems so that strategy, structure, operating models, and skills bases fit together effectively and efficiently, and harness this understanding to make needed organizational changes.

  • Many executives commit malpractice without understanding the dynamics of the people side of change; few executives get any formal training in this domain
  • Must become responsible for designing and altering the architecture of their organizations – its strategy, structure, processes, and skill bases. To be effective organizational architects, they need to think in terms of systems.
  • Invest in executive education programs where they teach organizational change

PROBLEM SOLVER TO AGENDA SETTER: Define the problems the organization should focus on, and spot issues that don’t fall neatly into any one function but are still important.

  • Managers are promoted to senior levels on their ability to fix problems; as CEOs, they must focus less on solving problems and more on defining which problems the organizations should be tackling
  • Must perceive the full range of opportunities and threats facing his business, and focus the attention of his team on only the most important ones.
  • Must identify “white spaces” – issues that don’t’ fall neatly into any one function but are still important to the business, such as diversity.

WARRIOR TO DIPLOMAT: Proactively shape the environment in which the business operates by influencing key external constituencies, including the government, NGOs, the media, and investors.

  • Must devote a lot of time influencing a host of external constituencies, including regulators, the media, investors, and NGOs.
    • E.g., most likely, the CEO or enterprise leader will be bombarded by requests such as “could he participate in industry or government forums sponsored by the government affairs department?” “would he be willing to sit for an interview with an editor from a leading business publication?” “could he meet with a key group of institutional investors?”
    • Leverage the tools of diplomacy – negotiation, persuasion, conflict management, and alliance building

SUPPORTING CAST MEMBER TO LEAD ROLE: Exhibit the right behaviors as a role model for the organization and learn to communication with and inspire large groups of people both directly and, increasingly, indirectly.

  • Moving to center stage under the bright lights.
  • Many become shocked by how much stock people place in what the leader says.
  • The enterprise leader’s influence is magnified as everyone looks to him for vision, inspiration, and cues about the “right” behaviors and attitudes.
  • Personal styles and quirks of senior leaders are infectious

 

Concluding Thoughts: One of the paradoxes of leadership development is that people earn promotions to senior functional levels predominantly by being good at blocking and tackling, but employees with strategic intent may struggle at lower levels because they focus less on the details.

Becoming an enterprise leader requires you to transition from left-brain analytical thinking to right-brain conceptual mindsets. Reflecting back, one enterprise leader said, “the skills that got you where you are may not be the requisite skills to get you to where you need to go. This doesn’t discount the accomplishments of your past, but they will not be everything you need for the next leg of the journey.”

 

*Summarized and Adapted from HBR “How Managers Become Leaders”