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Are the CEOs and Chairs jobs getting harder and if so, how can leaders cultivate resilience and thrive? These were questions discussed at our latest Savannah lunch with Partner Tim Clouting and leading chairs, CEOs and investors from across the travel, leisure & hospitality sectors. Given the challenges of the last few years, what has changed? How do they cope?
While the group recognised the significant potential benefits associated with attaining a CEO or chair position – wealth, stature and legacy – it was also accepted that now more than ever, these are not jobs for the faint hearted. One serial Chairman encapsulated it nicely with a piece of advice he received on
assuming his first CEO role:
This succinctly defines the roller-coaster ride, highs and the lows of the all-encompassing role of being a CEO today. Our guests shared their perspectives on the key challenges of the top job as well as thoughts on how to cope. Five key themes emerged:
A chronic lack of transition support
One guest suggested that business should take some inspiration from elite sport. “Professional athletes are surrounded by the very best coaches, science and support structures to ensure that they are put in the best possible position to succeed”. He remarked that in business “we are still acting like jolly amateurs”. He believes that organisations are often satisfied for the new CEO to “give it their best shot” rather than surrounding them with a carefully curated support structure. With failed executive transitions costing millions, could the rigour and sophistication of transition support be falling short? The same guest felt that part of the issue is a reluctance by CEOs and other senior executives to ask for help, for fear that it will be seen as weakness.
The lonely step up; Chairs (and mentors) can help
One CEO of a private equity (PE) backed business considered the solitary nature of their role. They described the “semi-independent chair you find in PE environments as providing something of an antidote” and how “when this doesn’t exist the [CEO] role can be even more lonely”. Some other guests agreed that “without a chairman buffer (in PE), it can become very tough very quickly for the CEO. You’re just too close to the owners.” Several guests talked about the need to “make some friends”, people whose judgement you trust and ideally who have previously been through similar situations, to reduce feelings of isolation.
The precious resource of energy
The pressure and complexity on today’s leaders is immense, and seemingly increasing with each passing year. There is no denying the potential wealth and stature that come with leadership roles, however some of our guests felt that with the added pressures of the last few years, particularly across travel, hospitality and leisure, there are less and less people who have both the technical capability and the necessary levels of energy and desire to take on the challenge. We previously referred to this quote from a founder “If you don’t like choosing between horrible and cataclysmic, don’t become CEO”. This caution feels as relevant today as it did a few years ago.
Previously we’ve discussed the benefits of stepping away and taking time for other interests for recharging energy reserves. While there are still cases of senior leaders fearing that their commitment or stamina will be questioned if they take time for themselves, in general, wellbeing is becoming more of a priority. More and more organisations understand that ensuring that your people, especially the exec team are well, beyond being the right thing to do, enables sustained performance.
Assembling your A-Team
There was widespread agreement across our group that CEOs must invest in assembling the best top team they can afford and then give them the space and air cover to perform. PE guests around the table echoed the positive impact that talent investment can have on rapid value creation. A chair guest talked about the need to accept that on moving to become CEO “you will know less than the people around you”. Often a new CEO has moved from leading a function where you are used to knowing more than anyone else about your space. He remarked that “you had better get comfortable with being uncomfortable very quickly.” The importance of creating a strong board dynamic was also discussed. If the board is dysfunctional or does not challenge the status quo, if there isn’t an environment where people can be openly challenged, prodded and probed, then it can begin to erode performance quickly. Chemistry is incredibly important.
The difference of serving as CEO under private equity ownership
One CEO who had recently moved into a private equity owned company reflected on the difference with his previous plc experience. He had found the lack of “decision by committee and excessive governance a breath of fresh air and incredibly liberating”. The same CEO noted that when times were good PE was a great environment to work in, however in more challenging times, this could change very quickly.
Another CEO shared that when working in PE, there’s typically only one key stakeholder to manage, whereas when CEO of a plc, there can be “hundreds of people telling you when you’re doing a bad job.”
One chair gave an interesting perspective on what makes a good CEO in a private equity backed business. “The best are control freaks. People who are all over the detail, all the time. They don’t care if they’re not liked, and they’re usually difficult to work for. It’s these individuals that typically deliver the best results in a relatively short period of time. ” This view was hotly debated.
Whenever I meet a successful CEO, I ask them how they did it. They all say “I didn’t quit.” Sometimes, particularly if there is a disconnect between values, the role of a CEO becomes untenable. Outside of that, while stressful, overwhelming, and hugely frustrating at times, the role of CEO was also extremely satisfying and fulfilling. Like parenting, no matter how much you study it, observe it in others, ask for advice, prepare for it or convince yourself you’re ready for it – there is simply no substitute for doing it.