Weekly Business Insights from Top Ten Business Magazines | Week 298 | Leading & Managing | 1

Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 298 | May 26 – June 1, 2023.

Staying ahead: How the best CEOs continually improve performance

By Carolyn Dewar et al., | McKinsey & Company | May 25, 2023

Listen to the Extractive Summary of the Article

If you’re a CEO who started strong and are now riding high three to five years into your tenure, you did all the right things early in your role: set a bold vision, pursued a short list of big strategic moves, put the right talent and accountability mechanisms in place, gained the trust of your stakeholders, and focused your time on what mattered. As a result, you’ve created significant value on your watch. Your peers in other organizations who didn’t get as strong a start are at worst being ousted from the role and at best struggling with the dreaded “hockey stick” syndrome, where a CEO who forecasts outsize improvements finds, over time, that little progress has occurred and that the desired uplift remains elusive.

On one hand, this is exactly where you hoped you would be; congratulations. On the other hand you’re about to face your toughest challenge yet: complacency. Said another way, becoming a successful CEO is hard, but staying successful is even harder. Research confirms this challenge: more than half of the companies on the Fortune 500 list in the year 2000 went bankrupt, were acquired, or ceased to exist in the following 15 years.

The reason this happens can be more emotional than intellectual. In the middle years of your CEO journey, you’re now the author of the organization’s status quo. It’s your plan. This makes it far more difficult for you to judge the business dispassionately and to disrupt what’s working. Also, with more success comes an increased confidence in your judgement.

Like everything about the CEO role, the dynamics at play are as much about the institution as they are about you. When traditional competition is fading in the rearview mirror and emerging competitors are gathering their forces, it becomes increasingly difficult to define what winning looks like. Meanwhile, that license you had early on to shake things up has long expired, and your employees have become comfortable working in the new ways you introduced. Unless you’re again the prime mover of change, the organization will become complacent.  So how do CEOs avoid complacency and sustain high performance through the middle years of the role? Odds can greatly be increased by the following:  enhancing your learning agenda, taking an outsider’s perspective, collaboratively defining the next S-curve, and future-proofing the organization.

3 key takeaways from the article

1. If you’re a CEO who started strong and are now riding high three to five years into your tenure, you did all the right things early in your role: set a bold vision, pursued a short list of big strategic moves, put the right talent and accountability mechanisms in place, gained the trust of your stakeholders, and focused your time on what mattered. As a result, you’ve created significant value on your watch.
2. On one hand, this is exactly where you hoped you would be. On the other hand you’re about to face your toughest challenge yet: complacency.
3. How do CEOs avoid complacency and sustain high performance through the middle years of the role? Odds can greatly be increased by: enhancing your learning agenda, taking an outsider’s perspective, collaboratively defining the next S-curve, and future-proofing the organization.

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Topics:  Leadership, Complacency