CEOs may be successful, but they’re also human. And being human means making mistakes.
Some mistakes that a chief executive can make, however, are worse than others. They can doom the CEO’s strategy, damage the company, waste resources or needlessly create new problems or ill will.
1. Taking too long to fire a direct report
Leadership consulting group Heidrick & Struggles asked 60 CEOs what they would do differently if they could start over. The most common regret expressed was not acting more quickly to get rid of a direct report who wasn’t working out.
A high-functioning, cohesive executive team is critical to any CEO’s success, and therefore the company’s success. So it becomes a liability to keep a team member on board who isn’t a good fit.
Yet some CEOs will delay doing what they know in their gut they should do. Their reticence can stem from guilt because they brought the person on or they have a long history together. Or they worry that such a high-profile dismissal could raise concerns among investors and employees.
But just as often it’s their savior complex coming into play.
“CEOs convince themselves ‘I can save this person. If I just have enough time to work with them, I can turn them around,’” said Mark Nadler, principal and cofounder of leadership consulting firm Nadler Advisory Services.
2. Losing touch with front-line employees
If CEOs become insulated from middle managers and customer facing employees, they won’t have all the intelligence needed to make critical decisions.
“They’re the first to understand what’s happening in the marketplace that could be a threat to you,” Nadler said.
Plus, as companies become more decentralized, innovation often happens in the field, said Steve Morse, a senior member of the board and CEO advisory practice at Russell Reynolds Associates.
Morse recommends CEOs spend a lot of time in the field in their first 18 months. What’s more, the CEO and all team managers must actively foster an open culture that welcomes ideas and criticism from employees. And they should have a system – including surveys – by which to regularly collect and communicate that information to the corner office.
3. Not staying in your company’s lane
CEOs may create plans, objectives and financial goals. But they will fail if they haven’t honestly assessed what their companies do at their core, where their companies should go and realistically what it will take to get there.
For instance, when changing consumer tastes make a company’s products seem less relevant, the temptation for a CEO may be to grasp for silver bullets, like acquiring a company with a product that doesn’t quite match the core business.
“CEOs may say yes to too many initiatives and give approval to too many budgets and they dilute the company,” said Ron Carucci, co-founder of Navalent, which works with CEOs who are pursuing transformational change.
Instead, Carucci said, “step back and ask who your loyal customers are and what needs of theirs you can still meet. Who are you? Be that.”
4. Being unaware of your pathologies
Everyone brings some emotional baggage to work: neuroses, anger, self-contempt, paranoia, feeling like an imposter … the list is long.
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But chief executives who don’t figure out what their emotional triggers are can do a lot of damage.
“As a CEO you can hurt a lot of people. Your pathologies will almost always play a role in a bad decision,” Carucci said. “If you’re moody as a middle manager, you’ll cast a huge cloud over the company as a CEO.”
And if a CEO is a closet narcissist – or simply is convinced that he always knows best – he risks alienating his executive team, said executive coach and psychologist Cindy Wahler.
So whether a CEO is taking credit for their work or simply disregarding their advice, it creates a morale and retention problem because the c-suite executives want to help shape the future of the company.
“They’re there for their expertise. If they’re not included, they won’t feel valued,” Wahler said.
