CEO behavior has huge impact on the entire organization

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What do you think goes on among a typical group of senior managers? Do you envision a group of smart, hard-driving executives engaged in open dialogue about the strategic issues affecting the bottom line of their company? Or, do you imagine a group of fifty-somethings with a mortgage to pay, kids in college, with a lot to lose if they don’t play along with the CEO? The reality is often somewhere in the middle. And if the organization is lucky, it has a CEO who realizes that his or her behavior determines, to a large degree, which way the pendulum will swing.

Regardless of the size of the company, there are critical cause and effect behaviors that CEO’s need to be aware of: 

Don’t punish bad news.  

Leaders who go ballistic when things go south usually don’t realize how much their emotional volatility shuts down communication. Their management team will withhold negative events in the hope they can fix the problem before the leader hears about it. They will waste endless hours massaging data, wordsmithing memos, and rehearsing presentations until they are sanitized and guaranteed not to cause a stir. The problem, of course, is that the truth is always masked and issues go unresolved. Then, voila! The CEO learns about something too late, goes ballistic, and starts the vicious circle again. 

Don’t trust the "Open Door" policy.  

Put yourself in an executive’s shoes. He has a lot of issues he probably should talk to the CEO about but he doesn’t want to bother the CEO because he is very busy. He knows he is expected to solve problems on his own, so he doesn’t want to look inept—or worse—needy. This can happen at every level of an organization when a leader relies on the Open Door to hear about issues. It’s a risky—no—lazy approach. Leaders need to get out of their office and walk around, have lunch with employees, have fireside chats, visit sales staff in the field and be visible and accessible. 

Invite challenge and debate.  

Unless a leader encourages this, he or she may not get it. It’s often necessary for the CEO to be direct about it, "Let’s make sure this will work. I want to hear all the reasons why it won’t so we’re not surprised later." "I’m no expert in this matter. Charlie, you’ve seen how our distributors have reacted to new initiatives in the past. What are we missing?" Whether the leader is intimidating or not, direct reports will often hold back without a direct invitation. 

Ask advice from a wide spectrum of excellent contributors.  

Leaders can run into trouble when they only rely on a few key advisors. Not only will the advice be limited in scope; it will create an unhealthy dynamic within the leadership group. For instance, executives and managers will quickly learn who is in the inner circle of confidants. If they are on the outside, they will resent being excluded, which may cause them to distance themselves from the "in" crowd and even withhold information from them. Political jockeying will begin, as people maneuver to gain access to the king. 

Beware of rewarding loyalty over competence.  

We all see what happens in politics. The loyal one seems untouchable and is viewed through the rose colored glasses of the CEO. Because the loyal one has been granted this special safety, he or she would never risk jeopardizing this situation by challenging his or her benefactor. Unfortunately, this is also seen in private organizations. For example, successful entrepreneurs sometimes aren’t objective about the employees who were with them from the beginning, when times were tough. If the loyal one is a poor performer, good employees will become frustrated with this cog in the wheel of effectiveness and will lose respect for the leader. Great performers will not play on an uneven field and may take their ball to a company where competence is rewarded more fairly. 

Beware of the outside ambassador role.  

Some CEO’s are so busy visiting customers, active in community affairs and shmoozing at the club; the mother ship begins to drift. Senior leaders have to make decisions without a CEO who can make the final decision and hold everyone accountable. Without the ultimate decision-maker, dissension can break out and politicking can eat up vast amounts of time. The vision becomes fragmented and momentum stalls. Every ship needs a captain.  


Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 354-9500, mailto:info@joanlloyd.com, or www.JoanLloyd.com 
 
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