We all know that CEOs play a unique role in an organization. They are responsible for linking the organization to the outside world, setting up and delivering on the vision, strategy and goals, leading the executive team, and defining the culture, all while ensuring that the company thrives. Piece of cake.
CEOs also play an important role in transformations, holding the ultimate responsibility for its success or failure. Even if the organization has a Transformation Officer, the accountability still sits squarely with the CEO. They are the final decision maker within the company and have the entire workforce constantly looking to them for guidance.
As a matter of fact, lack of commitment from the CEO is the root cause of the great majority of transformation failures. It almost guarantees failure because hard decisions won’t be made in a timely manner, the most pressing issues won’t be promptly addressed, and employees will feel like embracing the transformation is a choice rather than a necessity.
I am not questioning CEOs’ commitment to their companies; much on the contrary, I know that they want to be wildly successful. Sadly, there are a number of ways in which they undermine their own transformations.
Failing to engage employees in the vision. I get it: crafting a compelling transformation story is far from trivial, and so is the amount of time CEOs and the executive team need to invest to secure buy-in from their employees. However, this is necessary for success. CEOs may think the story is good enough, but it may not resonate with employees. CEOs may think that the organization “surely got the message” after a few presentations, but buy-in takes a lot more time.
Hoping to be liked by key leaders. Some CEOs resist making unpopular decisions because of their desire to be liked by the key leaders and the organization. Worse yet, many CEOs demonstrate a reluctance to let go of leaders who are not contributing, especially when there is a shared working history involved. The job is not a popularity contest; it is about ensuring that the company stays relevant.
Lacking alignment with the transformation team. The transformation team communicates “potato” and the CEO says “tomato”; the transformation team goes left and the CEO goes right. Whatever the miscommunication may be, employees will follow what the CEO says and does. When that happens, employees also start questioning the transformation team, making it much harder for them to drive real change.
Reversing decisions made by the transformation team without its involvement. The work is progressing well, and then, out of nowhere, the transformation team learns that the CEO has decided to undo a decision already made because one of his most trusted lieutenants convinced him that was the right thing to do. Although it is the CEO’s prerogative to overrule and reverse decisions when needed, there is a right way of doing so. The moment the CEO does that without first discussing it with the transformation team, they make it clear to the rest of the organization that they will succumb if pressed the “right” way and by the “right” people.
Constantly changing priorities. The world around us moves at breakneck speed, so of course transformation efforts need to adjust accordingly. But CEOs can’t keep changing priorities all the time. If the vision and the plan are sound, they should give the team space to make change happen. When CEOs live in constant fire-fighting mode and let that dictate their agendas, it is impossible for their teams to focus on the long term.
Overreacting to issues. Transformations are hard, complex, and lengthy. A lot will go wrong before it goes right. CEOs should expect to make adjustments along the way and “buckle up” for the journey to model how they want their teams to behave when faced with adversity. If the CEO abhor failures, they will send a clear message in the organization to be extra conservative, crushing the transformation’s chances of success. Or worse yet: they will be left in the dark when things go wrong.
Cultivating a culture in which change can’t flourish. On top of extreme conservatism, CEOs must rid the organization of passiveness, reactiveness, and fear. It doesn't matter who is at fault for the current situation, it matters what people will do going forward. CEOs should encourage accountability/ownership, trust/transparency, and open mindedness/curiosity in their teams to create the foundation for a culture where change can happen. Otherwise, the transformation will look good only on paper.
Missing key meetings. Of course, I am not talking about one or two meetings, but about constant absence in key meetings. This is wrong on so many levels. If CEOs won’t take the time to fully participate in meetings to deliver on their vision, why should employees care?
While this is a tall order, it is a requirement for success. In this light, the dreadful 70% failure rate of transformations becomes less surprising.
CEOs don’t need to be super humans; they need to be super leaders.
Some CEOs opt to “play it safe” and delegate the accountability of the transformation - and then blame and replace the leader who couldn’t deliver on their vision. This is undoubtedly the wrong thing to do, and boards should not allow it.
CEOs need to face their fears and embrace the transformation process fully. Yes, transformations are risky, but success in those efforts are essential to the survival of the company. They need to demonstrate an unwavering commitment and accountability toward the transformation effort. And they need to stop sabotaging their own transformations with behaviors that send the wrong message to the company.