Core Competencies of the CEO

What is required in a CEO in order to be successful? What enables the CEO to lead their company and drive profitability and company value in times of economic downturn?

CEO turnover continues to rise dramatically and this is especially apparent in times of market slowdown. CEOs are in office for a shorter and shorter time. A Booze Allen study in the 2,500 largest market cap companies has shown that in a decade, the average tenure has been cut by more than 2/3rds from 9.5 years to 3 years and the turnover is less and less at the CEO’s choosing. The non voluntary reasons for leaving have skyrocketed from 27% in 1995 to 70% in 2006. Now in 2008 with the crisis in our economy, the rates have grown even higher.

The reasons that CEOs are forced to leave are typically because they are weak at some of the necessary competencies and often have not been evaluated on them when they assumed the job. The difficulty in the CEO position is that a CEO needs to be fairly well rounded in a wide range of competencies. Flat spots will show up and can be disastrous.

What does a well rounded CEO look like? It goes without saying that leadership is a core competency and here are 10 additional best practice core competencies for CEOs:

1. Vision - The CEO, possibly with the help of his executive team, creates and communicates a compelling and inspired sense of core purpose. This is based on the vision of the future, not the reality of today.

2. Strategic thinking- Once the vision is created and understood, it is essential to put together a workable plan to get from current to the desired goal. The effective CEO can see ahead clearly and anticipate consequences and trends accurately, has broad knowledge and perspective and can translate this into a plan based on key strategies that will provide long lasting progress for the company.

3. Culture – The CEO is responsible for creating and maintaining the desired culture and environment. If vision is where the company is going, culture and values tell how the company gets there. Values outline acceptable behavior. Work gets done through people, and people are profoundly affected by culture. Culture is built in many ways, and the CEO sets the tone. His every action—or inaction—sends cultural messages.

4. Communication. This skill goes further than being able to articulate the company's values and vision. It is about aligning people to the right direction and the specifics of their role in driving the business forward.

The CEO must communicate effectively not only internally but externally too with the Board, the financial community, customers, suppliers and the community. Some may argue that effective communication with the Board is the primary core competency. Weakness here is certainly going to be trouble.

5. Building an effective executive team - Getting a management team and different functional areas in concert and working together is an important skill. The CEO's responsibility is to manage the business in such a way that departments and individuals work together to fulfill the vision. That requires putting the right team together, motivating them and providing development opportunities so that they grow as the business grows and they can handle increased responsibility. A CEO needs to be focused on how to optimize people.

6. Business acumen - The CEO must have the following attributes:
- Knowledge about trends, practices, and policies affecting the industry and business.
- A firm understanding of competitors and a good grasp of effective strategies and tactics that work in the marketplace.
- Continuous learning: A quick, relentless, and versatile learner. Can analyze both successes and failures and learn from the experience.
- Ability to sift through vast amounts of information, solicit opportunities and possibilities, and communicate effectively to others.
- Ability to blend intuition with analytical skills.

7. Flexibility and handling risk - The CEO has to embrace ambiguity and uncertainty, coping with and embracing change and using it to the advantage of the company. They are able to act without having the total picture and able to adapt to dynamic environments with ease and speed. CEOs take and manage appropriate risks and use them to the organization's advantage.

8. Customer focus - CEOs have a clear understanding of customers' needs, preferences, interests, timelines and decision-making criteria. Focusing on meeting those needs and doing so profitably means success for both the company and the customer. Long-term customer satisfaction builds loyal, repeat customers.

9. Financial acumen. While much of this often falls to the CFO, the CEO must have solid financial acumen, such that they understand the key leverage points in the Income Statement and the Balance Sheet as well as the critical aspects of ensuring short-term cash flow and long-term profitability. It is often said that cash is king and certainly cash flow is key to success.

10. Use of current Best Practices. This does not mean jumping on fads but rather the ability to capitalize on technology, outsourcing, managing the remote work force, and social networks for example. Included in this would be identifying and using resources such as specialists, consultants, etc. The great CEOs have always been able to bring in the right people at the right time to help drive profitability.

The CEO’s job is not an easy one. It is complex and calls for multiple skills. As you review the list above, how well do you meet the criteria? How does your CEO?

We can help. Contact us for best practice profit drivers from the above set of CEO Core Competencies. We can bring the earlier articles on this site to life and make the impact specific for you. See number 10 above again.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Newton’s Unpublished Laws

Everyone is working very hard these days and the pressure is intense. Take a moment and appreciate some humor. Studies show that if you can find a laugh each day, not only will you live longer, but you will enjoy your life much more.

I found this on several blogs in slightly different forms. I suspect that Newton wrote these after he was hit in the head by the apple.









1. LAW OF QUEUE:
If you change queues, the one you have left will start to move faster than the one you are in now.
2. LAW OF TELEPHONE:
When you dial a wrong number, you never get an engaged one.
3. LAW OF MECHANICAL REPAIR:
After your hands become coated with grease, your nose will begin to itch. In the kitchen this applies to handling flour, meats and anything else that covers one's hands
4. LAW OF THE WORKSHOP:
Any tool, when dropped, will roll to the least accessible corner ( a bit related to the law of entropy).
5. LAW OF THE ALIBI:
If you tell a friend you were late because you had a flat tire, the next morning you will have a flat tire.
6. LAW OF THE RESULT:
When you try to prove to someone that a machine won’t work, it will!
7. LAW OF BIOMECHANICS:
The severity of the itch is inversely proportional to the reach.8. THEATRE RULE: People with the seats at the furthest from the aisle arrive last.
9. LAW OF COFFEE:
As soon as you sit down for a cup of hot coffee, your boss will ask you to do something which will last until the coffee is cold.
10 LAW OF THE BATH :
When the body is immersed in water, the telephone rings.
11 LAW OF ENCOUNTERS:
The probability of meeting someone you know increases when you are with someone with whom you don’t want to be seen.

Have a great day. Smile at someone and enjoy their return smile.

John



John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

10 Steps to Implementing Best Practices Cost Cutting

Your company may have completed the first round of cost cutting. Now what??? Unfortunately, just cutting costs isn’t the key. It is cutting the right costs and having the company be able to continue to progress.

Very few companies actually took the time needed to update their strategic business plan before they cut. The pressures were on and action had to be taken - they thought. Many took a cursory glance at the plan, but most didn’t review it in depth. As a result, these companies have made cost cuts that in many instances will have the opposite effect of what was intended on revenues, operations, the employees and the projects underway. What seem to be small cuts in one department can totally undermine the effect of another department.

Other companies reviewed their plans and updated them to reflect the current economic situation prior to making the first round of cost cuts. However, many are finding themselves with the same list of projects and initiatives as before. But with fewer resources to support them. It is difficult to kill projects.

Yes, there are some companies that had prepared in advance for the downturn and had programs in place at reduced spending levels to address the needs. Congratulations to them. They will do well.

However, if your company is part of the great majority and is in the first two groups, here are some best practice steps to cost cutting and staying alive.

Step 1
In all cases it is critical to start with your business plan. Review the complete business plan with the entire executive team. Make certain all understand the direction of the company and what are the high leverage items that are necessary to achieve the goals. These elements need to be correct before you should proceed.

Step 2
Review all of your current operations and staffing. Determine what is critical versus what has always been or what is nice to have.

Step 3
Prioritize all of your basic business operations that are essential to keep things running. Remember that this is cut back time and you want to ensure that you are cutting the right elements.

Step 4
List all of the projects and initiatives currently underway and upcoming. Determine the resources required, the benefit expected and the timing of resource requirement and benefit delivery.

Step 5
Prioritize all of the projects that were identified above. Realistically, there are only going to be three or four major projects that will make a significant difference to the results.

Step 6
Determine what can be delayed or cancelled without dramatically hurting revenue or customer relations.

Step 7
Allocate financial and human resources to the highest priority projects and to those the essential business operations.

Step 8
“Collect and pool” all of the remaining resources. If the resource isn’t being required, determine if some training can make that resource substantially more effective to you! If so, invest in the training, and then reassign the resource to a high leverage project.

Step 9
Review all of the operations and projects to determine ways that they can be accomplished with lower resource requirements. This is often a step where an outside resource can be extremely cost effective. Take the resources that are freed up and add them to the pool.

Step 10
Take the cuts now. The review of the strategic business plan, the prioritization of operation requirements and projects and the assigning of required resources enable the company to identify further possible reductions in costs and expenses without undermining the business.

If you are about to undertake cost cutting measures for your company, we can help you. We have a strong track record of success with many companies.

“The best investment we made at our company was bringing in expert outside help. The speed at which everything was accomplished and the ROI on the investment was significant.”
Robert Mander - CEO
Make contacting us Step 1.

Thanks.

John
John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Finding and Retaining Top Talent

Proper staffing constitutes 95% of the success of any company, yet few managers have ever been trained in how to do it. In today’s turbulent times, even fewer have the experience or the expertise. That is unfortunate, since with the staffing cut backs by many companies and the dissatisfaction at many others, there is a pool of top talent that could be available.

How do you know who and what to look for in this pool? Once you get them, how do you keep them?

It may seem simple, but it isn’t. It takes a great deal of thought and experience to be able to do it well. If your company doesn’t have this expertise in house, you would be well advised to make the investment and bring it in on a temporary basis. You will benefit from the assistance greatly.

Best practices would suggest these are the critical elements:
* Fully understanding the company’s strategic plan and the human capital needs to achieve it.
* Creating the right organizational design to meet the strategic plan.
* Identifying the skills, now and in the future, required to deliver the plan.
* Identifying the prime sources of talent with those skills.
* Strategically determining the “find, fill and fire” or “find, develop and keep” strategy.
* Selecting criteria for retention.
* Having a process that facilitates the valuing of prospects.
* Selling the company and setting expectations during recruitment.

Once you have the top talent, then what? How do you keep them?

Widespread research suggests that people do not leave organizations; they leave their managers. The implication of this finding is that managers who are respected and seen as supportive of the people who work with them are indispensable to successful organizations. Without them, competent people will leave their current organization in search of better treatment. The resultant costs of recruitment, engagement and subsequent retention can be enormous. Less tangible are the indirect costs associated with the loss of corporate intelligence and the impact on morale.

The characteristics of individuals deemed to have been exceptional managers:
-passionate
-have vision
-caring
-treat people supportively
-make work fun
-challenge people to be their best
-provide lots of feedback
-listen intently
-encourage teamwork

Traditionally, these skills have been labeled, somewhat pejoratively, as the "soft skills".

Managers who refine these skills will be seen as more authentic by those they lead. The outcome will be more people who feel that they are respected and valued by their managers. Under these conditions, people are more likely to be fully engaged in their workplace and to contribute their maximum effort for their manager. They are also less likely to shop the market for other opportunities.

Effective managers are indispensable to successful organizations. How do you stack up against these qualities? How do your executives and managers stack up? If you are having trouble attracting and retaining key employees, this may be the reason.

We can help you. Contact us to find out how.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management