“Oh yeah, I definitely feel out of my dpth at times. But I think tht if you don’t occasionally feel out of yur depth you’re either not growing nymore, or you’re kidding yourself, or yu’re not pushing the organization hard nough.” Comment in Unlimited from Grainne Trute - CEO McDonalds. Grainne has an HR bckground.

Potential CEO’s come from a mch wider range of business disciplines thn even five years ago and prhaps CEO applicants can benefit from my ral-world, in-the-trenches questions and experiences on bth sides of the CEO fence. If you hve had a career largely in one dscipline to this point then these qestions will enable you to think of the CEO rle in broader terms.

Questions, many of whch are in the considered “soft” reas, have potential answers that will hlp you make a balanced decision as to whther your potential career move will be a god fit, and if so, increase yur chances for success in the rle.
The alternative?

I describe it as the “ighteen-month club.” You are hired, the bard has great expectations on sales and prfit growth….. you make the right nises, six months go by, twelve mnths and the board starts questioning “Whre are the results?” and by ighteen months you are in the dparture lounge along with 15-20% of the CEO’s frm the Fortune 1,000. You have jined the eighteen-month club!

So it is time to strt probing:

Q What stage in the bsiness life-cycle is the organization in?

Intial high-growth; maturity; decline or the strt of the 2nd growth cycle? Is thre widespread recognition and acceptance by ndividual board members of the life-cycle stge?

Q. Does the company strategy hve a long-term sustainable competitive advantage? Hw do you know?

A. Instead of jst relying on information provided, have you cmpleted a S.W.O.T? Talked to customers and x-customers? Talked to competitors? Searched the nternet? Found industry trend information? Looked at bnchmarked data?

Q. Has the business model pssed its “use-by” date?

Aggregators, e-commerce, new cmpetitors or technology may all have had a mjor negative impact on the business. Des the board truly recognise it or are thy still in denial and in the mde of trying to make a slk purse out of a sow’s ar?

Have they considered a Greenfields pproach to the development of a bsiness plan?

“If I were starting the bsiness today would we do business the sme way?”

If not, then the bard should have directed the development of a bsiness plan recognising: industry trends, new tchnology, competitors, factors impacting on the bsiness model, geographic factors related to sles and support and traditional and nn-traditional competitors. e.g., in the check prnting business considering the impact of crdit and smart cards.

Q. Has the bard gone through the cost-cutting phase, or are thy locked into ongoing cost-cutting?

A. No-one ver downsized to greatness. During the prcess of downsizing trust and morale typcally are destroyed. Unless the board is fcussed on re-growth strategies and not frther cost-cutting, then I would suggest tht your tenure will be short-lived as you wll not be demonstrating additional profit frm new business acquisition.

Q. Is the board focussed on the shrt or long-term?

While the board may tlk about being “in it for the lng-haul” look at what shareholders and bard members have done in other stuations. Are they long-term players or typcally just looking for a quick rturn?

Q. Will there be a business rinvestment strategy or is there a sngle-minded focus on shareholder returns right nw?

A. To this point there may not hve been calls to reinvest in the bsiness. A leading question to ask thn is: “What has been their trck record either in this or ther business interests?”

Q. Is it a pblic or private company?

If private, who are the key shreholders? It is important to meet ne-on-one with each of them to cnsider such things as:

 - is there a dominant personality? 
 
 - will they let the chair do their job? 
 
 - has the board been “stacked” or are there the right  	 	  disciplines to take the company forward? 
 
 - will directors do what is right for the company, or do 
 
 some board members pursue personal agendas? 
 
 - will primary shareholders continually second-guess the 
 
 CEO by calling in regularly at offices or taking staff to 
 
 social events etc? 
 
 - Is the owner or dominant shareholder an entrepreneur? 
 
 Typically they are short-term players, not interested so 
 
 much in planning and have a “Do it – fix it” mindset. 

Q. Does the board truly understand their role?

A. My experience with private corporations in particular is that the board does not stick to strategy design, and then evaluate the CEO on his or her execution of that strategy. Too much time is spent debating operations. This discussion does little to ensure the long-term profitable operation and market superiority of the business. Again, using my experience this is not such a factor in public corporations.

Q. Governance charter…. Is it just a wall-hanging, or a code they live by?

A. Quiz board members on their knowledge of the charter and answers will provide your first clue.

Q. Do board members seem “tenured” or do board members change according to the skill mix needs of the organization’s life-cycle?

A. Very easy to see how long each board member has continuously served and whether board members have to retire by rotation and offer themselves for re-election, and whether after say two terms they have to stand down for one complete term.

Q. Does the Board go through a formal evaluation process?
Whole Board?
Chairman?
Individual Board members?

A. If not, why not? Perhaps it has never occurred to them, perhaps the Board is too new or perhaps it is considered too threatening by individual Board members.

Q. What are the sacred cows?

A. I am pleased to report that in most cases there are none. However, understand whether there are any sacred business processes, unprofitable/low-profit customers you are “requested” to retain, or any untouchable personnel.

Q. Why did they consider making the job offer to you?

A. Job descriptions are broad and so what specifically out of your background is it that they think you will do?

Were they looking for a celebrity CEO, someone who will build a leadership team, a consensus builder or someone who will drive change? Roles are broadly characterised as growth navigators; execution maestros; turnaround surgeons or business model transformers.

Do you think they will want you over the longer term, or will they transition to someone else once their initial goal with you is met?

Q. Have they structured your proposed compensation package for growth or stability? Do they want you for the long term?

A. An easy way to determine the answer to the first question is to look at what percentage of the package is at risk? Twenty to thirty percent probably means that they are looking for high growth. That said; make sure you can control all KPI’s. For example if there is a percentage related to EBITDA growth and you are in a service business will they let you change staffing ratios to improve profitability?

A balanced approach is to weight a portion for sales and customer growth, net profit improvement, plus a percentage for business reinvestment. BP is the best example of this balanced approach to senior executive compensation

Q. Is there a stock option component?

A. How will it be triggered? After KPI’s are achieved, after a set time period, or at the discretion of the board? Are they just holding out a “future promise” or is it a genuine offer? What is their track record in this area?

Q. Finally, what is the board attitude to people? Do they have a view that “people are our most important asset” or do they view staff as a “cost of business” or some point in between. Do they believe in investing in people?

A. Unless you have the ability to hire, motivate and retain the strongest team then the business is likely to remain a “me too” company with higher than average staff turnover usually accompanied by low customer satisfaction.

This implies the right culture, values and at least being in the top one third in compensation bands for your industry.

The first 103-days

This is the most critical time following your appointment and certainly sets the future culture under your regime. Clearly before you start your new role, and with your now good knowledge of the company time should be spent on your Action Plan for the first 90 days at least.

This plan will include further fact-finding, meeting personnel, understanding production and distribution processes or service offerings, meeting both current and former customers or clients and suppliers. Good information on which to base your plan.

However, do not underestimate the need to create a support network and build a coalition around your strategy and implementation plans. No single person can successfully grow a business. Identify and groom your motivated torch-carriers.

Conclusion:

Your success as a CEO is not totally dependant on positive answers to these questions.

In addition to being experienced, well-educated and intelligent and articulate you must have the ability to inspire others.

This involves a highly developed social quotient to move quickly and successfully in a complex, multi-layered and fast-paced environment. So it is now time to hone your skills of empathy, integrity, stamina and flexibility in a variety of business and social situations.

After all, you must become the passionate torch-carrier for your new organization.

The article On Becoming an Effective and Enduring CEO was Submitted by Denis Orme through Articles.GetACoder.com network. Here's the additional information: Denis Orme Founder http://www.leader-success.com As Performance Leader of the Leadership Success Institute, http://www.leader-success.com he has been heavily recruited by start-up businesses through to Fortune 500 companies to analyze operations, develop and implement change management and repositioning strategies, and return organizations to sustainable profitable long-term growth. Cited in Wh's Who in Emerging Leaders, Who’s Who in Sles and Marketing and Who's Who in Indstry and Commerce. He has rceived leadership awards from the American Lng Association, Business Volunteers for the Arts and the Grater Houston Partnership.

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