One of the most valuable assets that everyone has access to is the mistakes you have made—if you can honestly assess the lessons they can teach you and apply them the next time you face a comparable situation. This principle is particularly true for CEOs, whose mistakes can hurt the future of their company, their employees and customers and even their communities.
The partners of Newport Board Group have decades of experience running organizations large and small. All have been successful –but all have made mistakes. We asked them to reflect on what they think are the most common mistakes that CEOs make.
Ferey is a Newport partner in Northern California whose experience, along with management consulting and investment banking, includes serving as president of a company that develops advanced optical sensing solutions for the aerospace, energy and medical devices markets.
“Some CEO's assume control is the best way to achieve goals or that all they need is more capital. A small portion of a large pie can be more than a large portion of a small pie. Vesting more people in success can grow a company much faster than traditional command and control.”
Bill is a Newport partner in Denver who has deep expertise in building and running industrial manufacturing and construction companies.
“CEOs need to see and convey a vision for their employees, their clients, their investors and lenders. The inability of a CEO to create inspiring images of the company, its products and its goals reduces the productivity of the assets the CEO manages. And don’t forget creating an inspiring vision of the company as a great place to work. When an organization sees and feels its mission, its successes become self-fulfilling—so the CEO doesn’t have to engage in meticulous orchestration.”
Woody, a Newport partner in Denver, is an experienced executive who has served as CEO of several information technology companies and also as a CIO who has innovated new models.
“The biggest mistake a CEO can make has to do with the timing of making decisions. CEOs must analyze the facts at hand as thoroughly as possible. But sometimes you have only seconds to do so—these are “battlefield decisions.” Other times you have months to reflect before you make up your mind. At some point the opportunity cost of taking more time to make a decision will exceed the benefit to be gotten by further deliberation.”
Richard, a Newport partner in Phoenix, has had a 30 year career as a leader of for-profit and non-profit organizations. Most recently he was the Founder, Chairman and Executive Director of the Arizona Business Coalition on Health.
“CEO's can experience the same type of near-worshipful treatment by others as do professional athletes, rock/rap/country music stars, movie stars, etc. Even the most humble and level-headed person can become arrogant after a few years of everyone telling him or her how smart and wonderful they are. Always be true to who you are and remain grounded. Always be asking questions and never stop listening and learning.”
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Billie is a Newport partner in the Pacific Northwest who has been Executive VP and CIO of TrueBlue Inc. (NYSE: TBI) the largest industrial staffing firm in the U.S.
“I think a combination of passion and vision leads too many CEOs to be unrealistic about the capacity and capability of the organization. Failure to set big goals isn’t usually the problem. The problem is not addressing the gaps between the target and the current state--so that people can believe that the company’s goals are ultimately achievable.”
For a decade Julie, a Newport partner in Denver, held high level executive roles in the Russian and European business units of May Kay.
“This may sound like a cliché but it’s really the truth: the biggest mistake CEOs make is not surrounding themselves with the right people. Assuming that they do surround themselves with the right people, the second biggest mistake is not listening to them or taking their advice. The third biggest mistake is not carrying out their advice.”
Since 2000, Caleb has been a Board Director with Ensign-Bickford Industries, Inc., a portfolio of manufacturing companies whose products include pet foods, solutions for aerospace and defense, life science diagnostic testing, specialty chemical processing and commercial real estate.
“CEOs get in trouble when they become emotionally attached to a deal, an employee or an initiative without putting in place objective criteria to review whether what they are doing is really working. A close second: having too many direct reports.”
The next article in this series will provide further insights--from our partners’ experience on the front lines of management—about the mistakes that CEOs are most likely to make.
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