| "Oh yeah, I definitely feel out of my depth at | | | | members on their knowledge of the charter and |
| times. But I think that if you don't occasionally feel | | | | answers will provide your first clue.Q. Do board |
| out of your depth you're either not growing | | | | members seem "tenured" or do board members |
| anymore, or you're kidding yourself, or you're not | | | | change according to the skill mix needs of the |
| pushing the organization hard enough." Comment | | | | organization's life-cycle?A. Very easy to see how |
| in Unlimited from Grainne Troute - CEO | | | | long each board member has continuously served |
| McDonalds. Grainne has an HR background.Potential | | | | and whether board members have to retire by |
| CEO's come from a much wider range of | | | | rotation and offer themselves for re-election, and |
| business disciplines than even five years ago and | | | | whether after say two terms they have to stand |
| perhaps CEO applicants can benefit from my | | | | down for one complete term.Q. Does the Board |
| real-world, in-the-trenches questions and | | | | go through a formal evaluation process? |
| experiences on both sides of the CEO fence. If | | | | Whole Board? |
| you have had a career largely in one discipline to | | | | Chairman? |
| this point then these questions will enable you to | | | | Individual Board members?A. If not, why not? |
| think of the CEO role in broader terms.Questions, | | | | Perhaps it has never occurred to them, perhaps |
| many of which are in the considered "soft" areas, | | | | the Board is too new or perhaps it is considered |
| have potential answers that will help you make a | | | | too threatening by individual Board members.Q. |
| balanced decision as to whether your potential | | | | What are the sacred cows?A. I am pleased to |
| career move will be a good fit, and if so, increase | | | | report that in most cases there are none. |
| your chances for success in the role. | | | | However, understand whether there are any |
| The alternative?I describe it as the | | | | sacred business processes, unprofitable/low-profit |
| "eighteen-month club." You are hired, the board | | | | customers you are "requested" to retain, or any |
| has great expectations on sales and profit | | | | untouchable personnel.Q. Why did they consider |
| growth..... you make the right noises, six months | | | | making the job offer to you?A. Job descriptions |
| go by, twelve months and the board starts | | | | are broad and so what specifically out of your |
| questioning "Where are the results?" and by | | | | background is it that they think you will do?Were |
| eighteen months you are in the departure lounge | | | | they looking for a celebrity CEO, someone who |
| along with 15-20% of the CEO's from the Fortune | | | | will build a leadership team, a consensus builder or |
| 1,000. You have joined the eighteen-month club!So | | | | someone who will drive change? Roles are broadly |
| it is time to start probing:Q What stage in the | | | | characterised as growth navigators; execution |
| business life-cycle is the organization in?Initial | | | | maestros; turnaround surgeons or business model |
| high-growth; maturity; decline or the start of the | | | | transformers.Do you think they will want you |
| 2nd growth cycle? Is there widespread recognition | | | | over the longer term, or will they transition to |
| and acceptance by individual board members of | | | | someone else once their initial goal with you is |
| the life-cycle stage?Q. Does the company | | | | met?Q. Have they structured your proposed |
| strategy have a long-term sustainable competitive | | | | compensation package for growth or stability? Do |
| advantage? How do you know?A. Instead of just | | | | they want you for the long term?A. An easy |
| relying on information provided, have you | | | | way to determine the answer to the first |
| completed a S.W.O.T? Talked to customers and | | | | question is to look at what percentage of the |
| ex-customers? Talked to competitors? Searched | | | | package is at risk? Twenty to thirty percent |
| the internet? Found industry trend information? | | | | probably means that they are looking for high |
| Looked at benchmarked data?Q. Has the business | | | | growth. That said; make sure you can control all |
| model passed its "use-by" date?Aggregators, | | | | KPI's. For example if there is a percentage related |
| e-commerce, new competitors or technology | | | | to EBITDA growth and you are in a service |
| may all have had a major negative impact on the | | | | business will they let you change staffing ratios to |
| business. Does the board truly recognise it or are | | | | improve profitability?A balanced approach is to |
| they still in denial and in the mode of trying to | | | | weight a portion for sales and customer growth, |
| make a silk purse out of a sow's ear?Have they | | | | net profit improvement, plus a percentage for |
| considered a Greenfields approach to the | | | | business reinvestment. BP is the best example of |
| development of a business plan?"If I were starting | | | | this balanced approach to senior executive |
| the business today would we do business the | | | | compensationQ. Is there a stock option |
| same way?"If not, then the board should have | | | | component?A. How will it be triggered? After |
| directed the development of a business plan | | | | KPI's are achieved, after a set time period, or at |
| recognising: industry trends, new technology, | | | | the discretion of the board? Are they just holding |
| competitors, factors impacting on the business | | | | out a "future promise" or is it a genuine offer? |
| model, geographic factors related to sales and | | | | What is their track record in this area?Q. Finally, |
| support and traditional and non-traditional | | | | what is the board attitude to people? Do they |
| competitors. e.g., in the check printing business | | | | have a view that "people are our most important |
| considering the impact of credit and smart | | | | asset" or do they view staff as a "cost of |
| cards.Q. Has the board gone through the | | | | business" or some point in between. Do they |
| cost-cutting phase, or are they locked into | | | | believe in investing in people?A. Unless you have |
| ongoing cost-cutting?A. No-one ever downsized to | | | | the ability to hire, motivate and retain the |
| greatness. During the process of downsizing trust | | | | strongest team then the business is likely to |
| and morale typically are destroyed. Unless the | | | | remain a "me too" company with higher than |
| board is focussed on re-growth strategies and not | | | | average staff turnover usually accompanied by |
| further cost-cutting, then I would suggest that | | | | low customer satisfaction.This implies the right |
| your tenure will be short-lived as you will not be | | | | culture, values and at least being in the top one |
| demonstrating additional profit from new business | | | | third in compensation bands for your industry.The |
| acquisition.Q. Is the board focussed on the short | | | | first 103-daysThis is the most critical time |
| or long-term?While the board may talk about | | | | following your appointment and certainly sets the |
| being "in it for the long-haul" look at what | | | | future culture under your regime. Clearly before |
| shareholders and board members have done in | | | | you start your new role, and with your now good |
| other situations. Are they long-term players or | | | | knowledge of the company time should be spent |
| typically just looking for a quick return?Q. Will | | | | on your Action Plan for the first 90 days at |
| there be a business reinvestment strategy or is | | | | least.This plan will include further fact-finding, |
| there a single-minded focus on shareholder returns | | | | meeting personnel, understanding production and |
| right now?A. To this point there may not have | | | | distribution processes or service offerings, |
| been calls to reinvest in the business. A leading | | | | meeting both current and former customers or |
| question to ask then is: "What has been their | | | | clients and suppliers. Good information on which to |
| track record either in this or other business | | | | base your plan.However, do not underestimate |
| interests?"Q. Is it a public or private company?If | | | | the need to create a support network and build a |
| private, who are the key shareholders? It is | | | | coalition around your strategy and implementation |
| important to meet one-on-one with each of them | | | | plans. No single person can successfully grow a |
| to consider such things as: | | | | business. Identify and groom your motivated |
| - is there a dominant personality? | | | | torch-carriers.Conclusion:Your success as a CEO is |
| - will they let the chair do their job? | | | | not totally dependant on positive answers to |
| - has the board been "stacked" or are there the | | | | these questions.In addition to being experienced, |
| right disciplines to take the company forward? | | | | well-educated and intelligent and articulate you |
| - will directors do what is right for the company, | | | | must have the ability to inspire others.This |
| or dosome board members pursue personal | | | | involves a highly developed social quotient to |
| agendas? | | | | move quickly and successfully in a complex, |
| - will primary shareholders continually | | | | multi-layered and fast-paced environment. So it is |
| second-guess theCEO by calling in regularly at | | | | now time to hone your skills of empathy, |
| offices or taking staff tosocial events etc? | | | | integrity, stamina and flexibility in a variety of |
| - Is the owner or dominant shareholder an | | | | business and social situations.After all, you must |
| entrepreneur?Typically they are short-term | | | | become the passionate torch-carrier for your new |
| players, not interested somuch in planning and | | | | organization.Denis Orme Founder Performance |
| have a "Do it - fix it" mindset.Q. Does the board | | | | Leader of the Leadership Success Institute, he |
| truly understand their role?A. My experience with | | | | has been heavily recruited by start-up businesses |
| private corporations in particular is that the board | | | | through to Fortune 500 companies to analyze |
| does not stick to strategy design, and then | | | | operations, develop and implement change |
| evaluate the CEO on his or her execution of that | | | | management and repositioning strategies, and |
| strategy. Too much time is spent debating | | | | return organizations to sustainable profitable |
| operations. This discussion does little to ensure the | | | | long-term growth.Cited in Who's Who in Emerging |
| long-term profitable operation and market | | | | Leaders, Who's Who in Sales and Marketing and |
| superiority of the business. Again, using my | | | | Who's Who in Industry and Commerce. |
| experience this is not such a factor in public | | | | He has received leadership awards from the |
| corporations.Q. Governance charter.... Is it just a | | | | American Lung Association, Business Volunteers |
| wall-hanging, or a code they live by?A. Quiz board | | | | for the Arts and the Greater Houston Partnership. |