It’s becoming increasingly difficult to function as a CEO in today’s high pressure business environment, but the rewards can be immense.
Many CEOs make more in a year than their employees will make in a lifetime. The average CEO of a major U.S. corporation earns in excess of $12.4 million, including salary, bonus and other compensation such as exercised stock options, according to a Business Week survey of executive pay.
That’s $34,000 a day including Saturdays and Sundays and represents 475 times the average income for US workers. Compare that to 1990, when CEOs made 85 times the pay of average factory workers, and to 1980 when they made 42 times as much. That’s real exponential growth.
This represents a huge and growing gap that serves to isolate CEOs from their colleagues. CEOs can’t be absolutely certain in whom they can place their trust. Employees who report to them want to be liked by the organization’s leader, meaning there always exists a temptation to tell their CEOs what they want to hear and gloss over the truth.
CEOs Go it Alone
Theoretically the company’s directors can serve as advisors to the CEO for major decisions but once a leader is perceived as weak or indecisive the board will be tempted to seek a replacement they feel is stronger. CEOs tend to go it alone when it comes to making decisions.
This is why bringing in an outside advisor as an executive coach to the CEO can generate immediate and lasting benefits for the business. The coach is “invisible” to the organization’s employees as well as the board of directors. The coach is neither embroiled in the political processes of the company, nor in a position to benefit from expressing anything but the truth.
Murray Axmith is a principal of Toronto-based Axmith & Adamson Consulting, a firm that provides coaching services for senior business leaders. He recently wrote in an article published in the Ivey Business Journal: “Executive coaching is a relatively new area of management consulting that has emerged primarily because of the increased pressure on senior executives.”
Axmith has his own view of the coaching process and says there are two key attributes of executive coaching — first, its purpose of enhancing the executive’s contribution to the business and second, the executive’s ownership of the actions that arise from the coaching process.
Understanding this second point is essential to obtaining success in coaching CEOs. The coach brings no function-specific solutions to the business. The coach can only drive the CEO to develop and implement his or her solutions to the problems that are identified.
Axmith believes that everything the coach can do for the CEO fits broadly into these categories:
•  Assist a newly appointed CEO to make a successful transition into a key role
•  Help a valued CEO with a specific performance problem to develop new skills and make necessary behavioral changes
•  Act as a confidant to CEOs as they make difficult strategic and operational decisions
Improving Necessitates Changing
Creating improvement in a CEO’s performance often requires a combination of organizational and behavioral change. To be successful an executive coach should have a good knowledge of business management, together with an appreciation of psychology and human behavior.
The CEO needs to be given a clear understanding of their role in the business. CEOs don’t often have a mentor to guide them into their positions when they first take over, and as a result they may be doing too much or too little in some of the aspects of their position.
If a CEO is demonstrating behavior that indicates insecurity or is overly aggressive it may be that they have been placed in a position beyond their managerial abilities or simply that they have been isolated by subordinates from the realities of the business they are supposed to control.
The coach needs to encourage the CEO to practice self understanding and self analysis so that they can work together to develop corrective measures without experiencing a loss of confidence. In turn, the CEO must be receptive to adopting new behaviors.
It is essential that the coach has the ability and the opportunity to ask questions that will stimulate the CEO into both objective and subjective considerations about their position. The coach needs to challenge the CEO’s decisions and judgment so that their intellectual and problem-solving abilities are sharpened.
The coach must bring out the CEOs personal values and encourage a comparison of them with those of the business. It is important that the CEO’s values are in tune with the guiding principles of the organization, and if any adjustments are necessary to relieve stresses they will most likely have to be made by the CEO.
The person who coaches CEOs must be able to function as an equal and not be intimidated by the executive’s status or income. The coach must have the respect of the CEO in both a personal and a business sense, and trust between the two is equally indispensable.
Ten Coaching “Focus Points”
Charles R. Polcaster, PhD, principal of coaching firm Associates in Professional Counseling identifies ten coaching “focus points” that have led to measurable results in his CEO coaching experience:
1. Designing a plan to rapidly increase personal effectiveness.
2. Retooling personal time management to spend adequate time with family and be a high level performer.
3. Overcoming procrastination.
4. Improving communication skills.
5. Identifying key result areas.
6. Developing teamwork.
7. Developing a practice management plan.
8. Building a peak performance pyramid.
9. Identifying and utilize the benefits of travel time.
10. Building values based management.
The truth is that occupying the position of CEO can create demands that are impossible for one person to handle on their own. This often affects their abilities to deal with other people and, to quote a contemporary piece of wisdom: “CEOs are hired for their skills but fired for their personalities.”
Increasingly the coaching of CEOs is taking place where it can be seen, and even applauded, by others. Some prominent CEOs with acknowledged coaches are eBay’s Margaret Whitman, Pfizer’s Henry McKinnell, Unilever Group Co-Chairmen Anthony Burgmans and Niall FitzGerald, and Belo’s Robert Decherd. The senior leadership at American Express has also worked with business coaches as has U.S. Treasury Secretary Paul H. O’Neill.
Coaching CEOs will only work if the talents of the coach are matched by the ability of the CEO to make the necessary changes, but there is a growing appreciation of what coaching can do for people in top positions. According to Daniel Goleman, Annie McKee, and Richard Boyatzis in their recent book, Primal Leadership: “Without a coach, a lot of CEOs are likely to give up.”
Copyright 2005, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com.
Chris’ combination of academic credentials, career experience and temperament ideally suit his calling as a business development advisor. Clients say he has a mind for business and a heart for service.