The Negative Impact of an Unaccountable CEO
This article was published in Chief Executive Magazine on June 18, 2018.
A foundational premise of our leadership team development approach is that accountability on truly great leadership teams is team-based, rather than power-based. We remain steadfast in our conviction to this premise but have learned some very powerful lessons since we started Relationship Impact on the importance of the senior team leader’s (CEO/President/GM) role is in establishing an environment where team-based accountability thrives. This optimal team accountability construct is extremely difficult to establish and requires nurturing, commitment and patience on the part of the senior team leader.
Most will agree that accountability is an essential ingredient in the success of growing organizations. In fact, much has been written about how employee engagement is strongly influenced by how effective and accountable senior leaders are as a unit. Unfortunately, in our work with the leadership teams of growing organizations we often witness the negative impact of unaccountable CEOs. Below is a summary of one of these stories…
A Typical Situation
The CEO started the company at a small office in a co-working location with the help of a few competent colleagues. For the first few years she sold, delivered service, managed the books and organized the Christmas party. Then the company won a big contract that required her to hire more people and then another and then another until she found herself running a substantial organization. To enable her to continue to build the pipeline she hired a COO to run operations and a CFO to manage the finances and promoted two VPs to lead the company’s primary service lines. Intellectually she knew this was the right approach but emotionally she wasn’t prepared.
“NOW SHE HAD A TEAM TO LEAD BUT SHE CONTINUED TO BEHAVE AS IF SHE WAS A TEAM OF ONE AND WONDERED WHY HER TEAM WAS FRUSTRATED.”
Specifically, in the company’s early years she never really had to answer to anyone – she made the hiring decisions, decided which opportunities to pursue, created the service delivery approach as well as many other critical strategic and tactical decisions. Now she had a team to lead but she continued to behave as if she was a team of one and wondered why her team was frustrated. Below are a few statements that exemplify this frustration:
“We make decisions as a leadership team and then we find out that she (CEO) has changed them unilaterally and without rationale.”
“I was hired as the COO but I feel like a glorified executive assistant with limited ability to make the impact I was hired to make.”
“She (CEO) rarely adheres to the deadlines we agree to as a team.”
“We are told to remove poor performers quickly but she (CEO) continues to protect a leader who is clearly hurting our progress.”
“After much discussion she (CEO) continues to ignore the chain of command.”
“She talks a great deal about empowerment but constantly overrides decisions my colleagues and I make in our business units.”
The Impact of an Unaccountable CEO
To an outside observer it is quite obvious why this CEO’s team is frustrated. She has brought on talented and experienced leaders to help her run the company but she cannot seem to let go of her old ways of operating – she does what she wants when she wants without regard to the roles she has given to her new leaders.
The impacts of this behavior can be devastating. First, the company’s ability to scale efficiently and effectively will be severely limited due to the CEO’s need to continue to be intensely involved in areas that she has delegated to other senior leaders. Second, the discretionary effort that executives and staff put into the company will slowly diminish – “why bother if she’s going to do my job for me.” Finally, the leadership team will be sub-optimized and may become dysfunctional resulting in departments working at cross purposes, misalignment of resources, inconsistent service to customers, and heightened employee frustration. In fact, a recent Aon Hewitt study suggested that without engaged senior leadership, companies are not able to engage the hearts and minds of their employees.
The Not So Simple Solution
Our experience suggests that the challenge of helping a CEO understand the importance of being accountable to her team is not easy. There is a relatively simple formula but execution of the formula can be extremely difficult.
First, just like any other difficult challenge the CEO must admit to the problem. Specifically, when the CEO finally recognizes the negative impacts of her behavior she has to take responsibility for her contribution to the problem – “my inability to be accountable to my team is holding the company back.”
Next, the CEO needs to work with her team to identify any structural changes that will facilitate a more accountable environment – “we will work together to identify a decision authority scheme that works best for our company and a mechanism for keeping each other informed on progress and challenges.”
Finally, the CEO has to identify the behavioral changes she must make to strengthen her role as a leadership team member – “while I am the CEO and can ultimately make whatever decisions I feel necessary, I am going to empower my direct reports operate their areas of responsibility without interference and when I do interfere I am asking them to call me on this behavior.” We believe that this last phrase “I am asking them to call me on this behavior” is the key ingredient for realizing any difficult behavior change.
Changing adult behavior is difficult and requires two important elements – mature direct reports who are not afraid to challenge senior team leaders and senior team leaders who are have the ability to receive feedback and listen to others’ perspectives. Marshall Goldsmith an internationally recognized leadership coach and author of management-related literature would summarize this CEO’s accountability challenge in the same words as the title of his best selling book – “What Got You Here Won’t Get You There.”