Yikes! According to the new book, “CEO Excellence,” the authors report that “Thirty percent of Fortune 500 CEOs last fewer than three years, and two out of five new CEOs are perceived to be failing within eighteen months.”
If you’re a CEO—perhaps slipping off that perilous perch—take two aspirins and call someone in the morning. Or…just read this remarkably well-researched book by three senior partners at McKinsey & Company. Subtitled, “The Six Mindsets That Distinguish the Best Leaders from the Rest,” this gem is an early contender for my 2022 book-of-the-year honors.
Two Options for Studying the BEST Leaders:
• Option 1: Read 20 leadership books.
• Option 2: Read “CEO Excellence” (the equivalent of 20 books).
MY TOP-20 LIST. Here are my Top-20 takeaways from the book:
#1. EXCEPTIONALLY PRACTICAL. Trust me—this outperforms any book you’ve read recently. I made 51 notes, but I could have made 251. Jam-packed with serious CEO thinking—the authors looked at 2,400 CEOs of public company, then zeroed in on 67—using their criteria for the “best leaders.” (The appendix includes 36 pages of CEO bios.) After “in-depth, multihour interviews,” this book popped out. You’ll love it.
#2. MANAGE BY MILESTONES. The book’s “six mindsets” launches with the Direction-Setting Mindset, “Be Bold.” In Chapter 3, CEOs are encouraged to “Act Like an Outsider” when allocating resources. Jamie Dimon, CEO of JPMorgan Chase (who is quoted often), urges CEOs to “manage by milestones (not annual budgets).” The authors note, “In essence, Dimon’s approach is never to let an annual budget cycle get in the way of making good business decisions.”
#3. CORPORATE FUNERALS & HALL OF FAILURES! In the section, “Kill as Much as You Create,” the book describes how savvy CEOs eliminate sacred cows and dead horses. One CEO “set up a ‘Hall of Failures’ where the company organized funerals for failed projects. The idea was to show that trying and failing would be honored as long as lessons were learned and shared…” The ceremony also communicated “that no more resources would be allocated to the effort—that the projects were dead.”
#4. PRACTICAL WORKSHEETS. In my first browse through “CEO Excellence,” I discovered three practical worksheets in the appendix (nine pages)—worth the price of the book:
• Worksheet 1: My CEO Mandate: What is the degree of change you aspire to lead? (Rate the six mindsets on a scale of 1 to 5.)
• Worksheet 2: How Am I Leading Today? (Rate how you’re currently leading, within the six mindsets: Challenged? Able? Excellent?)
• Worksheet 3: Prioritizing Improvement Areas and Related Actions (five assessments/action steps)
#5. ENGAGE THE BOARD (Mindset #4). The worksheet asks CEOs to rate their engagement with the board in three areas: Relationships, Capabilities, Meetings. You can rate your appropriate involvement in board meetings on a three-level continuum. (Hint: Excellent CEOs help the board focus on the future.)
#6. EXIT BOARD MEMBERS. Jamie Dimon, when he was the new CEO of a contentious merger, amazingly inspired the two merged boards (22 members) to exit eight members to a more workable board size of 14. Read how he approached this delicate dance in the section, “Tap the Wisdom of Elders.” McKinsey’s research notes: “A full 82 percent of executives think at least one member of their company’s board should be replaced, citing reasons such as diminishing performance due to advanced age, serving on too many boards, and reluctance to challenge management.”
#7. HEART PADDLES. In Chapter 2, “Strategy Practice,” we learn the importance of “applying ‘heart paddles’ to create a series of performance-enhancing S-curves.” Why keep an eye on your organization’s downside? “The average lifetime of an organization in 1935 was ninety years, in 2015 it was eighteen years.”
#8. DO WHAT ONLY YOU CAN DO. There are three convicting chapters for CEOs on the Personal Effectiveness Mindset, “Do What Only You Can Do.” Did you know that when he was “urged to spend longer stretches of time on his masterpiece “The Last Supper,” Leonardo da Vinci immodestly responded, ‘The greatest geniuses accomplish more when they work less.’” Chapters 16, 17, and 18—huge gut-check for all leaders!
#9. VACATION PROTECTION! When the CEO of Mastercard is on vacation—get this—he gives his cell phone to his wife. “My wife locks the device in the safe with a code that she sets, so I have to get her to open the thing and give it to me!”
#10. CHIEF OF STAFF ROTATION. To both mentor key people (and ensuring the COS role does not become too powerful), the CEO of Mastercard intentionally changes his chief of staff every 18 to 24 months.
#11. NO MORE MR. NICE GUY? “In year six of my eleven-year journey,” reported Brad Smith, CEO of Intuit, “one of my 360 feedbacks came back with, ‘Brad is lowering the standards in the company because he’s being too kind in reviews and isn’t willing to call anybody out.” While many CEOs are flexible in their coaching, per Ken Blanchard’s situational leadership approach, Smith changed. “I started to coach business performance in public and personal performance in private.”
#12. OH, OH! WHY DOES OUR CEO HAVE A COACH? Initially fearing that if he retained a coach, people would wonder if he was on the bubble, Best Buy’s CEO soon embraced coaching. “Now I realize an executive coach can help successful leaders get better. One hundred percent of NFL teams have a coach—in fact, a coaching staff. Why on earth should CEOs and management teams not have a coach?”
#13. IF YOU WERE CEO…? To enrich continuous learning, Netflix’s CEO asks his top 50 people, “If you were CEO, what would be different at Netflix?” Intuit’s CEO met twice a week with managers several levels down—and asked three questions, including: “What’s getting better than it was six months ago?”
#14. ZOOM MOMENT. The CEO of Electronic Arts—hosting a Zoom meeting of 7,000 employees during COVID—was interrupted by his five-year-old son who asked his dad to make a paper airplane! The CEO paused the Zoom call and—of course—made the paper airplane! (It took just 30 seconds—but the response from work-from-home team members was worth gold. Said one, “Thank you. You just gave us permission to be parents.”)CEO Excellence The Six Mindsets That Distinguish the Best Leaders from the Rest PDF
#15. STAY HUMBLE. Every chapter begins with a “I-must-memorize-this” quotation. Chapter 18’s message, “Stay Humble,” begins with a Sudanese proverb, “A large chair does not make a king.”
#16. SUCCESSION BEGINS ON DAY ONE. Throughout the book, intentional succession and the need for humility oozes out. One CEO noted, “My kids used to say, ‘I’m sure people laugh at your jokes at work because they have to, but you’re honestly not as funny as you think you are.’ When you leave the job…people don’t laugh at your jokes and they don’t call anymore.”
#17. STAY GROUNDED. The CEO of Cadence, “Every morning [my wife] reminds me to bless the people I work with. She tells me, ‘It’s not your work; you’re just doing your part. Give the glory to God.’ That keeps me grounded.”
#18. ELEGANT SIMPLICITY. In the helpful conclusion, the authors summarize: “…a third theme is to convey the new direction with elegant simplicity. Virtually every CEO we spoke to could describe their strategy in an elevator ride. They also often had a ‘one pager’ that told the whole story crisply.” (Note: every chapter ends with very helpful bullet-point summaries.)
#19. BEST CEO DESCRIPTION: CONDUCTOR. U.S. Bancorp’s CEO believes a symphony conductor is the perfect metaphor for CEO excellence—noting that at no time in a performance does the conductor [CEO] “actually play an instrument.”
#20. “(DON’T) PUT PEOPLE FIRST!” Chapter 6, “The Talent Management Practice,” is a contrarian and must-read chapter—DON’T put people first. Instead, define the role first. When interviewing the CEO of “an average-performing health care company,” the authors asked three questions:
• “Who are your top twenty most talented leaders?”
• “What are the twenty most important roles in the company?”
• “How many people on the first list are filling roles on the second list?”
The CEO’s response? “He went pale.CEO Excellence The Six Mindsets That Distinguish the Best Leaders from the Rest PDF
Oh, my. I could add another 20 reasons why this book is so helpful. Must-reads: the difference between winning vs. victory, the lottery ticket effect, “Treat the Soft Stuff as Hard Stuff,” pendulum swing lessons, the matrix organization vs. the helix organization, left tackle positions, categorizing talent into four buckets—and the six months rule, the Law of Triviality, plus why Netflix uses a Chaos Monkey and another CEO uses a “Wreckoon” (a small mnemonic) to stress-test thinking in meetings. And don’t miss the “Moments of Truth Practice” (aka crisis stories). “The best way to manage a crisis is, of course, to prevent it in the first place.”
You can’t always eliminate the crisis—but you can inspire your board and your team to read this book. (And thanks to the publishers for sending me a review copy.)
