By Leslie S. Pratch
You can have a more successful company and a more rewarding time as its non-executive chairman with a better understanding of how your CEO’s mind works. You might even benefit from also gaining a better understanding of how your own mind works. In this column, I’ll review aspects of a Chair’s role and where this psychological understanding (described in last month’s column LINK) fits in. My overall approach starts from some ideas in a recent HBR article which I also recommend if you haven’t seen it. I highlight some relevant aspects of that article and extend it in some new directions.
You lead the board. You are not the CEO’s boss. The Board collectively is the CEO’s boss. The chair’s ultimate function is to make sure the Board provides the goals, resources, rules, and accountability that the CEO needs. An assessment of the CEO will help you forge a better partnership between the Board and the CEO. The Board will understand the CEO much better, and so will you.
In my coaching practice, I use the insights of psychological assessment as a starting point, and it is a great idea for you too. Does the company have the right CEO to execute on the strategic plan? Learning by trial and error or after the house is on fire is expensive. Wouldn’t you like to know before the person lights the match and take the matches away from him? What does the CEO need developmentally? What interaction style would work best with him? Assessments can help resolve any concerns you have.
The right kind of management assessment can get you the insight that you need. And the right assessor will tell you how you should behave differently in order to maximize the executive’s performance. That’s what happened in the case of Wayne….
THE VERY HAPPY CASE OF WAYNE
The Board asked me to assess Wayne, who was new to the role of CEO and to the board. How should the Board interact with Wayne to bring about his optimal performance? The assessment found that Wayne was a conscientious but pragmatic and bottom-line focused executive. Important to Wayne’s self-image is that he be perceived as a good person. He does not easily handle criticism that appears to question (or that he construes as questioning) his morality or his fundamental decency as a person. He becomes defensive when he fears that others have judged him as having done something bad. His need for others to perceive him in a good light makes him slightly rigid and less open and creative than he could be. It also makes him dependent on superiors for recognition and praise.
The Board’s role in working with him should emphasize supporting him so that he can live up to his own high expectations.
One, you should be as explicit as possible with Wayne regarding expectations, goals, timetables, and resources he will have available, now and in the future. He tends to get touchy when presented with demands or expectations that were not previously established. He is sensitive to criticism and does not want to make a mistake and responds defensively to what he perceives as vague and poorly defined expectations.
Two, you should give Wayne a clear understanding of how you intend to work with him. He will keep his end of the understanding and will expect you to live up to your end. He’ll become frustrated if you fail to perform as promised. You should state up front what the process of control will be, and what the limits are. You should put these ground rules in writing so that Wayne cannot later complain he did not know.
Three, Wayne seeks recognition and support without being needy or exhibitionistic. He is a conscientious and moral person. It is important to him that others recognize those qualities in him. This bears on how investors should recognize Wayne’s achievements. He would like to be valued in the same moral terms he understands himself. He might like financial rewards but would also like others to see his skills and ability to grow the business. You should give him appropriate feedback if things are going well and encourage him to keep up the good work. You should couch your criticisms to minimize the chances that he feels he is perceived as a bad person.
Of course, your CEO is not Wayne, so these aren’t the important dimensions for your CEO or for you. But your CEO very likely has some aspects of how he or she works that could be offset or enhanced by different approaches from you. Wouldn’t you like to know what those are?
You can also consider sharing the findings of the CEO’s assessment with the CEO — you may have in fact been assuming you would do so. Share the findings of the assessment with the CEO conveys respect and builds trust. The board in the above example had the assessor give developmental feedback from the assessment to the CEO.
The CEO may have other individual Board relationships — these other Board members can also benefit from the assessment because they will become smarter about getting the most out of the CEO if and when they interact individually with him.
About the Author
Leslie S. Pratch is the founder and CEO of Pratch & Company. A clinical psychologist and MBA, she advises private equity investors, management committees and Boards of Directors of public and privately held companies whether the executives being considered to lead companies possess the psychological resources and personality strengths needed to succeed. In her recently published book, Looks Good on Paper? (Columbia University Press, 2014), she shares insights from more than twenty years of executive evaluations and offers an empirically based approach to identify executives who will be effective within organizations — and to flag those who will ultimately very likely fail — by evaluating aspects of personality and character that are hidden beneath the surface.