Most CEOs know that business is full of tough issues, hard decisions and bad news like a supplier shortage or a difficult personnel issue with a long-term employee. The things that are never fun to deal with are the very things that great CEOs seek out and strive to correct.
This is one reason why a CEO should never facilitate team meetings. A CEO's first responsibility is mining for conflict and making sure that the toughest issue (“the elephant in the room”) is surfaced and dealt with first. It’s virtually impossible to facilitate a team meeting and be a participant in discussing the content.
A CEO’s most important role is to be intensely involved, watching behavior, monitoring body language and discerning the really tough, nasty issue that's on everyone’s mind but that no one wants to address. A CEO needs to be like an orchestra conductor, watching everyone, guiding behavior and drawing out people who might be holding back.
It's amazing how many executive teams gloss over tough issues and bad news as if they'll solve themselves if left alone long enough. It’s easier and certainly more pleasant to deal with only the positive, fun stuff. While great teams put the toughest issues on the table first and do so without a CEO's prompting, most teams follow human nature and prefer to avoid them.
Emotion often causes executives to avoid dealing with the hard stuff, perhaps in an attempt to dodge accountability or blame. Is it difficult to admit a mistake or take accountability for something bad? Of course. But great leaders know they get a paycheck to deal with them and solve them.
How senior executives deal with mistakes and bad news sets an organization's tone. Chewing out subordinates and berating them creates a terrible culture that can cause people to avoid taking risks and hesitate in making important decisions. Great leaders know that encouraging people to try new things (innovation) is key to intelligent, profitable company growth.
But all innovation does not result in wins, so failures and bad news need to be treated like learning opportunities.
I recall a story about a junior leader at a large technology company who spoke with the CEO and at the end of the meeting admitted she had made a wrong decision that would cost the company several million. The junior leader was horrified and embarrassed by the error and even offered to resign or accept other punishment. The CEO wisely responded that if leaders in the company were not making those kinds of mistakes, then the company wouldn’t be trying enough new things. What a message that sent to every employee.
I’m often asked how a leader can focus on bad news and tough issues while creating a positive culture of reward and recognition. The answer involves sequence. The tough issues and bad news should always come first. Trying to deal with positive things when those elephants in the room still exist usually disrupts focus anyway. The team knows there's something that needs to be discussed but everyone is afraid to put it on the table. After dealing with those elephants, organizations can and should celebrate the wins and good news.
I once was CEO of a company on one coast and had a regional vice president on the other coast. We set up a process to talk three times a week for 30 minutes so that he could keep me appraised of what was going on across the country. It took me several weeks to figure out his modus operandi. He would spend about 25 minutes telling me of all the wonderful positive things taking place in his region and then use the last five minutes to describe the toughest issues. Once I realized that we never had time to drill down on the tough issues, I changed the call format: I gave him 20 minutes to tell me of the toughest issues in his region and then the last 10 minutes were devoted to positive things.
Never fail to recognize the positives but not at the expense of your duty to deal with the negatives.
Are you dealing with your elephants first?