"CEOs Under Pressure: Heed the Warning Signs"
by Derek Gardner (MBA)

In today's business climate, CEOs are under constant pressure to perform or face the sack. Investors are becoming more and more careful about the companies they place their money with, and simply analysing annual reports is not enough anymore. Investors and analysts are looking closely at how companies are run, how the management team is performing, before deciding on whether or not the stock is worth investing in. Therefore, successful leadership and business results combined are becoming the benchmark for CEOs. Yet many intelligent, business-savvy CEOs fail in their quest to succeed. Why is this, and can it be avoided? CEOs don't succeed for one simple reason. They fail to execute their plan. End of story. They become indecisive, they start to miss delivery on commitments, they simply don't get things done. It is very rare that a CEO fails because his/her strategy was a complete mess. Its rather in the execution of the strategy that things go horribly wrong.

This failure to execute can be avoided if the early-warning signs are firstly spotted, and then acknowledged and acted upon swiftly. The alarm bells are the failure of key team members to consistently deliver results. This sustained poor performance is a real threat to the company. The CEO knows this problem exists, but doesn't act on it. Here are the warning signs, in the form of excuses the CEO gives for not dealing with the problem:

The analysts and the media like him.
The team member has developed good relationships in these areas, and his poor performance makes the decision more difficult for the CEO. If he takes action, it may hurt the company's image. If he takes no action, the company's results will suffer. In many cases, the CEO doesn't act until it is too late.

I know him.
The CEO is loathe to bring in someone new, due to his own insecurities about bringing in a fresh face. This is typical where the company has a strong, insular culture, and the CEO feels that someone new may not fit in.

I can help.
The team member is consistently missing his forecast, so the CEO decides to take him under his wing and help him. This is fine if results improve, but does the CEO have the time to focus on the team member and his reasons for failure? If results don't improve, then what? The CEO may be seen to have failed as well, because in effect he took on the responsibility and didn't deliver.

I can't fire more staff.
The CEO has let a number of people go due to poor performance, and he feels that if he fires this executive, the board may see his leadership as flawed. He is afraid that the board will feel he is not developing the company's leadership. Failure to take corrective measures means the team member continues to under-perform, and the problem intensifies.

He's the one I choose.
The CEO is so loyal to the individual, he refuses to accept that his man can fail. Here the CEO an team member may have worked together for many years, may have studied together, or are childhood friends. Whatever the case, loyalty has blinded the CEO, and the poor results continue.

He has the talent, he will succeed.
This is usually applied to a CEO's protégé, where the CEO is absolutely convinced that the person in question will succeed. The team member may have the talent, but not the organisational skills to get the job done. In most cases this person has been promoted from within by the CEO.

Looking at the warning signs, it is clear that failure can be avoided. The CEO simply needs the self-belief to act when he needs to. Putting the inevitable off is simply delaying the pain, which will become harder to bear as he stalls on the issues at hand. Failure to act can cost him his job, cause the company a great financial loss, and result in many employees being made redundant due to the pressures of his failure on the business. Act now!

Derek Gardner is a Business Consultant with SME Management Consultants in London, and can be reached at dgardner@mbaweb.co.uk

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