What’s The Secret Sauce Of The World’s Top Performing CEOs?

When about 40% of new CEOs fail within the first 18 months and the odds that a CEO will lead an average company to become a top-quintile performer are only 4 percent, what does separate the top performing CEOs?

How to be an excellent CEO? That is the question posed by McKinsey Senior Partners, Carolyn Dewar, Scott Keller, and Vik Malhotra, who have published CEO Excellence, a new book which identifies the mindset differentiators that distinguish the very best leaders from the rest when it comes to the six key elements of the role of a CEO.

When about 40% of new CEOs fail within the first 18 months and the odds that a CEO will lead an average company to become a top-quintile performer are only 4 percent, what does separate the top performing CEOs?

Listening to the interviews with the authors, Carolyn asked, ‘what really is the secret sauce, what is the mindset, what is the way of approaching it that excellent CEOs do, how do they think differently?’

The Senior Partners started with the mindset because ‘from a single mindset comes a thousand behaviours’, said Keller who went on to give an example, alot of people live by the golden rule mindset, ‘I want to treat others the way I want to be treated’ but what about the platinum rule mindset? ‘I am going to treat others, how ‘they’ want to be treated’. This mindset pays more attention to who this person is, how they are present, their preferences, tolerance and patience, it is all done very differently with the platinum rule mindset, it is all well and good listing and describing the behaviours of these individuals and trying to embody them but it is not enough if we don’t get the right mindset said Kellar. So we started with what is the core mindset.

So what are the mindset unlocks for each of the critical elements?

Being Bold – The mindset of fortune favours the brave. Let’s take direction setting for example, Scott gave the analogy of being handed the keys and taking charge of a vessel worth billions, with thousands of passengers; “It’s easy to take the wheel and think to yourself, discretion is the better part of valour, I am not going to take a lot of risks and keep this thing going” but that wasn’t the mindset of the best. They asked, “what if we upgrade the engines, what if we change the sails, what about going in a new direction?”. The boldness mindset is definitely what characterises direction setting.

Align the organisation – Keller led with the quote ‘not everything that can be counted counts and not ‘everything that counts can be counted” Albert Einstein, the mindset unlock here is when it comes to the softer elements in an organisation, the areas you can’t measure, that can become ‘I am going to work on it on a ‘best efforts’ basis, but the top CEOs they manage the soft stuff the same as they manage the hard stuff, they put equal rigor and discipline into how they handle these softer elements such as talent, organisation design and culture, and because they treat these elements the same and they know it is hard to do so, they also know this is a source of competitive advantage for when they get it right.

Leading Through Leaders – Scott talked about the difference in mindset here and how you work with your top team. Many leaders might take over a team and think how they can use their time more efficiently and effectively, not the top CEOs. They look at the team and see how they can manage the psychology of the team. Scott goes on to give an example of Lilach Asher Topilsky ex CEO of Israeli Discount Bank who talked to how they were trying to get a team galvanised as one team. They talked a lot and developed the FIST analogy, where nothing gets through the lines or gaps of the fingers, not the board, not the customers, shareholders, unions. Once they had crystalised that mindset, they were going to be so strong together, that was working the psychology of the team.

Engaging the board – Vik talked about how for many CEO’s there is a tenuous relationship between the board and CEO, “not enough CEO’s get enough out of the board, there is not enough back and forth and transparency.” What they learnt from interviewing these top 67 CEOs from around the globe was that they were getting disproportionate value out of the board. They were of the mindset that “these are the best experts out there, why shouldn’t we be using them and using them well?” They believed in building trust with the board and giving them full transparency, not just giving them what they needed but giving them access to the management team, encouraging their teams to learn from the board, that the board should coach their teams. It was all about building real relationships with the chairman and chair person of the board. Whatever hand they were dealt they probed deeply into that expertise, they bought board members in to help. They also spoke about how to get the best from the board meetings, focussing on the things that matter, the future strategy and how to make this organisation as effective as possible. This thinking is contrary to what you hear from many CEOs who typically want to give minimum time to their boards and to be left to the running of the business.

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