The truth is hard to swallow, and hard to say, too
But I graduated from that bullshit, now I hate school
—Lil Wayne, “CoCo“
My greatest disappointment as CEO was the day I realized that helping my executives develop their skill sets was a bad idea. Up to that point in my career, I prided myself on my ability to develop people and get the most out of them. In my jobs running product management, product marketing and engineering, developing young talent was the most rewarding part of the job. Helping them learn to manage, improve their judgment and be more effective in their domains made my organizations better, and people genuinely appreciated the effort.
How could a great practice for a functional manager be a destructive one for a CEO? Let me count the ways.
You don’t have the skills. The first question that you must ask yourself is how are you going to develop a poor performing head of sales into a good one if you have never run sales? What exactly are you going to teach them? Would a sales VP who became a CEO be able to develop you into a better engineering manager?
You don’t have the time. A company depends entirely on the CEO for an important set of functions, which includes timely and high-quality decisions, clear direction, hiring a great team, and architecting and implementing a super-high-functioning communication architecture. Any time wasted trying to develop executives when you don’t even have the skills to do it takes away from the essential CEO functions.
They don’t have the time. A leader’s effectiveness is largely a function of how much confidence her followers have in her. If someone is running a large organization and doesn’t show competence immediately, her people will quickly write her off, and she will never recover. Executives have no time to be developed before they become useless.
Your results will suck while you work on a task that you cannot complete. It’s bad enough that you will work on something that you will add zero value to, but as you are doing that, the organization in question will continue to be awful. You will lose time and ground in the marketplace while you try and fail to figure it out. Meanwhile, everyone who works for that executive will be working in a crappy organization, doing crappy work and developing a crappy reputation for being part of it.
Executives are compensated for their existing ability, and therefore should not be evaluated on their potential. While it’s common practice and a good idea to take potential into account with regular employees, this methodology does not work well for executives. When you hire an executive, he will demand around 1 percent of the company. How do you explain to a great engineer with less than one-fifth that amount of stock that you are waiting for the executive’s potential to kick in?
Trying to help can make things far worse. If an executive is failing and you keep him around, thinking that you will develop him, things will get ugly quickly. You know he’s incompetent, so you will likely discount everything he says. When he raises a point in a meeting that contradicts a high-performing executive, you will take the high-performer’s side 100 percent of the time.
This will make your failing executive feel badly, but more importantly, it will completely destroy the credibility of the function that he is running. If the exec is, for example, the head of marketing, everyone in the rest of the organization will draw the conclusion that marketing is unimportant in your company. That conclusion will be surprisingly long-lasting.
While you cannot develop an underpowered executive into a high-performing one, there are several things that you can do in your role as his manager that will help all of your executives succeed.
Provide the proper context. When you hire an executive, she may know her function, but she does not know your company. She does not know your management philosophy, the top performers, the history of the decisions that were made, how product flaws were created and fixed, etc. This information will be invaluable to her success and you should invest heavily to make sure that she quickly gets all the context she will need.
Be very clear about the rules of the game. You should be extremely clear up front that you expect your executives to be world-class in their functions. If they are not, they will not keep their jobs. Furthermore, you will not be able to make them world-class, because you are not world-class in their areas.
Know what you want, and be clear about it. Tell them what you think world-class performance is. If you don’t know, go find out by interviewing some world-class CEOs and world-class executives, and then tell them.
Be clear about relative performance. If you think your marketing is not as good as other companies in your sector, then let your head of marketing know. If you know that other companies generate five times the number of qualified leads than you do and you don’t understand why, then say something. This will make it much easier for you to make a swift decision if your executive does not know what he is doing.
In the end, a CEO has got to know her limitations.
This post first appeared in Re/code.
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