To bring a well-developed company strategy to life, McKinsey researchers recommend mobilizing forces and creating support structures. Without a dedicated team, an ambitious management committee, and supportive shareholders, a CEO’s job can be tough and the costs of failure high. We’ve collected some tips on how to maintain relationships with key stakeholders.
Give Your Board of Directors Digital Power
Researchers have sounded the alarm about the need to raise the level of digital competency among executives. A Gartner report reveals that investments in digitalization tend to increase net profit and 47% of CEOs are experiencing pressure from the executive board to make progress in digital. At the same time, McKinsey reports that directors are “feeling outmatched by the ferocity of changing technology, emerging risks, and new competitors.”
Reflecting on the digital skills most relevant to individual business lines is one-way boards can raise their collective understanding of technology and generate more productive conversations with management. — McKinsey
To add digital power and simplify communication with the board, do two things. First, search for tools that will clearly show executives where your projects stand and if the strategies you’re pursuing are working. Second, integrate software based on real-time analytics. With software like Epicflow, you’ll be able to keep the board constantly updated. The Stanford Business Graduate School reports that to increase transparency, Netflix came up with a unique way of sharing information among the top brass. To make board meetings more engaging, the company structured its presentations as online narrative memos, providing direct links to all data in the company’s system.
Yuri Warczynski, CEO of the HYS Enterprise software house, found his own way to communicate to the board of directors and ensure that the information he receives shows progress at all levels of the organization. After digitizing processes and making them visible, HYS Enterprise set up a system to notify the CEO of unfeasible milestones in real time. By knowing what blocks the company’s projects, HYS can foster a find-an-issue-and-fix-it culture.
It’s tricky to see how projects are developing in such complex environments like ours. It was a long search for a way to get a high-level overview of projects to know that everything is going according to the plan. We created Epicflow, a software solution which can guide us through project progress in a holistic way and at the needed level of detail. — Yuri Warczynski
Thanks to this approach, HYS has reached a high level of transparency and is able to report real-time results to the board of directors.
Show Shareholders Your Long-Term Goals
As a CEO, you should be able to convince your shareholders of the viability of your goals and strategies to attract investments. The Harvard Business Review has concluded that “rather than attempt to please all shareholders through the inevitable ups and downs, CEOs must recognize that, ultimately, it is only long-term profitability that matters, not today’s growth expectations or even the stock price.” Focusing on the long-term perspective may seem too fuzzy a picture to your shareholders at first. To be able to support yourself with real facts and numbers in front of shareholders, stick to the following:
- A clear view of the budget based on your current project progress to see how much money has been burned within a specific time frame.
- The correlation between capacity, load, and output of teams to analyze if your workforce is bringing the expected results.
- Specific project portfolio trends to see if your projects tend to be finished on time.
When results can’t be delivered on time, the CEO’s reputation may suffer — alongside revenue. If you have bad news to tell to your shareholders, work out a strategy for delivering it. According to Moira Conlon, president of Financial Profiles, Inc., an action plan should focus on “moving beyond the problem, including reasonable timeframe and milestones.”
While you can’t change history, you can impact what is being done to fix the problem and what policies or protocols are being put in place to make sure the problem doesn’t occur again. — Moira Conlon
What’s imperative in building a successful action plan? Stepping down from your ivory tower to see how the land lies and checking what’s going on with the timeframes and milestones. Having enough data as proof to ask for more investments. Enlisting the support of senior managers and ensuring they’re able to conduct reliable what-if analysis. What kind of data is relevant, then? Ask yourself:
- What milestones can I move to streamline my business operations?
- How many resources do I still need to make it to the deadline?
- What’s priority number one to avoid cost escalations?
- What’s the optimal workload for my team?
Having answers to these questions will let you avoid unpleasant situations. Having this information at hand will also show you to be a responsible and reliable party in the eyes of shareholders. It will earn you respect and, what’s most important, profit.
Show Employees Their Role in The Business Strategy
Сontinuous support from the team is a CEO’s greatest power. Barrie Clarke, the Founder and President of BI Consulting, believes that enthusiasm, believability, consistency, and accountability are key to a CEO’s relationship with the team. What distinguishes a true leader?
[The] ability to listen before speaking. Being courageous when making decisions. Not crumbling in the face of adversity. Promoting continuous improvement and ethical values. Developing and mentoring of teams. — Barrie Clarke
But there’s much more. To build trust with the team, prioritize honesty and integrity.
Employees will admire a CEO if they’re motivated at work. A CEO’s role, in turn, is to express genuine interest in their employees’ work. According to a recent report on motivation from Harvard Business Review, many workers consider motivational techniques used by their leaders to be fake and double-minded. A 10-year survey on employee engagement conducted by Tanner Research Group reveals that 79% of employees who give up their jobs refer to lack of appreciation as a key reason. In the opinion of experts, there are three sincere ways to motivate employees:
- Ask for the story behind an accomplishment.
- Show your employees their role in the business strategy.
- Let employees know that you understand the effort the job takes.
By following these three steps, you’ll show you’re an emotionally intelligent leader who understands how valuable your employees are to the company. Personally recognize their strengths and honor your co-workers.
Another essential part of a CEO’s job is delegating. Susan Thomson, the CEO at ActionCOACH, suggests that executives find proper ways to delegate tasks to their employees. The right approach to delegating tasks will not only strengthen your professional ties with the team but also make them feel more confident in what they do. To get support from her inner network, Thomson asked people to help her build her “pit crew”:
If I’m focused only on the things I do well, that means I need others to do the things that are still my responsibility but fall outside of my strengths. My core challenge for getting support was simply not asking! The key for me was getting clear on my superpowers — the things that I love to do. If I could increase the time spent on those things by even 20%, it would make a real difference in the business. — Susan Thomson
Thomson decided to get intentional about using her true skills. She built KPIs around them and tested and measured that time. This made a huge difference in the company’s momentum, and Thomson was happily surprised about where the team wanted to get involved.
After the job is done, always remember feedback. Feedback is a prerequisite to fostering a culture of psychological safety in an organization. Two times a year, Google carries out a 13-question survey. Amazon uses a special Connection app to collect feedback on work-related issues. According to Financial Express, Amazon changed its employee review process with its Forte program. The purpose of Forte is to focus more on the strengths of employees and less on their weaknesses. There are lots of methods for providing constructive feedback. What’s indispensable is approaching every employee differently.
Creating great support structures requires honest and candid communication, preferably coupled with investment in digitization. Being able to show your board of directors relevant data at any moment pays off in trust and profit. And sincerely motivating your team and properly delegating tasks brings mutual respect. As long as you’re working in harmony on with these three fronts, you and your business are backed up.