Increasingly, the attention one pays to organizational culture and their display of emotional intelligence (EQ) in a workplace is seen as the most important quality when measuring the effectiveness of a leader.
As challenges emerge, stakeholders often feel a leader with high EQ and a strong focus on internal development will deliver the greatest benefit to a company long term, and especially when things go wrong.
But why? While a positive organizational culture has many benefits, including leading to increased productivity from staff while creating a trusted channel to promote the business and its brand, the role of the CEO in maintaining this can be blurred.
But ensuring culture is on a CEO’s radar is important, as a negative culture can be as damaging as a positive culture can be beneficial. Ultimately, a toxic culture can generate unfavorable publicity, which can directly affect the CEO’s reputation.
For instance, the Australian Bureau of Meteorology faced highly publicized claims of a toxic workplace culture in 2022, and there have been numerous reports over the years that Uber was notorious for a workplace culture that encouraged worker competition and overlooked misconduct by top performers – with both stories leading to senior departures at both organizations.
Despite this, it’s important to remember that some issues are beyond the scope of a C-suite leader, making it vital for those in charge to recognize the scope of their role within an organization. It’s not as simple as solving every problem. Instead, it’s understanding where you as a leader are most effective and when it’s an opportunity to empower others with key tasks.
So what exactly is a CEO’s job, and where is the line between effective empowerment and centralized leadership to ensure an organization’s culture succeeds? There are some simple steps leaders can take to ensure they’re getting the balance right.
Prioritizing enterprise-first issues
First, we need to define what a CEO’s role is and what they should prioritize. CEOs should be engaged in managing all cultural activities that drive performance. Specifically, they should be involved in issues that are likely to have the greatest impact on the enterprise itself. A crucial component of success and growth in today’s rapidly changing business landscape is ensuring a long-term view sits within the leadership team.
Prioritizing external-facing issues helps a CEO do this, and ensures that the organization is focused on the big picture and working toward its long-term goals instead of endless short-term activities. A company’s day-to-day activity is often shaped by short-term and mid-term external factors like changes in demand, altering customer needs and shifting competition.
Too often, I see new CEOs focus on internal issues at the expense of building a long-term external narrative founded on where the enterprise will grow into the future. The primary focus of a CEO should be to ensure an organization is seen positively by external stakeholders, including the general public, then deliver that message internally.
This is, in part, because the CEO is often the only one held accountable for the performance and results of a company, where they are measured not by internal goals, but by the measures and expectations of a diverse and often competing set of external stakeholders.
Any challenge to the long-term viability of an organization will see the CEO in the firing line. General Electric (GE) is a great example of this. Under the stewardship of what was once heralded as the greatest management team in the world, Jack Welch transformed GE into a diversified conglomerate and stock-market winner, while instilling a focus on short-term performance and financial engineering.
Leaders must be skilled in developing and nurturing an effective brand in the minds of external stakeholders.
While this short-term focus drew loyal support at the time, as the long-term viability of GE came into question, Welch’s successor, Jeff Immelt, ultimately exited a company that was a shell of its former self – rudderless and without an effective long-term narrative in the market, outlining how it would continue to grow.
Leaders must be skilled in developing and nurturing an effective brand in the minds of external stakeholders, built on the viability of the enterprise, not just the culture of the organization itself. Without this skill, a business under the stewardship of such a leader is prone to risk, as those external voices begin to ask questions.
For instance, when a leader develops genuine connections with communities beyond their workplace – with shareholders, government and the media – they establish trusted relationships that can help them weather difficult situations and overcome skepticism directed toward their organization. This emotional capital can be crucial in buying the necessary time and patience to address any issues or concerns that arise.
The challenge for leaders rests in being able to recognize activities and tasks that may be irrelevant to their core role within an organization.
Additionally, leaders are tasked with ensuring a team around them can handle the tasks that might be irrelevant for the CEO, but are vital all the same. The question remains, where does organizational culture sit?
Leave it to the experts
Defining the core role of a CEO is a challenge, as chief executives are often seen as the superheroes of an organization, capable of anything, responsible for everything – including company performance, internal operational details, all while having a robust plan for future-driven results. Many CEOs play this role effectively.
However, a crucial but often unspoken trait of good leadership is a willingness and natural ability to be curious. Leaders who are curious ask questions, encourage others to ask questions, explore different ideas and challenge the norm, paving the way for real innovation and creativity within an organization. In fact, employees who feel their voices are heard are 4.6 times more likely to feel empowered to perform at their best.
The notion that curiosity can be good for business is not entirely new. Decades ago, Walt Disney stated that his company managed to keep innovating “because we’re curious, and curiosity keeps leading us down new paths.”
Unfortunately, a lot of leaders have lost the art of curiosity during their time as executives.
But maintaining that willingness to explore new paths is even more important in today’s fast-changing, innovation-driven corporate world, where stories move faster and engage more people simultaneously.
Unfortunately, a lot of leaders have lost the art of curiosity during their time as executives. Having become very accustomed to being right, CEOs can subconsciously favor managers and top executives that have risen through the ranks by providing fixes and solutions, not by asking challenging questions.
As this next generation of senior management moves to the C-suite, they’re accustomed to inheriting the opportunity to always be right instead of curious, perpetuating a poor model for innovation and growth.
Without showing curiosity, leaders are walking around with blinders on, failing to nurture the untapped value that comes from empowering the talent around them. Management possesses direct knowledge and experience within the day-to-day operations of the organization. This must be utilized by every CEO each day.
From my experience working with a number of leading Australian CEOs for more than a decade, the most effective leaders focus primarily on inspiring a sense of direction that unleashes collective energy and shared purpose across the organization, rather than involving themselves in day-to-day affairs.
While CEOs will continue to be the accountable ones, they need to become first among equals – empowering their senior leaders to be thought partners, surrogates and successors who can hold their own with investors, board members and employees. This is the type of talent that will allow a CEO the time and space to elevate in place and drive both enterprise and ecosystem strategy.
Effective teams usually consist of specialists that are expert at their remit. These are the people that are involved in the day-to-day running of the business and often have a more in-depth perspective on the challenges and opportunities facing the organization.
With the CEO focused on the big picture, ensuring these specialists are trusted – and feel empowered to contribute – is vital, not only to ensure a CEO is across the minutiae of the business, but to give these specialists the opportunity to grow.
From experience, there are two key areas where CEOs can enhance their performance as a leader of a business: learning to delegate, and ensuring those taking on the tasks are the right ones for the job.
Listen to your teams
Employee collaboration significantly improves employee engagement, and often the responsibility to create this sense of collaboration will come from a CEO’s ability to listen to their teams. Leaders who manage by asking questions are laying the foundation for the culture of their company or group.
Leading through curiosity helps generate more ideas from all areas of an organization and leads to increased collaboration among team members, as they become more communicative with one another, working together more effectively to achieve common goals.
Feeling valued can also lead to a sense of psychological safety within a team.
A Stanford study found that those who work in a collaborative rather than individual setting are 50 percent more effective at completing tasks, boosting their intrinsic motivation and helping them become more engaged with their work.
Feeling valued can also lead to a sense of psychological safety within a team, creating a greater sense of comfort in expressing their opinions and ideas without fear of judgment. By taking meaningful steps to foster autonomy and collaboration among all team members, leaders will create an environment where everyone can make greater contributions.
Having an environment like this inside an organization fosters a more open and collaborative working environment, delivering direct benefits to a CEO who can be more informed and more confident in their decisions.
Hire the right people
While collaboration is important, it’s vital you’re collaborating with the right kind of people, those that display effective independent thinking and a strong ability to strive for the best outcome in a group setting.
A CEO’s lasting impact is the talent they have in place to succeed them and ensure the long-term growth of a business, with those plans often being years in the making. Fostering talent that can emerge as the next leader of an organization ensures that long-term plans can be effectively executed. Nothing is more important than the continuation of an organization; if there is a failure, it will be the CEO who is seen as responsible.
There is no substitute for direct engagement and mentorship of future leaders.
There is no substitute for direct engagement and mentorship of future leaders, and while a CEO might strive to know every member of the organization they lead, in reality, it’s not possible. A good leader will only have the scope to engage with a select few.
It’s important a CEO is in a position to recognize and leverage team member strengths and manage their weaknesses to support their development, delivering opportunities to grow, not just chances to solve problems. The first step goes back to trusting those around you, in this case HR, to identify the right person for the role both now and into the future.
Focusing on the big picture
As companies move beyond the challenges brought on by the COVID-19 pandemic, a new set is emerging, as is always the case. Most notably, there is uncertainty around economic growth and corporate profitability, now operating alongside issues like talent management and retention, leaving organizations searching for solutions in increasingly choppy waters.
CEOs must remember that short-term challenges will always be there, and their role is not to solve each one but effectively manage their scope of work and focus on all aspects of the business that drive performance outcomes. The real focus of a business leader is to ensure the sustainable growth and continuation of the business.
Remember, a CEO’s success will be measured on their ability to drive forward the long-term performance of the organization they lead. By staying curious, empowering others, and having the right talent in place, a leader takes great steps in ensuring their success is guaranteed.