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Consulting giant McKinsey&Company issued a white paper called, “What makes a CEO ‘exceptional’?” where they assessed the ‘early moves’ of CEOs with outstanding track records. In reading it, I couldn’t help wonder the extent to which their findings were equally applicable for ‘non-CEOs’ making ‘non-early movers’, as well.

Let’s take a look.

Who Outperforms Whom?

Source: McKinsey&Company

According to McKinsey’s research, CEOs hired from the outside were more than twice as likely to achieve exceptional results (as defined by their delivering +500% growth in total returns to shareholders over tenure, normalized for performance across their industry) as their internally-promoted counterparts.

That’s not to say that internally-promoted CEOs were never exceptional. In fact, more than 55% of all CEOs promoted from within achieved exceptional results, versus 45% of CEOs hired externally. (In raw number terms, of the 599 CEOs studied, 22 of them reached ‘exceptional’ status – 10 hired from the outside, and 12 from within.)

So while the probability of an outside hire creating exceptional results is greater, the possibility of someone promoted from within achieving similar outcomes is very, very real. As long as they work on the right things.

How They Did What They Did

So what did those exceptional CEOs do (and not do) – regardless of whether they were hired from the outside or promoted from within – that led to their achieving such markedly better results than their lesser-performing counterparts?

Source: McKinsey&Company
  1. Strategic Reviews – Highly-successful CEOs were about 60% more likely to conduct a strategic review in their first two years on the job versus the average CEO. True, CEOs joining low-performing companies derived the biggest benefits from conducting strategic reviews, but interestingly enough, exceptional CEOs did not join struggling companies in disproportionate numbers. Regardless, based on the insights gleaned from those strategic reviews, exceptional CEOs were much bolder in the number of strategic moves they made later that same year.
  2. Cost-Reduction Programs – Changing strategic direction often requires the freeing up of resources, so it’s not surprising that exceptional CEOs also focused on cost-cutting initiatives, especially in lower-priority parts of the company.
  3. NOT Organizational Redesign or Management Re-sfuffling – This one’s a bit counterintuitive, but while organization redesign and reassigning management to lead different functional areas are often considered “a critical part of the typical high-performing CEO’s tool kit” – and tends to be an early priority for CEOs taking over lower-performing companies – exceptional CEOs were “far less likely than the average CEO to undertake organizational redesign or management-team reshuffles in the first two years in office.”

Implications for Non-CEOs

So how might this inform us as to how we might raise our games to become exceptional performers in the organizations that already employ us, even if we’re NOT their CEOs – or not newly promoted? Here’s some of what’s coming up for me:

  • See with Fresh Eyes – Start by looking at old things in new ways, as an outsider would. Challenge those long-standing assumptions. This will likely yield a number of insights and possibilities you’ve probably been missing. The key is in being as objective and non-biased, as possible, which is not an easy task, so you may want to bring in an outside coach or consult to help with that. You can start by yourself, though, by just focusing your attention on whatever longstanding gripes and complaints you’ve hearing from customers, vendors, and staff, etc. That will typically point out some specific department policies, procedures, and protocols that need updating. Then contemplate, with your team. Ask: “If we were to start from scratch, how could we do this more efficiently or effectively or easily?” and “What would it actually take if we really wanted to get there?” and see what unfolds.
    • Example: Years ago, when running a telecommunications customer service operation, our customers were wanting faster turnaround times for their move, add, and change orders. And, frankly, everyone on staff was so busy, it just didn’t seem possible. But in reviewing the workflow with Fresh Eyes, we were able to discern that if we didn’t have so many orders already in queue, most new orders could be completed in 2-3 days: a day or so for processing; and one more day or so to physically configure. This led us to realize that if we put some overtime into working down the backlog, we could, in relatively short order, be able to easily cut our order lead-times in half – and still have room for sudden surprises – to the absolute delight of our customers.
  • Factor in the Money – There are countless ways that to work with money to assist your efforts. You can, as example, improve the bottom-line by cutting costs or increasing revenues. You can improve cash flow by changing payment terms or amounts, or renegotiate what’s due when. So depending on the initiative you’re working on, some ways may be less beneficial than others, but other ways can help make things demonstrably easier.
    • Example: In that same lead-time initiative, we garnered internal support by leveraging the money side of things. First, since order turnaround was admittedly slow, we began by offering our customers value-added ‘expedites’ (with considerably faster intervals at considerably higher rates – which many gladly paid). This influx of additional funds, along with some already-budgeted ‘special project’ monies, enabled us to cover all of the overtime costs needed to complete our lead-time reduction initiative, internally, which greatly expedited matters.
  • Leverage Your Successes AND Failures – Were you recently credited for helping to make something good happen? Say a polite thank you and then follow it up with a new initiative that has an even bigger upside (or one that mitigates an even bigger downside). Were you held accountable for something that didn’t work out as planned or as hoped for? Show them you learned from your mistakes and recommend a smarter way to do things.
    • Example: In the same department, we messed up a very important order for one of our most important customers, and they were now insisting that our best agent handle all their orders, exclusively, from now on. I acknowledged their concerns, and promised to make things right, but I refused to give then a single agent because, as I told them, it would be too much to THEIR detriment. Why?

      Well, first, theirs was a complex account and what would happen, I asked, if the only person who knew its inner workings was out sick, or on vacation when a critical order came in? Would they be willing to patiently wait for the agent to return? (Of course not!) So it was in their own best interest, I told them, to let us train MULTIPLE people to work their account, even if that meant that there would be a learning curve and MORE orders would likely be processed incorrectly, in the short-term because of it.

      “Which would you rather have,” I asked. “Excellence now, with a higher risk of failure in the future? Or a higher, but actively managed risk now, followed by several fully-trained and capable agents all able to work your account, with equal skill, when you need them most?!” Thank you for looking out for us, they replied. We’re surprisingly glad that the initial problem actually happened!

What Exceptional Work Might You Be Able to Achieve?

The secret, here, is that exceptional work is not particularly difficult. Sure, it can be challenging, but if you know what you’re trying to achieve – and it’s something truly worth achieving – the priorities are not that difficult to figure out. It’s then a matter of using your resources and resolve to bring things to their successful completion – sooner rather than later, rather than not at all.

Dare to be that good at what you do!

Post Script

I hope this post has helped you learn something about yourself. If so, please make a point to share your insight with others as a way to "lock in" your learning.

While you're at it, I'd also appreciate you telling them about LeadershipTraction and the resources available, here, on-line, at www.leadershiptraction.com including:

     • my other blog posts
     • my leadership tutorial downloads
     • my newsletter archives
     • the curated content on my LeadershipTraction Facebook page
     • and, of course, my book, Leadership Haiku

Thanks.

- bz

P.P.S. If you have a question or comment about this post, just let me know. I'll do my best to get back to you, straightaway.

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