Best Practices: Key Executive Skill Development

The 21st Century Key Executive

Not too long ago, a strong CEO could single-handedly steer a company to the heights of corporate success. In today's accelerated markets, however, no CEO (or business) can survive very long without a competent management team made up of highly skilled senior managers. Similarly, in bygone eras, key executives could get ahead merely by excelling in their technical or functional areas. Today, however, the position of key executive demands a lot more.

Between them, TEC speakers Lawrence King and Walter Sutton have delivered nearly 1,000 TEC presentations around the world. In addition, as former chairs, they have hundreds of TEC meetings and thousands of hours of one-to-one time with CEOs and senior executives under their belts. Both agree that the role of the key executive has expanded dramatically over the past few decades. The secret to becoming a more effective key executive, they say, involves understanding your role in the company beyond your functional skills and abilities.

In particular, King believes the role of today's senior executive encompasses six basic functions:

1. Co-strategist -- helping the CEO chart the company's future course.
   
   
2. Team leader -- exerting leadership beyond your functional area.
   
   
3. Local expert -- becoming world class in your area of expertise.
   
   
4. Champion of change -- helping to implement change throughout the organization, not just in your functional area.
   
   
5. Role model -- living the vision, mission and values.
   
   
6. Student -- committing to ongoing personal and professional development.

"This short list represents your professional success profile," explains King. "Put it where you can easily see it, and use it on a daily basis to decide how to invest your most precious commodity -- time."

In addition to the above tasks, Sutton identifies nine critical areas where senior executives can support the CEO beyond just performing in their functional areas.

1. Survive. Almost all businesses get into economic trouble at some point in their life cycle. In that situation, your role as a key executive is to do all you can to help the CEO turn the company around.
   
   
2. Make the deals. A business is the sum of the deals it makes. You can have a huge impact by helping your CEO make sure the deals get made successfully.
   
   
3. Find and navigate the "river of cash." Sutton uses the term "river of cash" as a metaphor for a product or service. Finding and navigating the river of cash means developing and taking to market products or services that generate ongoing revenue streams.
   
   
4. Discover the secret of the business and use it. Every business owner or CEO has a "secret" -- deeply-held values and convictions about what makes the business really work. The more you know about the secret, the better job you can do of helping your CEO achieve his or her vision.
   
   
5. Bear debt and allocate profit. You can't survive as a key executive unless you know your own personal debt. Strive to achieve personal financial victories without tying them to personal financial obligations to the company.
   
   
6. Apply the rule of entrepreneurs and managers. In essence, this rule says that most entrepreneurs don't make good managers and most managers don't make good entrepreneurs. Accordingly, the CEO should focus on doing a few things very well (vision and strategy) while you focus on the day-to-day stuff.
   
   
7. Build a society and define the season. The CEO is the biggest culture-setter in the business, but you have tremendous influence over your functional area. Rather than just letting it happen, consciously build the culture you want in your department.
   
   
8. Acquire and exercise vision. CEOs typically take their secret and project it as far as they can into a variety of places. Eventually, it lands someplace interesting and the CEO says, "Let's go there!" Developing that kind of vision will separate you from the other employees.
   
   
9. Live a life. Every person has four compass points in relation to life balance -- mind, body, heart and spirit. Balance for the key executive involves going to each compass point and seeing if you "own enough shares" to be able to do what you want to do. If not, take some time to invest in those shares.

Closing the Gap: Creating Alignment with Your CEO

Based on their experience as former TEC Chairs, Sutton and King believe that a huge gap exists between what CEOs want from their direct reports and what those direct reports think their CEOs want. Obviously, CEOs expect key executives to excel in their given areas of expertise. Beyond that, however, the waters start to get a bit muddy.

According to King, TEC CEOs desperately want three things from their key executives:

1. Clarity. In particular, CEOs want their key executives to have clarity in regards to their vision for the company, their strategy to achieve that vision, and their expectations for the key executive's functional position.
   
   
2. Leadership. King defines leadership for key executives as "stepping out of your comfortable, technical/functional role and expanding beyond the areas that got you to your current level of success." It means doing what you can to move the company forward. This requires exercising leadership on the management team you are part of and for the departmental team you head up.
   
   
3. Generalized problem solving. CEOs want managers who can solve problems in many areas of the organization. The more you can contribute to the CEO's job of removing obstacles to getting the job done, the more value you will have as a key executive.

"Of these three areas, clarity is by far the most important," argues King. "When the CEO has clarity and alignment with a strong management team, anything is possible."

Sutton sees the disconnect between CEOs and key executives as a wiring problem. He believes that most entrepreneurs are hard-wired very differently than their direct reports. In particular, CEOs spend much of their time out in the future, where very few people roam. They see what doesn't exist and try to make it happen.

In contrast, key executives live in the present, partly because that's their nature but also because that's what they've been charged to do -- run the company (or parts of it) in an efficient and effective manner. They see what already exists and strive to make it better. CEOs who fail to understand this critical distinction end up with unrealistic expectations for their key executives, which often leads to friction in the relationship.

The solution, says Sutton, is two-fold. First, both sides must understand that CEOs live out in the distance and key executives live in the here-and-now. Second, they must reach an alliance based on mutual respect and tolerance for each other's different roles and ways of looking at the world. In this alliance, the key executive understands and supports the CEO's need to look into the future and develop the vision, because without it, the company will quickly die. In turn, the CEO recognizes and accepts that the highest and best use of the key executive's time and attention is to run the company in the present.

"The key to avoiding unproductive conflict is to formally recognize the different roles in every encounter," explains Sutton. "For example, when the CEO gathers the management team to do strategic planning, start by going around the table and recognizing everyone's role. When you meet individually with your CEO, begin the interaction with a brief recognition of the different roles each of you fill. Over time, it becomes ingrained into the culture."

King offers a simple but effective solution -- once a month the CEO and key executive schedule a "direct report one-to-one" in which they discuss the short- and long-term expectations for the position and the developmental goals and objectives for the key executive. The CEO also provides any coaching, resources, etc., the key executive needs to get the job done.

To augment this process, King suggests holding a one-to-one-to-one whereby the TEC Chair, the CEO and key executive get together once a quarter. One format involves having the key executive sit in for 30 to 60 minutes of the CEO's regular one-to-one with the TEC Chair, and the chair facilitates the discussion.

"Don't sit back and wait for something to happen," advises King. "If you aren't getting clarity from your CEO, ask for it. There's nothing magical about this process; it's very straightforward. But common sense is not necessarily common practice. You have to commit to making it happen."

How to Add Value as a Key Executive

King and Sutton offer five strategies for increasing your value to your organization.

1. Manage your time effectively. Time management for senior executives involves making sure that you spend your time in the highest-impact areas. King recommends a process called "time auditing" to ensure that you work on the right things. First, ask yourself three questions:
   
   
• In my position, what are the six most important things I do each month?
  
  
• What are the six most important things I do to build and lead my team/department?
  
  
• Is there any overlap between these two lists?

Next, take out your calendar or daytimer and examine the relationship between your most important things and where you spend your time. When you find large gaps, adjust accordingly.


2. Cultivate the discipline of self-review. Once a month, schedule a one-to-one with yourself. Write it down in ink in your calendar and show up at the appointed time. Create an agenda for each self one-to-one and bring the tools of your trade -- laptop, legal pad, sales reports, monthly financials or whatever you need to get the job done. During your work time, create a list of the most important things you will accomplish during the next 30 days and how you will accomplish them. At the beginning of your next self one-to-one, review your list, check off what you actually accomplished and write down the steps you need to take to complete any unfinished items.
   
   "Learning doesn't occur in writing to-do lists, it occurs in reviewing the things you have or have not accomplished and looking for ways to improve them," notes King. "Schedule some quality time with yourself each month and watch your productivity soar."
   
   
3. Be a strong advocate for your function/area of expertise. To improve your value as a key executive, become an appropriate advocate for finance, sales, human resources or whatever function you happen to represent. Advocating your position doesn't mean playing politics or engaging in turf-defending activities. Instead, it means articulating the value your department/functional area brings to the organization and making sure your point of view gets heard and acknowledged by others on the management team.
   
   "In strong organizations, all the functions get represented equally at the table," says Sutton. "The key is to do it in a way that supports the team as opposed to fractionalizing it."
   
   
4. Be a strong team player. As a key executive, you must perform at a high level on two different teams -- the management team you're a part of and the team of people who work for you. According to Sutton, serving the management team well requires answering the following questions:
   
   
• What are the rules for playing on this team?
  
  
• What, specifically, are we trying to accomplish as a team and how can we do it better?
  
  
• What do I contribute to the team and what are your expectations for me?
  
  
Creating a high-performing team of people underneath you requires understanding the fundamental rules of team-building, which are covered in How to Build a Strong Team.


5. Manage the relationship with your CEO. Perhaps the most important thing you can do -- for your own benefit as well as that of the organization -- is to manage the dynamic relationship between yourself and your boss. Don't abdicate that responsibility to your CEO. Instead, push the relationship as needed and develop one that represents your views and needs with authenticity and integrity.
   
   "Ultimately, your effectiveness as a key executive begins and ends with your level of clarity around the CEO's goals and objectives and how you fit into achieving them," says King. "You can sit back and say 'Yes, boss, whatever you want,' and hope that you hit the target. Or, you can take charge of the relationship and get what you need to succeed."
   

How to Build a Strong Team

As a key executive, one of the best ways to exercise leadership in your company is to put together a top-notch team of people working underneath you. According to King, high-performing teams share a number of important characteristics:

• Clarity
  
  
• Commitment
  
  
• Communication
  
  
• Absence of cynicism
  
  
• Diversity
  
  
• Productive conflict
  
  
• Project-orientation
  
  
• Scorecards

"When building your team, strive to create an environment of 'high-level adult play,'" advises King. "Give people challenges, recognize their efforts and celebrate the wins. Talented people flock to that kind of environment."

To build a high-performing team, King recommends the following steps:

1. Using a scale of one to 10, assess the individuals on your current team according to their technical contribution, team playing ability, communication skills, hustle factor and interpersonal relationships.
   
   
2. Conduct a global rating of the team as a whole, using the same one to 10 scale.
   
   
3. List the strengths and weaknesses of each individual and your team.
   
   
4. Identify ways to build on the strengths and improve the weaknesses.
   
   
5. Set a goal of having a "9+" team and coach the players to improved performance.

Sutton asserts that one of the best ways to build relationships with team members is to communicate with them on an individual basis. He recommends monthly one-to-ones with the people who work for you, using the following guidelines:

• Schedule each one-to-one in ink and stick to your commitments.
  
  
• Each one-to-one should last 30 to 60 minutes.
  
  
• Make it their one-to-one, not yours. This is an opportunity for the people who report to you to talk about anything they want.
  
  
• Guarantee confidentiality.
  
  
• Ask a lot of questions and listen carefully.

"Great one-to-ones will strengthen your relationships with the people who report to you," says Sutton. "More important, your people will work very hard for you because you listen to them."

To keep your team functioning like a precision instrument, King offers the following suggestions:

• Conduct an annual team-centered strategic planning session.
  
  
• Conduct quarterly reviews of your annual plan.
  
  
• Conduct an annual team review.
  
  
• Use a scorecard.
  
  
• Tie compensation to team performance.
  
  
• Celebrate success.

"Leadership is no longer about command and control," he explains. "To build strong teams in today's workplace, you have to sell and enroll. You have to win people's hearts and minds. The mark of a great team leader is the ability to sell people on the exciting vision and enroll them in their contribution to making that vision a reality."

How To Succeed as a Second-In-Command

According to TEC speaker Steve Coffey, success as a second-in-command -- regardless of whether your title is president, COO or head of operations -- depends on your ability to accomplish two essential tasks: managing the business and managing your relationship with your boss. To manage your relationship with your CEO and maximize your chances for success, Coffey recommends an eight-step process:

1. Know the CEO's vision for the company.
   
   
2. Help your CEO discover his role in that vision.
   
   
3. Help your CEO do the right things.
   
   
4. Define your role as the CEO sees it with precision and clarity.
   
   
5. Know your individual management styles.
   
   
6. Establish a formal method of communication.
   
   
7. Get feedback on your performance.
   
   
8. Redefine the organization structure.

To enhance your ability to survive and thrive as a second-in-command, says Coffey, keep the following in mind:

• Define company objectives and manage according to those objectives.
  
  
• Identify the CEO's new role, highlight his contribution within the whole company and assist him in his new role.
  
  
• Keep the CEO informed. Bad news is okay as long as it doesn't come as a surprise.
  
  
• Insist on holding to your meeting/communication schedules. Unless you communicate on a regular basis, you will both be working off assumptions.
  
  
• Stretch your authority. If you're not sure whether it's your call or the CEO's, assume by default that it's yours.
  
  
• Put yourself in your CEO's shoes from time to time. This will allow you to be a step ahead or at least in sync with your boss.
  
  
• Accomplish the business objectives you have set. This will demonstrate your ability to produce results and improve your chances of survival when tough times hit and everyone is scrambling.

"Above all, pay attention to the CEO and manage the relationship," concludes Coffey. "Don't allow yourself to so get buried in the nuts and bolts that you forget who you're working for."

Contributing Experts:

Steve Coffey

Steve Coffey is president of Coffey Management Company, a corporate turnaround firm that provides advisory and management services to under-performing and distressed companies. In various high-level engagements, he has served in CEO, president, COO and CFO roles, providing leadership in such areas as financial restructuring, crisis management, strategic, marketing and operational plan development and implementation; as well as reorganization of management structures and systems. Steve addresses TEC and other business groups on "Growing Pains: Successfully Transforming Your Company to Support Your Sales Growth Potential," "Hiring a Strong #2 Executive," and "Corporate Renewal." He serves on several corporate advisory boards and is a former TEC Chair in Orange County, Calif.

Lawrence King

One of TEC's all-time most popular speakers, Lawrence King has given more than 400 presentations to TEC groups around the world. His TEC presentations, "Entrepreneurial Team Building for Strategic Success," and "The Entrepreneurial Coaching Lab" provide CEOs with the vision, methods and skills to build a top-flight entrepreneurial team. A former TEC Chair, King created two of TEC's most innovative programs: the Key Executive Program, which provides a TEC-like experience for the key managers of the CEO's team, and TEC On Campus, which provides the same kind of challenging experience for M.B.A. students at UCLA's Anderson Graduate School of Management. A member of the elite "TEC 200 Club," King is the only person to receive both of TEC's most prestigious awards: the Maurice Mascarenhas Award (1994), presented to the top speaker of the year, and the Donald Cope Memorial Award (1991) for his career contribution to the TEC community.

Walter Sutton

Walter Sutton is a writer and consultant who counsels CEOs undergoing significant business and life changes. He also helps companies forge strong multi-disciplinary, self-managed senior management teams that can effectively support entrepreneurial CEOs. A former TEC member, he founded and grew four companies during his 23-year career as a CEO. He has served as a TEC Chair in Vancouver, B.C., and has written a book, "The Secret," which frames his observations and theories about the job of being a chief executive and entrepreneur. Walter has delivered nearly 500 presentations to TEC and KEY groups, and was the winner of the Maurice Mascarenhas Speaker of the Year Award in 2001.

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