In the words of American motivational writer William Arthur Ward, “The pessimist complains about the wind. The optimist expects it to change. And the realist adjusts the sails.”
For John Maxwell, this quote represents more than a nifty bit of wisdom. After all, as the author of “The 21 Irrefutable Laws of Leadership” explains in one of his Minute with Maxwell video clips, he had the meaning of Ward’s words drummed into his brain as a kid whenever his father would exclaim: “John, don’t just stand there. Do something.”
Maxwell’s father constantly reminded his son that complaining and wishful thinking are no substitute for “adjusting the sails to take advantage of the winds.” As a result, Maxwell learned early in life that realists and leaders alike are always ready to set a new course because it creates traction and offers some control over changing situations, “regardless of how the winds are blowing.”
This is a lesson I learned very well in 1996, when I was appointed president and CEO of Paragon Information Systems, a subsidiary of Newfoundland’s NewTel Enterprises Inc., and it speaks to a foundational element of leadership, or at least effective leadership.
I genuinely believe successfully steering an organization in the desired direction requires being able to effectively set organizational sails, not to mention reset them, and do it under adverse conditions—which requires an ability to filter out the noise while maintaining long-term perspective and placing logic, not emotion (no matter how genuine), at the helm. And in my humble opinion, no first-time CEO is completely ready for the role.
Obviously, most new CEOs have previous leadership experience that provided the opportunity to develop the skills and approaches that the job demands. But no matter what level of confidence or experience someone has when first appointed to the top of the executive suite, they will still need to “grow” into the position because unexpected challenges await.
Simply getting comfortable with the role is easier said than done.
There is almost always a pivotal moment when a new CEO realizes they are no longer responsible for just what they do and say but that they are ultimately responsible for the words and actions of everyone in their organization. Given the significance of this increase in responsibility, this moment of realization is sobering, at least for leaders who understand that authority can, and should, be delegated—but responsibility cannot.
A new CEO title, of course, can also deliver a strong sense of purpose as you realize the opportunity you have to put your own imprint on an organization as you lead it forward. In other words, while being ultimately responsible for the wellbeing of an organization and all its stakeholders is challenging, it can also be extremely fulfilling.
At Paragon, I had the unique opportunity to rebuild and reorient the company at a pivotal time in its history, not to mention at an interesting time in the broader IT industry. In 1999, Paragon merged with three other companies to form a new national IT company known as xwave Solutions—where I ran Newfoundland operations before being appointed to lead the company’s European expansion as president and CEO of xwave Solutions Ireland. In 2005, the St. John’s International Airport Authority recruited me to serve as president and CEO, a position I held until retiring in 2019. During my time at the Authority, which had been privatized in 1998, I had the opportunity to lead the rapid growth and modernization of Newfoundland’s primary transportation gateway.
As the former head of two subsidiaries of a publicly traded company, and the former head of a non-profit corporation previously part of Transport Canada, I am fortunate to have enjoyed a long and interesting career across the telecommunications, information technology, and air transportation sectors. Each of my CEO roles, which accounted for half of my 46 years in business, enriched my life by filling it with leadership opportunities and challenges that had no precedent and came with no clear roadmap or operating manual to follow.
As a CEO, I saw a lot, experienced a lot, and learned a lot from my own successes and failures, and from observing other leaders. But this article is not a presentation of management theory. Rather, it is a compilation of what I consider sound advice presented to new and aspiring CEOs by a retired one with more than two decades in the role across three different organizations.
The goal here is simply to help others set and reset their own organizational sails successfully enough to achieve the rewarding executive journey that I was lucky enough to have experienced. With this in mind, I will share key learnings from my career related to governance, financial stewardship, strategy, culture, structure, team building, and leadership.
Good Governance Makes Things Work
A description of governance I’ve found useful is that it is the system by which an organization is controlled and operates, and the mechanisms by which it and its people are held to account.
My own experience is that there are actually two distinct, but compatible, layers of a good governance model that must align to ensure organizational success. These two layers are (1) organizational governance and (2) the board and CEO relationship.
The first layer relates to the best practices of governance that an organization adopts to present itself to the external world. The entire organization must work together to ensure robust compliance with all financial, regulatory, legal, and environmental obligations. Also important is alignment with the ever-changing landscape of social/cultural developments in such areas as inclusive hiring and a full range of protections for the safety of employees, clients, and suppliers. I’ve learned that there is a strong link between an organization’s overall governance model and its brand since its image and culture will ultimately reflect the quality of its oversight.
The second layer of governance relates more specifically to the relationship between the CEO and the board of directors, how they interact, and the defined role that each party should play. A transparent, functional relationship between the board and the CEO is fundamental to any successful tenure as a CEO. It is also essential to ensuring that the organization establishes and maintains the best practices of good corporate governance.
While directors hold the ultimate authority in any organization, a good governance model will clearly define the board’s mandate, in contrast to the mandate of the CEO and the senior leadership team—because they are different.
In my view, a strong governance model is evident when the board’s focus is on the overall vision and strategic direction of the organization, and the CEO’s focus is on running the business and achieving the organization’s strategic objectives. Such a governance model ensures a functional and respectful relationship between the two entities and contributes to strategic success.
If board members delve into detailed operational matters and/or directly contact members of the leadership team other than the CEO, it will create confusion and dysfunction. Conversely, if the CEO or other leaders attempt to deal with matters that are the exclusive purview of the board, then this is also dysfunctional and adds no value to the organization. Overreach in either direction must be controlled by the governance model and any departures from it must be addressed immediately by the board chair and CEO. There is typically no shortage of important issues to deal with in any organization, so a disconnect between board members and the CEO should never be added to that list.
My advice to any new or aspiring CEO is to ensure there is clear agreement on this layer of the governance model while being recruited for the role, as it will prevent future governance challenges. I took this approach with each of my CEO roles, first during my recruitment by the board’s selection committee, then separately with the chair and each board member. The result was a constructive, collaborative, and respectful relationship between me, as the CEO, and all the boards with whom I worked.
It is particularly important that there is complete agreement on the governance model between the CEO and the chair, who have both the responsibility and authority to remind board members and senior leadership team members of their respective mandates. My practice was to meet with my board chair every couple of months to ensure clear communication, exchange feedback, and provide them with information on developing matters that may find their way to the board table. A board chair should never be surprised or blindsided at a meeting, and I encourage every CEO to keep this in mind.
New or prospective CEOs should expect to spend up to 20–25 per cent of their time dealing with board matters. This includes meetings, discussions with individual directors, and time spent dealing with board-level considerations. This time is well spent when it serves to cultivate a professional, productive board relationship and a functional corporate governance model, and it should be valued as such.
Strong Financial Stewardship Improves Your Sleep
CEOs hold many important and diverse responsibilities to protect the health and sustainability of their organization—it’s part of what attracts us to the role. In my experience, one of the responsibilities near the top of the list is establishing best practices for financial stewardship throughout the organization.
A CEO must accept this accountability unconditionally.
Obviously, the need to ensure the optimal level of financial performance in both the short and long term is evident for the purposes of achieving strategic financial targets, enabling key investments, and delivering expected shareholder returns.
But there is another dimension of this for the CEO that relates directly to their relationship with the board of directors. The CEO/board relationship is particularly sensitive to the strategic management of the organization’s financial health. If the board senses that the stewardship of “all things financial” is less than what it should be, trust in the CEO can erode quickly. So, I can offer two pieces of advice in this area to current and aspiring CEOs: be transparent and hire a strong chief financial officer.
Timely, straightforward, and unvarnished financial reporting is essential and foundational when dealing with directors. Any potential board concerns about financial stewardship will be exacerbated when board members have reason to wonder if they have all the relevant facts. A lack of transparency may even lead board members to conduct their own fact-finding missions by contacting other members of the senior leadership team, which, as mentioned earlier, causes confusion and dysfunction in the organization.
Equally important is having a CFO with a broad range of financial experience and skills, along with a bias towards strategic thinking and strong financial governance. The ideal CFO is a person with unimpeachable integrity who is comfortable speaking truth to power. Such a CFO will quickly become a trusted advisor and a partner in ensuring the required level of financial stewardship. I was the beneficiary of such quality CFOs throughout my career as a CEO, and I cannot overstate their value.
And, because of that, I always slept well.
Laser Focus on Strategy Gets You Where You Want to Go
Early in every one of the strategic planning sessions I led, I shared the following quote from Lewis Carroll’s book Alice in Wonderland with my team: “If you don’t know where you are going, any road will get you there.” It’s the reply from the Cheshire Cat to Alice as she’s trying to navigate Wonderland and asks, “Can you tell me where I should be going and how I can get there?” I believe this statement has great relevance when starting a strategic business planning exercise, since every organization needs to have a laser focus on its ultimate strategic destination and the path it must follow to get there.
Early in every one of the strategic planning sessions I led, I shared the following quote from Lewis Carroll’s book Alice in Wonderland with my team: “If you don’t know where you are going, any road will get you there.
Regardless of size, all organizations possess a finite amount of “energy,” where “energy” is defined as time, money, and people. Determining how and where to invest this “energy” for the greatest advantage of the organization is the essence of strategic planning. Failure to establish strategic priorities and a clear direction—along with ill-advised investments and a lack of focus—will, at best, undermine performance and, at worst, severely damage the organization’s future prospects.
Strategic planning efforts should be championed by the CEO. The board and other senior leaders should be involved of course, but it is the CEO who must drive strategic planning given their prime responsibility for the health and growth of the enterprise. It is difficult for me to understand how anyone could lead an enterprise without the benefit of the direction and guidance provided by a robust strategic business plan—it would simply be far too random.
Strategic planning has always been essential, but global trends, coupled with the ever-increasing rate of change in recent years, have served to heighten the importance of determining strategic direction, key priorities, and the investments of time, funding, and people required to advance the organization. Such trends also mean that the planning horizon of strategic business plans should now be shorter—two or three years versus five years—since assumptions more than three years out have become less reliable. As well, annual reviews along with any required refinements are essential elements of strategic management.
Hope is a powerful emotion and it’s good for humans to possess it. However, as has been universally said, hope is not a strategy, and it cannot be the basis on which any business looks to manage its growth and ensure its future. For strategic planning, time must be taken to:
- thoroughly understand opportunities and threats in the external environment
- honestly assess internal organizational strengths and weaknesses
- define what an ideal future for the entity would look like
- determine a reasonable number of major strategic objectives (three to five, in my opinion)
- put in place specific and clear strategies to achieve the set strategic objectives
- inform and engage employees to ensure their participation in executing the strategic business plan
Important things typically don’t just happen organically—they have to be thoughtfully and strategically pursued. The CEO is the individual who must drive this process and who must select the relevant measures of success to accurately determine if there is meaningful progress along the desired path.
Beyond the obvious benefits of a thoughtful strategic plan, I’ve learned that there are two other notable benefits for the CEO—engaging the board, and team building.
First, a compelling strategic plan will engage directors at the right level of involvement. It will also appropriately engage a parent company if the organization is part of a larger, diversified entity.
Second, the process of building a strategic plan with your senior leadership team will have a galvanizing effect on the team itself, as the entire leadership group takes ownership of the plan they helped to build, understands how it fits together, and commits to the level of collaboration necessary for strategic success.
Strategy and Culture Must Be Aligned
One of the most important lessons I learned in my CEO career is the need to align organizational culture with organizational strategy, and to advance them together.
Unless you engage and equip the people in your organization to understand and embrace the important changes called for in a forward-looking strategic plan, the potential to achieve worthwhile strategic progress becomes much less certain. Without advancing the organization’s culture in meaningful ways, employees are more likely to fear and resist strategic changes, not to mention lead them to find creative ways to undermine them. The well-known statement that “culture will eat strategy for lunch” is applicable here.
However, my experience is that the vast majority of employees want to understand their employer’s organizational strategy and how it will affect and benefit them. There are many effective ways to invest in corporate culture so that employees are more comfortable to welcome and help execute a new organizational strategy, and the following paragraph shares some of the culture-advancing approaches I have successfully used in the companies I led.
I made it a regular practice to personally present the entire strategic business plan and its major priorities and objectives to all employees—typically in small groups to increase their level of participation—and invited their clarifying questions and their suggestions for improvement. We also engaged employees at all levels of the organization in the various action teams and strategic initiatives that were required to “put legs under” the organization’s major objectives and strategies.
Whenever a new strategy required employees to develop higher skills, we would invest in a structured and comprehensive training program for those employees. If employees were unionized, we would present the strategic plan to the union leadership to remove any confusion on their part about our intentions and to address any concerns. We also made it a practice to celebrate our company’s collective strategic successes along the way with the entire employee team. I made it a habit to keep my office door open when not in meetings, held periodic Coffee with Keith sessions with small groups of employees, and resisted the creation of executive-only enclaves in our buildings.
Other culture-advancing investments included linking a portion of individual compensation to the achievement of strategic objectives, and also adopting a clear human resources policy of promoting from within the organization wherever skills and employee ambition aligned.
All of these investments to develop the corporate culture have the singular goal of creating an environment where mistrust and fear of change are diminished, while information sharing, mutual respect, and participation are increased. I should note that it’s rare to see 100 per cent of employees embrace such culture-building initiatives right away, as some just need time to test the sincerity of your intentions. However, my experience has been that initially engaging a majority of employees is a valuable start to the process. Other employees will engage over time once they find a way to work through their individual trust issues.
I found that one of the greatest benefits of this approach is that each employee has the opportunity to clearly understand how what they do in their role contributes to the success of the entire organization. The positive attitudes that flow from this knowledge are remarkable and go a long way in engaging employees in the implementation and execution of the strategic plan. My experience is that most employees genuinely want to know that the contributions they make throughout their careers are a meaningful use of their talents and energies, and that they are recognized as such by their employer. In fact, I would contend that informed and engaged employees can be an organization’s greatest asset—perhaps, its only source of sustained competitive advantage.
The need to align strategy and corporate culture is articulated well in the following quote from the respected author on leadership Carol Kinsey Goman: “Organizations don’t change. People do—or they don’t. If the human beings in your organization don’t trust leadership, don’t share the Vision, and don’t buy into the reasons for change, then there will be no successful change, regardless of how brilliant your strategy is.”
Structure Must Follow Strategy
Through my career, I observed that there are many ways to structure an organization and that there are many factors that can influence organizational design. These factors can include such things as historical precedent, personal bias, individual ambition, short-term financial considerations, and even board influence.
My experience is that organizational structure should be primarily determined by an organization’s strategy. Once an organization has thoughtfully determined its strategic priorities and objectives, then the organization should be structured to best enable the achievement of these strategic objectives. This may require such actions as (1) consolidating departments or divisions to improve business processes, (2) creating new departments or units to leverage strengths or correct weaknesses identified in the business plan, or even (3) abandoning activities that no longer support a new strategic direction and then re-assigning the affected people to more strategic pursuits.
If organizations are structured for reasons other than to support the achievement of strategic objectives and/or to better serve clients, then further re-organizations will inevitably follow when the plan falters and the structure will then hopefully become aligned with the strategy.
Stock Your Leadership Team with Leaders
Throughout my career I was surprised with how often I observed executives and managers who were reluctant to build their teams with individuals possessing levels of intelligence and experience that matched or exceeded their own.
Perhaps it was due to their intimidation resulting from low self-confidence as a leader, a lack of emotional intelligence, or a concern that their subordinates may look stronger than the leaders themselves in their eyes or the eyes of their boss. Whatever the reasons, this reluctance demonstrates weak leadership and lost opportunities.
When building teams, I consistently looked to surround myself with the brightest, most capable people available. I invested in them, presented them with challenging and interesting assignments to sharpen their skills, delegated authority to help develop their decision-making abilities, and gave them exposure to more senior leaders in the organization. Just as importantly, I regularly engaged them in key decisions, routinely seeking their input and counsel even when it differed from my own perspective. As a result, I benefited from having teams of intelligent, trusted advisors who were keen to learn and grow as leaders in their own right, to pursue strategic objectives, and to add value to the organization.
My advice to CEOs and other leaders is to stock your leadership teams with leaders. Look to engage the sharpest, most capable, and most confident people available as you build your teams. It’s also critical to build diversity of experience and opinion on your teams, rather than simply engaging people who regularly share your own views. Accommodating and encouraging diversity of opinions around the leadership table will inevitably lead to more thoughtful, more strategic, and more relevant decisions.
An additional benefit of recruiting and developing strong talent is that it establishes a solid foundation for any organization’s succession planning. I believe every CEO should help plan for their ultimate replacement by giving the board of directors the option of finding the next CEO within the organization. Building a senior leadership team populated by talented and strategic people will help enable the long-term sustainability of the organization.
I’ve observed a unique dynamic and a special energy generated by high-calibre leadership teams that help to create an enjoyable employment experience for all concerned—you might even call it fun.
And keep in mind that nobody ever said you can’t have fun at work!
How You Lead and What You Say Matters
As a young manager, I learned a couple of important lessons about leadership and communication that were reinforced during my time as an executive and a CEO.
First, I learned that the leadership style of a manager, executive, or CEO will inevitably shape the leadership style of their direct reports—positively or negatively. If a leader demonstrates a thoughtful, facts-first approach to the job, then their direct reports are likely to replicate it. If a leader leads in an open, collaborative manner, then direct reports are more likely to follow suit with their own teams. Conversely, if a leader’s style is autocratic, opinion-based, stress transmitting, and characterized by finger pointing, then a similar approach may be adopted by subordinates who believe it’s necessary for self-preservation.
The opportunity for leaders to model the change they want to see in their organization is remarkable and should be seized.
Second, I learned that what leaders say—and how they say it—matters a great deal to those receiving the messages. This is particularly important if the organization is experiencing any type of crisis because the choice of words and tone can either signal calm or exacerbate an already challenging situation. Even if people cannot recall exactly what you said, they will always recall how you said it and how that made them feel at the time.
My advice to leaders is to consistently take the time to reflect on what you say or write. Sleep on it if you have the time. Avoiding knee-jerk reactions, speeches, or e-mails in favour of a strategic communications approach will help to reassure people and help build a constructive corporate culture. As well, honest, consistent communication builds trust and employee engagement.
There is no question that CEOs are held to a high standard. But this is perfectly appropriate. After all, how they lead and how they communicate drives an organization’s brand by helping establish the “personality” of the culture in a very tangible way.
Taking on this responsibility is challenging, but it offers an opportunity to make a genuine difference that few people will ever have the chance to experience, so grab hold of it!
The foregoing thoughts and observations have hopefully given you a sense of how I valued my 20-plus years as a CEO, along with how remarkable the learning was for me. Most days I wouldn’t trade it for a villa in Tuscany.
I sincerely hope that at least some of what I’ve said will be of value to you in your own leadership careers. I’ll leave all you current and aspiring CEOs with one final tongue-in-cheek lesson: It’s OK for a CEO to take a little of the credit when things are going well because, when things go badly, they may get all of the blame.
Wishing you success at setting your own sails.
