Why You Suck As a CEO

by Tessa White, CEO The Job Doctor

I was called out for being unethical by the CEO. 

This is not something I’m proud of. I’m the head of human resources and the one person that a company should be able to count on for equity and fairness, and above all ethics. His words actually took me off-guard because I have always considered myself to be principled in all areas of my life. It would be like telling a dog they aren’t man’s best friend.  A devastating statement.

We had just finished an exercise of assigning stock options for our top performers and had received Board approval on the grants. This stamp was final, allocating the full amount of equity budgeted for the exercise.  Managers were already alerted to make the communication with their people. 

Then I found the mistake. We had inadvertently left off of our list one of our top performers. It was a woman who was on a military leave of absence which is why she had not shown up in our lists. I had forgotten to include employees who were temporarily inactive. “She’ll never know we even gave equity grants,” I said. “Why don’t we make a note and next time we give them, we will give her some extra to compensate.”

The CEO gave me a look that I usually only get from my parents when I’ve disappointed them.  “I will know,” he said. As I felt myself shrinking into the size of small ant, he continued, “We will take some of my grant and allocate it to her in the amount she should have received to make it right.” Then he proceeded to teach me one of the most important lessons I ever learned in my entire career:

Our actions as leaders are important even when we think nobody is looking. Great leaders do the right thing even behind closed doors. It is what a person does in private and not just in public that builds trust.

She got the grant and never knew it almost didn’t happen. I got a shellacking and never forgot it did happen. 

I have worked with some great leaders in my time: Stephen R. Covey of the 7 Habits fame, Bill Bennett, CEO of InsideOut Development and David Bywater, former CEO of Vivint Inc. What they all had in common was this: They understood that their job was more than directing the success of the company. They knew that with every action (or lack of action) they took, they were sending a message about what the company valued or didn’t value. It wasn’t “just business” to these leaders. It was personal. A good leader cares about strategy and results but they also care about how they get there.

Beyond setting and guiding the direction for the company, you are setting an example for the way work is done and what is rewarded or penalized.  You are being watched.  Your language—words and body language, your decisions and promises, how you resolve problems, how you treat people—it is all under close scrutiny. Even the smallest of things will be magnified.

Just ask James Clarke, CEO of Clearlink who made headlines in April for a public town hall meeting that went sideways. His comments about remote work and the sacrifices to come back into the office, may have been well received by some, but overall, he took a beating, making the front page of business news across the nation. 

In another example, I worked with the leader of a local Utah tech company who made the unfortunate statement in a company-wide meeting, that they would not have layoffs. Only two months later, he apologetically had to reverse course.  It started a domino effect of distrust, that led to significant turnover in an otherwise good company. This company likely could have weathered the storm had he simply been transparent (and more careful in his promises) out of the gate. 

Decision-making may be one of your strengths but you may need to slow down how quickly you assess and form an opinion and be very aware of the unspoken messages about what is acceptable or non-acceptable behavior. To create a healthy ecosystem where respect for others becomes part of the DNA of decision making, there are six principles that can open up, rather than shut down the potential of your people:

1. Don’t Penalize Bad News: When you ask for honesty, be self-aware of how your react. Do you find yourself making judgments or altering your behavior if the opinion doesn’t match your own? Watch yourself for penalties both verbal and non-verbal. It only takes once and you’ll shut down the frank conversations that will help you be a better leader.
2. Reward Ideas and Not Just Results: If results are your sole focus, you are training your team to be safe. The internal human operating system of people means we all want to win and not lose. Over time, getting the rewards of results will create safe and safer decisions because success (the safer that success is the less likely the individual is to lose) is what is rewarded, and not fresh thinking.
3. Don’t Require Instant Alignment: Individuals catch on to how this works quickly. There is a right answer, and a wrong answer, and it becomes clear which it is and that you expect alignment. If you aren’t careful, you’ll create a team of yes-men and women who only tell you what you want to hear and not what you need to hear.
4. Respect Those Not Present:  When you speak negatively in private about others, it is not building trust with the individual your are confiding in. It is sowing seeds of doubt as that individual wonders, “ I wonder if my leaders says negative  things about me to others.” . Have courage to speak directly to those you have something difficult to say, rather than doing it behind closed doors with someone else.
5. Listen Down:  Get outside of your own peer bubble and create opportunities to listen in your department downline, outside your function and even outside of the company. Like a puzzle, others will ask questions and fill in missing pieces with a vantage point that only they can offer.

You first have to model ethical leadership yourself to set the stage for others to do the same. Your own blind spots and hidden messages you sent to others through the actions you model or reward are setting the stage for building trusted partnerships where others ideas are heard, and where you can unleash the true potential of your people.