What do you imagine when you hear the word ‘CEO’? Ambitious, driven individuals walking through long hallways, barking orders left and right? People don’t really see CEOs as quiet, contemplative individuals. Everyone has problems, but no one knows the solutions on the go, least of all a CEO. Managing an entire company with thousands of employees and shareholders is no cakewalk. The stakes are always high. They have to be on their feet at the word ‘go’ and try not to mess up. So, how do a successful CEO’s decision-making skills set them apart?
Let’s dig into the lives of well-known CEOs and how their decision-making determines the fates of their companies.
Do, Don’t Think
According to this article published by the Harvard Business Review, a good CEO is decisive. A perfectionist who lingers on the possibility of making a better choice never makes one. However, a thriving CEO needs to be able to act and act fast. A CEO cannot be a perfectionist. Even in the face of uncertainty or lack of complete information, a successful CEO can weigh the pros and cons to make a decision that is in the company’s best interest.
There is no better example to demonstrate this than Elon Musk, CEO of Twitter, Tesla and SpaceX. In 2013, Elon Musk said that his goal with Tesla will always be the introduction of sustainable transportation through electric vehicles. He says, “Our first product was going to be expensive no matter what it looked like, so we decided to build a sports car, as that seemed like it had the best chance of being competitive with its gasoline alternatives.” He brought an investment of about 6 billion USD, became CEO and helped Tesla become the company it is. He didn’t wait around for the perfect opportunity. He created it. On the other hand, within weeks of buying Twitter, he fired several employees globally and introduced a subscription to be verified on Twitter, which caused a drop in subscribers and revenue. Regardless of consequences, this emphasises a unique leadership style – transformational. Instead of waiting around, Musk takes action and then deals with the results – good or bad.
Lesson:
What sets a CEO apart is the facility to make decisions by not mulling over the perfect possibility too much.
Balancing Relationships, Building Cultures
Most successful CEOs have been known to build collaborative and nurturing cultures for their organisation. They can engage with their team, customers and stakeholders to build a sense of shared purpose. A CEO’s vision is nothing without the cumulative effort of all people involved.
Indra Nooyi, the former CEO of PepsiCo overturned Pepsi’s presence in the market with design thinking. In an interview with Harvard Business Review, she speaks about putting herself in the customer’s shoes. She hired Mauro Porcini to collate a design team to follow through with her vision for Pepsi and shifted the company to a more centralised system. She ensured a strict but empathetic approach to ensure everyone was on board by giving them time to settle in. Similarly, Satya Nadella, CEO of Microsoft overturned the company’s individualistic culture into a more collaborative one. As opposed to ex-CEO Steve Ballmer’s ‘I am Microsoft and Microsoft is everything approach’, he proposed a ‘We are Microsoft and we can be everything’ approach. He encouraged newer ideas and helped build better teams within the company.
Lesson:
What makes a successful CEO is the ability to engage and lead without disrupting the hierarchy.
Adapt, Don’t Snap
Behind every thriving business is a CEO who walked over foreign territory and then learnt to survive. Businesses are dynamic. Not responding to a changing landscape can easily topple any organisation. A CEO needs to be ready to adapt to new challenges and opportunities and formulate effective strategies that work in the company’s favour.
Steve Ballmer was slow in jumping on to the cloud-computing revolution in the early 2000s. While it wasn’t a huge financial loss for Microsoft, it meant that other companies such as Microsoft and Google got a foothold in this nascent technology. Reed Hastings and Mark Randolph, founders and CEOs (consecutively) of Netflix, revolutionised the company from a DVD-on-demand service to an online streaming platform. The company adapted to keep with its ‘convenience-first’ policy by tackling headfirst a fast-changing digital era.
Lesson:
A CEO’s success is marked by their ability to adapt and revamp to the changing business landscapes.
A good CEO isn’t one that flings papers around and barks orders. They are ones who lead mindfully and adapt gracefully without letting their egos get in the way. There are many qualities to effectively leading a company to success, but it can all fall apart without a CEO who knows how to make decisions. The best ones are all fuelled by boldness, engagement, empathy and a willingness to adapt.
