Will Your Boss Soar or Sink?

May 3, 2011
Dr. Linda Henman has helped executives in military organizations, small businesses and Fortune 500 companies define their direction and select the best people to put their strategies in motion. According to Henman, there are five ways to tell if your company’s CEO earns his or her pay.

Henman says she isn’t as concerned about CEOs getting paid large salaries as much as she is about them being worth it. CEOs earned an average annual paycheck of $11 million in 2010, with pay soaring by an average of 23 percent last year, according to research released by the AFL-CIO in April. Henman believes that top CEOs who actually earn their salaries are easy to spot.

“Those at the top have three major responsibilities: Develop the business, grow talent and make decisions that drive innovation,” said Henman, who is the author of Landing in the Executive Chair: How to Excel in the Hot Seat. “There is much shuffling at the top. Too often, boards don’t make wise decisions about CEOs and CFOs, and these executives, in turn, don’t make wise hiring decisions throughout the enterprise.”

If leaders do a better job, says Henman, companies can do a better job, which means individuals can do a better job. Innovative leaders create companies where customers want to do business and people can do their best work.

“That all leads to financial health on the micro level, which translates to better financial health for the country,” says Henman. “That’s why I think it’s important for people to understand if their CEO evidences the ability to soar above the competition, because in the end, only the strong will survive.”

Henman’s top qualities of a good CEO include:

  • Strategy – Strong strategic thinking defines the effective CEO. These leaders understand how to match a strong strategy with the tactics and talent to see it through. CEOS who constantly react to events, instead of planning for the future, remain followers and not leaders.
  • Decisions – When CEOs consistently make good decisions, little else matters. When they make bad decisions, nothing else matters. Even though decisiveness distinguishes leaders from everyone else, effective decision-making stands at the center of executive leadership. A decisive CEO who can’t hit the target is the same as an indecisive CEO who doesn’t even know where to find the target. The results are the same.
  • Hiring – Successful CEOs know how to tie talent to their strategies so they ensure the company hires the best and the brightest and compensates them fairly. Moreover, they give these people a chance to thrive by giving them the resources they need to be successful at the company.
  • Excellence – Leaders who attract and retain top talent stress excellence. They focus on good execution of plans and strategies, and they don’t skew the mission by placing value on tertiary issues that have little to do with execution of strategic goals.
  • Results orientation – Too many executives talk about how to motivate the troops. Those who excel in the hot seat do better. They hire people who are self-motivated, define clear objectives, hold people accountable and then get out of the way. Couple these practices with challenging, rewarding work, and the organization ends up with both better results and motivated employees.

“It all comes down to leadership, as opposed to management,” Henman adds. “Managers come in all different flavors: good, bad, neutral, ineffective, overbearing, innocuous and more. But true leaders, by definition, move people to perform at levels that allow them to beat the competition.”

Moreover, she says, leadership doesn’t necessarily come with a title or a status. Leading requires the ability to take people to places they wouldn’t have otherwise. “Leaders who possess this ability offer golden opportunities for their organizations and the people who work in them; those who don’t simply hope for a good golden parachute,” she says.

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