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CHIEF EXECUTIVE CHIEF EXECUTIVE OFFICERSOFFICERS

HERE TODAY, GONE HERE TODAY, GONE TOMORROW!TOMORROW!

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A successful board has directors who are A successful board has directors who are unafraid to ask the following ten questions:unafraid to ask the following ten questions:

1.1. Do we have the right CEO?Do we have the right CEO?2.2. How well is the CEO’s compensation linked to actual performance?How well is the CEO’s compensation linked to actual performance?3.3. Does the CEO have a precise understanding of the money – Does the CEO have a precise understanding of the money –

making recipe for the volunteer organisation?making recipe for the volunteer organisation?4.4. Is the CEO and the management team looking at external trends Is the CEO and the management team looking at external trends

and diagnosing the opportunities and targets presented?and diagnosing the opportunities and targets presented?5.5. What are the sources of organic growth?What are the sources of organic growth?6.6. How rigorous is the process for developing the leadership and How rigorous is the process for developing the leadership and

gene pool?gene pool?7.7. Does the CEO have the right approach to diagnosing financial Does the CEO have the right approach to diagnosing financial

health?health?8.8. Is the CEO examining measures that capture the root causes of Is the CEO examining measures that capture the root causes of

performance?performance?9.9. Do you get bad news from the CEO and management in time and Do you get bad news from the CEO and management in time and

unglossed?unglossed?10.10. How productive are executive sessions?How productive are executive sessions?

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How effective is the CEO in:How effective is the CEO in: Managing overall?Managing overall? Shaping long-term strategy?Shaping long-term strategy? Bolstering the organisation’s image in the Bolstering the organisation’s image in the

community?community? Managing during a crisis?Managing during a crisis? Planning for top management succession?Planning for top management succession? Anticipating possible threats to the organisation’s Anticipating possible threats to the organisation’s

survival?survival? Balancing interests of different stakeholders?Balancing interests of different stakeholders? Monitoring strategy implementation?Monitoring strategy implementation? Building networks with strategic partners?Building networks with strategic partners? Enhancing government relations?Enhancing government relations?

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““We’re the good guys. We are on the We’re the good guys. We are on the side of angels”.side of angels”.

Jeffrey Skillivig, former CEO of Enron, Jeffrey Skillivig, former CEO of Enron, awaiting trial on fraud and other awaiting trial on fraud and other

federal chargesfederal charges

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The CEO is judged, in detail, on the The CEO is judged, in detail, on the following aspects:following aspects:

Volunteer organisation’s Volunteer organisation’s performanceperformance

Leadership of the organisationLeadership of the organisation Team building and management Team building and management

successionsuccession Leadership of external constituenciesLeadership of external constituencies Board intervention and leadershipBoard intervention and leadership

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WHY DO GREAT WHY DO GREAT ORGANISATION’S FAIL?ORGANISATION’S FAIL?

They fail for two major reasons:They fail for two major reasons:

1.1. Inability to escape the past.Inability to escape the past.

2.2. Inability to invent the future.Inability to invent the future.

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Inability to escape the past!Inability to escape the past!Unparalleled track record of success

Accumulation of abundant resources

No gap between expectations and

performance

A view that resources will win

out

Contentment with current performance

Resources substitute for

creativity

Inability to escape the past!

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Inability to invent the future!Inability to invent the future!

Optimised business system

Success confirms strategy

Deeply etched recipes

Momentum is mistaken for leadership

Vulnerability to new rules

Failure to “reinvent” leadership

Inability to invent the future!

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ARE WE FAIR TO THE CEO WHEN FACTORS ARE WE FAIR TO THE CEO WHEN FACTORS ARE LARGELY OUTSIDE A CEO’S CONTROL?ARE LARGELY OUTSIDE A CEO’S CONTROL?

Does the board take the following into account?Does the board take the following into account? Unforeseeable changes – either internal or imposed by Unforeseeable changes – either internal or imposed by

external events – in the circumstances in which a job is external events – in the circumstances in which a job is carried out?carried out?

Poorly defined responsibilities?Poorly defined responsibilities? Inappropriate or unachievable objectives or targets?Inappropriate or unachievable objectives or targets? Insufficient guidance or support from the board or Insufficient guidance or support from the board or

chairman?chairman? Inadequate co-operation or support from colleagues?Inadequate co-operation or support from colleagues? Inadequate resources – money, staff, equipment or time?Inadequate resources – money, staff, equipment or time? Insufficient training?Insufficient training? The job demands levels of skill or knowledge that the CEO The job demands levels of skill or knowledge that the CEO

does not have and could not reasonably be expected to does not have and could not reasonably be expected to process.process.

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““A bad reputation is like a hangover. It A bad reputation is like a hangover. It takes a while to get rid of an makes takes a while to get rid of an makes

everything hurt”.everything hurt”.

James PrestonJames Preston

Former CEO, AVONFormer CEO, AVON

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““If we were making that decision now If we were making that decision now in light of the press scrutiny we have in light of the press scrutiny we have

been receiving, we probably would not been receiving, we probably would not have taken that risk”.have taken that risk”.

Robert C WintersRobert C Winters

Former Chairman, Prudential InsuranceFormer Chairman, Prudential Insurance

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““I want a society that is based on I want a society that is based on truth. That means no longer hiding truth. That means no longer hiding

what we used to hide”.what we used to hide”.

Boris YeltsinBoris Yeltsin

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As Gary Hamel and CK Prahlad said in their As Gary Hamel and CK Prahlad said in their seminal work, seminal work, Competing for the FutureCompeting for the Future::

““Getting to the future first is not just about Getting to the future first is not just about outrunning competitors bent on reaching the outrunning competitors bent on reaching the

same prize. It is also about having one’s view of same prize. It is also about having one’s view of what the prize is. There can be as many prizes as what the prize is. There can be as many prizes as runners; imagination is the only limiting factor. runners; imagination is the only limiting factor. Renoir, Picasso, Calder, Serat, and Chagall were Renoir, Picasso, Calder, Serat, and Chagall were

all enormously successful artists, but each had an all enormously successful artists, but each had an original and distinctive style. In no way, did the original and distinctive style. In no way, did the success of one preordain the future of another. success of one preordain the future of another. Yet each artist spawned a host of imitators. In Yet each artist spawned a host of imitators. In business, as in art, what distinguishes leaders business, as in art, what distinguishes leaders

from laggards, and greatness from mediocrity, is from laggards, and greatness from mediocrity, is the ability to uniquely imagine what could be”.the ability to uniquely imagine what could be”.

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““Good intentions are not substitute for Good intentions are not substitute for good actions”.good actions”.

Marianne JenningsMarianne Jennings

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Thank YouThank You

Dr Len KonarDr Len Konar