Chief Executive Officer roles, competencies, and situational leadership styles

Leadership

The author of this report has been asked to answer four major questions when it comes to business, leadership and the skill sets required to excel in both. The first question will center on the role of Chief Executive Office. The role itself will be defined. There will also be a listing of the comptentcies and skills that a typical or desirable CEO should demonstrate and have. The second question will center on what the effective communication skills are. Indeed, it will be defined what skills will be mastered and displayed if a business and its leadership wishes to engage its employees and excel in business overall. Third, there will be an identification and definition of three different leadership styles and how each of those styles is best applied based on the circumstances and what is needed at the time. Finally, there will be a discussion of the role of ethics in business and how ethics could and should affect everyday business decisions. Further, it will be discussed how employees can be directed when it comes to the importance of ethics in their day-to-day tasks.

Questions Answered

Role of Chief Executive Officer

Of course, most people are aware that the Chief Executive Officer, often shortened to CEO, is the lead employee and executive in the firm. While Chief Executive Officers are quite often accountable to a board of directors or some other regulatory body, the proverbial "buck" stops with the Chief Executive Officer more often than for any other position. Even the other main executives of the firm such as the Chief Financial Officer, the Chief Operating Officer and the Chief Technology Officer typically report directly to the CEO. If a business fails at a high level, the Chief Executive Officer is typically the person that gets the blame (Goleman, 2000).

With that in mind, there are some core competencies and skills that a good Chief Executive Officer should have. To finish the thought started in the prior paragraph, there is one common answer that will be found when someone asks what the objective of a Chief Executive Officer happens to be ... get results. However, saying that and defining how precisely the Chief Executive Officer should go about achieving that are two entirely different things. There is no shortage of people and leaders that are ready, willing and able to voice their opinion about what it takes and what is required for Chief Executive Officers to succeed. However, the pool of them together really fall into one of three compartments, those being strategic, financial and organizational endeavors. The key part to being a good leader for all three of those is to resemble and become the right leadership style based on the situation and circumstances at hand. With that in mind, there are six different leadership styles that many people would point to. A good leader will use all of them at one point or another and they will know why to use what approach and when. Those six styles are coercive, authoritative, affiliative, democratic, pacesetting and coaching. Some of those might not sound like a good idea to use (e.g. coercive, etc.) but there are scenarios where all of these are usable (Goleman, 2000).

A coercive style is one that demands immediate compliance. Basically, the Chief Executive Officer gives an order and immediate compliance with that order is expected immediately. The overall impact of this style is negative and should only be used in situations where it is needed. Guards controlling prisoners would be a good example. An authoritative style is not all that dissimilar to coercive but it takes a different tone. Rather than meaning "do what I say and do it now," it is more like "come with me" and portrays an aura of self-confidence, empathy and a catalyst for change. This sort of approach is called for when changes require a new vision and direction. As such, the overall impact on the climate of a business is mostly and usually positive with an authoritative style. An affiliative style is one based on the creation of harmony and the building of emotional bond. Even if there is work to do and it needs to be done at the end of the day, this is a positive approach across the board because the root message is that "people come first." Words that can be associated with this approach are empathy, building of relationships and communication. There is also the democratic style where opinions are garnered and listed to in a direct and meaningful way. This approach is also positive. The fifth style is also a bit negative in the grand scheme of things but is sometimes necessary. It is not unlike the coercive style in that the basic directive in question is "do as I do ... and do it now." There is a leading by example but the pressure brought to bear from this approach can be abrasive to come. Finally, there is the coaching style. This is the approach that develops people for the future. The phrase that is emblematic of this approach is "try this" and it centers on things like the development of others, empathy and self-awareness (Goleman, 2000).

There is actually a good source of leadership advice out there which is actually a fictional character. Alex Knapp of Forbes noted that there are five leadership lessons that one could learn from none other than James T. Kirk of Star Trek. Of course, those five lessons could absolutely be applied to the calculus and development of Chief Executive Officers. The first lesson would be to never stop learning. There should never be a point where someone thinks or feels that they have learned everything that they need to know because there is no chance of that ever being true. Second, it is important to have advisors and confidants that have different worldviews. Having a bunch of "yes men" (or women) that are completely simpatico with what a leader feel might be easier in terms of interacting with them and debating them. However, this does not make for the best decisions because it is basically a setup for groupthink and that is not good. The third skill that Kirk had which CEO's should use is to be part of the "away team." In short, this means not protecting and shielding one's self in an ivory tower and actually getting out there with the workers and in the field to see what is really going on. The Forbes article uses the example of a general manager of a defunct pizza chain actually spending time making pizzas everyday rather than just having someone else do it, which was certainly within his rights to do. This sort of behavior builds and keeps a connection with the workers as they typically realize that the leader in question does not feel it is "beneath" him or her to work in the proverbial trenches and go through the same toils and travails as the workers. The third lesson that CEO's should take from Kirk is to play poker and not chess. Life is all about probabilities and that is really what poker is as compared to chess. With chess, one player may not know what the other is going to do next (at least for certain) but the proverbial playing field and the pieces are all seen. This is not remotely the case in poker and wins can be established even without the winning cards. Finally, there is the metaphor of blowing up the Enterprise. This basically means that reinventing the wheel and taking a new path is not always the easiest thing to do but it is sometimes required if the existing business model is not working. For example, the author of this report would point to the CEO of Blockbuster Video should have realized that the days of renting DVD's and Blu-Ray's was numbered but they did not act fast enough and now Blockbuster, at least in terms of brick and mortar stores, is no more (Knapp, 2012). Such happenstances have occurred with CEO's like Steve Jobs of Apple Corporation acclaim and most people would never dare question his acumen (Isaacson, 2012).

Effective Communication Skills

When it comes to communication skills, the Mind Tools collective has a nice tool to remember the most important parts of communication. They refer to the matter as the seven C's. Those C's are clear, concise, concrete, correct, coherent, complete and courteous. In other words, the communication one renders to others must be clear, it must retain some modicum of brevity, it must be presented in a clear and understandable way, the information communicated must be correct, the message itself must be understandable, the message must not leave out any important details and the message should be communicated in a polite and sincere way. Getting organizational buy-in and compliance when it comes to communication includes two major things. What the change or message happens to be and that the managers (at all levels) are committed to the change. In other words, the people of an organization have to know what is changing, why it is changing, that the management of the firm is firmly behind the change and that the change, as a result, will be enforced and pushed along. Missing out on any of those steps leads to people dragging their feet or otherwise not accepting the message. Whether one is talking about a general announcement or new policy or whether is one is talking about a major and systemic change, having all of these proverbial ducks in a row is very important (Mind Tools, 2016).

Ethics in Business

When it comes to ethics and its role in business, the linkage between the two cannot be broken and no one should try to do so. The problem for many is defining what is ethical and what is not. In a new era that has become defined by corporate social responsibility and other buzzword times, it can sometimes be difficult to define what is ethical. Of course, the root mission of any business is to make a profit. However, the word "profit" has become a dirty word to many people and some assert that there is a point where "enough is enough" when it comes to how much money one can make. However, there is not really a need to delve into that when it comes to front-line employees as the overall debate and definition of ethics for a given firm should be done by the upper-level managers and then portrayed and explained to the workers of that firm. Those workers that take issue with the ethical lens that a company uses can find employment elsewhere, as is their right (Karnani, 2016).

However, there are some guiding directives and best practices that many to most sources point to and it would be wise for businesses to stay in those proverbial lanes. Indeed, there are many that say that staying in those proverbial lanes are necessary to preserve or even boost one's bottom line on financial statements. While there are efforts and initiatives that have happened before, there has been a wide consensus that the way this is currently being done needs to change. This is based on the assertion that effective management of business ethics requires an organization-wide strategy that is "in tune with wider societal values and the public's new expectations of business" (Chartered Accountants, 2016).

The reasons for this change being necessary are numerous. There are also several factors involved when it comes to what is necessary and why. For example, the size of a business has a lot to do with what is necessary from an ethical standpoint. Globalization of all of these businesses has made it a fact that societies are now interdependent and equally accountable for what is and is not allowed to occur in the current business climate. There are 80,000 transnational enterprises and ten times that when it comes to subsidiaries and smaller to medium size businesses. All of those businesses bouncing off of and working with each other requires some sort of unified standard about how business should be done and why. There has been a major paradigm shift in the form of the internet becoming the new "public square" when it comes to how businesses are held accountable for their actions or inactions. As stated by Chartered Accountants, "there is a new global antenna tuned to the perceived negative impacts of business on nation states." What this basically means is that the massive spread of internet technology has led to a grassroots movement of consumers, employees and activists. For example, Qantas Airlines had a little blip when its planes had to be temporarily grounded due to safety concerns. About that same time, they issued a Twitter blast that asked people what their dream luxury inflight experience would happen to be. They received a barrage of sixteen thousand tweets in response that range from sarcastic to critical and it ended up being a public relations disaster for the airline as there was some clear derision and dissatisfaction with the airline at that time. Clearly, Qantas needed to make sure that their employees were doing the right and ethical thing when it comes to serving clients and the planes themselves as the planes being in disrepair could absolutely lead to a plane crash or at least a scare (Chartered Accountants, 2016).

Another factor and circumstance that plays a role was the recent global financial crisis. Indeed, it was the worst financial state of the world for the better part of a century. This happenstance led to a very critical eye being extended towards how much executives are paid in general, how much they are paid in relation to the lower-level staff and overall business practices that some would term as "amoral" and otherwise ethically dubious. What emerged from the global financial crisis in a digital world was a clarion call for a better commitment from all businesses towards institutional integrity and better ethical practices overall. Indeed, such standards and practices start at the top and work their way down. If the executives at the top are doing wrong and/or they are saying one thing to the employees and doing something else, the overall ethical climate of the business will surely be poor (Chartered Accountants, 2016).

While that may seem easy enough, throwing the factor of culture into the mix makes things even more complicated. As noted before, businesses are increasingly global and this means that cultures and societies are interacting and reacting to each other much more than was possible just ten to twenty years ago. However, culture also refers to the culture within a firm. One had better believe that executives are fully aware of the implications of their actions. A survey was done by Ernst and Young in 2010 and it was found that three fourths of all executives were quite worried about personal liability for ethical lapses in their companies. This is not a fear that is beyond the pale given the passage and enforcement of laws like the United Kingdom Bribery Act of 2010. In a rather sharp extension of agent law, that law from the UK made it a crime for the executives if it was found that agents of the executive and the company were engaging in bribery on their behalf. Even with the increased focus on catching people engaging in improper business behaviors, there are many nations that are doing quite well. Australia, for example, is doing quite well. Conversely, many countries in Asia including India, Thailand, Indonesia and Vietnam are quite bad when it comes to business ethics. Australia is obviously doing a good job in terms of their people on the right ethical plane whereas the people in India, Thailand et al. are not doing that nearly as well. The government and managers of those countries need to start and enforce a new standard or those scores will not change (Chartered Accountants, 2016).

In the modern business ethics construct and paradigm, the unethical and/or illegal acts that seem to be occurring the most include a rather tawdry list. These items include insider trading, illegal political contributions, environmental violations, health/safety violations, improper contracts, contract violations, improper use of competitor information, anti-competitive practices, sexual harassment issues, substance abuse and general stealing. To help combat and curtail these ethical and/or legal lapses, a number of standards and frameworks have advised to help define what is allowable, what is not and what can be done to address the latter. These standards include the ISO 1400, the SA 8100, the AA1000, the UN Guiding Principles on Business and Human Rights (2012), the United Nations Convention against Corruption (UNCAC), the OECD Guidelines on Multinational Enterprises, the ILO Core Conventions, the International Covenant on Economic, Social and Cultural Rights (ICESR), the Equator Principles, the Global Reporting Initiative, the World Business Council of Sustainable Development, the Ethical Trading Initiative, the European Union (EU) Strategy on Corporate Social Responsibility, and the Transparency International Global Index on Corruption. Depending on the nation and/or the type of business involved, any number of these can be used to parlay the proper ethical and related standards to employees. All policies and rules for a company should be based on compliance with the local laws as well as general ethical standards that often go beyond (if not well beyond) what is minimally required by the law. For example, giving a refund for a product that was clearly broken by the customer is not always required but some businesses do it anyway (Chartered Accountants, 2016).

Getting employees to uphold an ethical standard is one thing but getting an ethical standard in place to begin with is often a challenge. Indeed, roughly half of all C-Level executives feel that there is a disconnect between the board of directors of their firm and general ethical practices. This is rather disturbing and begs the question as to why this disconnect exists. Whether it be an excessive focus on profit and cutting costs at the expense of safety, customer satisfaction and so forth, there does indeed need to be a level of trust and understanding about what a business stands for from an ethical and values standpoint and how that could and should be translated to the employees in the form of announcements, corporate policies and so forth. This point is driven home even further when looking at the financial scandals that have all happened in just the last five to ten years. UBS was fined 29.7 pounds for improper system failures and controls, HSBC was fined $1.92 billion USD to settle charges related to sending money to prohibited nations, Barclays was fined 290 million pounds for toying with interest rates in an artificial way, Wal-Mart was involved in a bribery scandal in Mexico and the last goes on (Chartered Accountants, 2016).

A survey of financial services employees finds that the pressure to break the rules comes straight from the top and this happens entirely too often. Indeed, nearly a third of respondants to a survey in 2012 found that they were pressured to compromise ethical standards and/or break the law. About a fourth of professionals felt or believed that they would have to engage in law-breaking or ethical lapses to be successful in one's job. Nearly four in ten felt that their competitors were likely engaging in illegal behaviors themselves based on what they had heard or knew to be true. About a fourth said that they observed or had firsthand knowledge of wrongdoing in their own personal workplace. Two in ten were generally unsure how their employer would handle an incident of wrongdoing if and when it was to come up. Finally, more than two out of ten females said that they would be retaliated against if they were to blow the whistle on bad behavior. Even so, the news is not all bad. Six to seven out of ten people feel that it is their own personal responsibility to make society a better place from an ethical standpoint rather than leaving that duty to future generations of workers and leaders. Businesses really need to latch onto that. Employees or executives of any level that engage in unethical or illegal behavior need to be corrected or expunged based on the severity of the offense. Regardless of all that, a business will not be the ethical leader it could or should be if the leaders and executives of the business are not leading the way when it comes to being ethical (Chartered Accountants, 2016).

Conclusion

While it is best to keep things simple to understand and simple to comprehend, not everything in business is neat and easy to absorb. Indeed, ethics, skills and so forth when it comes to business can be hard to define and figure out sometimes. Sure, most situations are fairly straightforward but there are certainly areas of gray. Whether it be separating personal and business ethics, using the right leadership approach for the situation, the proper way to communicate with employees and others and so forth are all skills that are not easy to master and wield with precision without practice, observation and a lot of trial and error. Further, no single solution works in all situations. It is all about adapting to the situation and making the right call based on the circumstances. Further, some decisions will be concurrently right and unpopular.