CXO Archives - Brian L. Davis, Ph.D | Vistage Chair

Research backs claims that Vistage CEOs outperform their nonmember peers.

theleadershipcatalyst — Mon, 01 Nov 2010 00:59:55 +0000

In last week’s post, I featured a CNBC broadcast regarding Vistage Member CEOs forecasting short term growth for small companies over the next two quarters. In that report was a caveat that Vistage CEOs may not be a totally representative sample of Small Business CEOs, because independent research shows that they consistently outperfom peer nonmember companies. I asked Vistage International to share their evidence, and was impressed with the research they produced. As can be seen from the graphs below, a Vistage Sample of 1265 member companies was compared with a statistically matched sample of about a million D & B nonmember companies. Over the period 2006 though 2009, Vistage companies outperformed nonmember companies on CAGR by15 percentage points. Moreover, this trend was consistent across all major business segments, ranging from a 13.2 percentage point difference in the Transportation and Communication Sector, to a 25.7 percentage point difference in the Wholesale Trade sector. In other words, in one of the toughest economies in history, Vistage member companies averaged 5.8 % revenue growth, while nonmembers averaged a (9.2%) revenue decline. In future posts, we will explore the factors that contribute to that sizeable performance difference.

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CEOs, like HIPPOs, at times need to avoid trampling others.

theleadershipcatalyst — Sun, 08 Aug 2010 22:15:01 +0000

Walking into my client’s building, I noticed a large crew of maintenance workers feverishly manicuring the company grounds. When I asked the new CEO what had prompted such frenzied activity, he shook his head and said that earlier that morning, he had commented to the receptionist that he was having a hard time keeping up with his lawn, with all of the rain they had been having. His comment had been misunderstood by a bystander as criticism of how the grounds were being maintained, and reinforcements had been dispatched to manage the “grounds keeping crisis”. This was my first introduction to the “HIPPO” effect, which is an acronym for how the Highest Paid Person’s Opinion can ripple through an organization.

The effect is even greater when a CEO has strong views about an issue. For example, Steve Jobs pushed through the introduction of the new iPhone, even though problems about the antenna design had been known for months.

Suzanne Lucas (a.k.a. Evil HR Lady) suggests 5 tips for how employees can avoid being trampled by a HIPPO. I think they are pretty good, and I recommend that CEO’s not only read them, but distribute them and discuss them at a team meeting to assure their opinions are being constructively challenged.

CEOs, like HIPPOs, at times need to avoid trampling others.

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What can CEOs learn from a twenty-something college dropout?

theleadershipcatalyst — Thu, 29 Jul 2010 12:20:56 +0000

Zuckerberg

I often talk to fellow CEOs about their development, and who they would like to have in a CEO peer group with them. Like most of us, they want someone who has already been down the road that they are traveling, and can point out the opportunities and landmines they may encounter on their journey. They typically think of someone who is more experienced (and older) than themselves who can challenge them and hold them accountable.

However, Joe Frontiera wrote an article in this week’s Washington Post entitled “Facebook’s leadership: Dissecting Mark Zuckerberg “ that challenges this notion that lessons must be learned from someone more experienced. In this one page article, he identifies lessons that can be learned from this 26 year old’s brief tenure as the co-founder and CEO of face book. Given Facebook has been estimated to be worth as much as $35B, these are lessons worth heeding. The one page article is worth a 5 minute read to learn more about the lessons highlighted below.

LEADERSHIP CATALYST TIPS

The key lessons learned in observing a 26 year old, highlighted by Frontiera are:

“Believe in the vision.”
“Execution can trump innovation.”
“Mistakes become mistakes when you let them.”
“The Devil is in the details.”
“Ownership matters.”

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