CEO Mistakes: The 7 Biggest Leadership Mistakes CEOs Should Avoid
Even the most successful CEOs stumble from time to time. That’s why it’s so important to be mindful of common CEO mistakes that can be avoided with a little vision, planning, empathy, and self-awareness.
If you can stay clear of these seven CEO mistakes before they trip you up, your growth trajectory and your path to BIG will be that much smoother.
1. Not thinking BIG.
The pressures that come with leadership cause many mediocre CEOs to play it safe, especially when the going is good. After all, if your company is staying in the black every year, why gamble on a new product or service that might not fly, or make a play for a new market that might be too competitive?
Because on the other side of the street, there’s another CEO who understands that stagnant businesses die, even if they’re currently successful. Complacency and setting low bars are CEO mistakes that, at best, lead to incremental improvements, and at worst, create huge openings for a competitor to drive right through.
“Great CEOs are bold,” says McKinsey & Company Senior Partner Vik Malhotra. “You can be bold regardless of context. Or you can be bold within that context. If you’re not bold in that first year, you’re not going to move the needle. That is the crux that’ll actually let you conquer any context and any situation around failing. That is your one safeguard against failure.”
2. Not clarifying your vision.
“What do you want?”
That’s the first question we challenge CEO coaching clients to answer. CEOs who don’t have a clear vision will always struggle to make effective annual plans and rally their team around achieving an inspiring common goal. That lack of clarity also tends to create ineffective communication throughout the company which leads to wasted effort, missed targets, and a lack of accountability.
Any time you feel like you’ve lost sight of your goals, go back to your Crystal Ball. Imagine you’re a year into the future, celebrating with your whole company, because you accomplished … What? If you can’t see that BIG goal you’re working towards, then your company will keep standing still.
3. Not aligning people and purpose.
Many CEO mistakes revolve around a relentless pursuit of profit. If your company doesn’t have a higher purpose that animates what you do and how you do it, customers will spend their money elsewhere and top talent will head for the doors.
- What are my company’s core values?
- What kind of a culture do I want?
- What are we giving back to our community, our customers, and our employees?
- How are we innovating to decrease any negative impacts of our business and increase our positive impacts?
Answering these kinds of questions isn’t just good for your image, it’s good for your business. When you know what kind of company you want to be, you’ll be able to identify the people who are going to help you realize that purpose and make those meaningful connections to the wider world that will help you get to BIG.
4. Not maintaining a consistent meeting rhythm.
An effective meeting rhythm keeps every level of an organization focused on progress toward key goals. Our most successful CEO coaching clients use this cadence as the foundation for their company’s communication:
Annual Planning Session: The State of the Company Address. Review the previous year’s progress, set an inspiring Huge Outrageous Target (HOT) for the year ahead, and work with your team on the steps that will be necessary to achieve it.
Quarterly Alignment Session: Meet with your leadership team to analyze what went right this quarter, what went wrong, what challenges need to be addressed, and what goals should be set to keep the company on track for its annual HOT.
Monthly All-Hands Meeting: Your leadership team updates its staff on progress towards key goals, shares plans for the month ahead, and publicly recognizes team members who have gone above and beyond.
Townhall Meeting: As needed, the CEO addresses the entire company and opens up the floor to feedback on what the company is doing right and what the company could be doing better.
Weekly Leadership Meeting: The CEO reviews progress towards quarterly targets with department leaders.
Weekly One-on-One: Supervisors meet with each of their direct reports to gain feedback on how they feel about the company, review the employee’s performance and development, and discuss career development goals.
Daily Huddle: Grab 5-10 minutes with each management team to touch base and set the agenda for the day ahead. Don’t sit down if you can avoid it — these should be quick and to the point.
5. Not effectively executing your plan.
Mark Moses often tells CEOs, “If you can’t define it, you can’t measure it. If you can’t measure it, you can’t manage it.” It’s in this cascade of CEO mistakes that good plans often fall victim to poor execution.
Rather than defining, measuring, and managing the activities that will lead to sustainable growth, some CEOs content themselves with good news from last month. But lagging indicators only tell you where your company was — they’re no guarantee of where you’re company is going to be next month.
Work backward from your annual HOT to separate leading, growth-positive KPIs from lagging indicators. Slap those leading KPIs on a BIG dashboard that the whole company can see. Establish who is responsible for accomplishing what, by when. And use your meeting rhythm to course correct when your numbers aren’t trending in the right direction.
6. Not embracing diverse voices.
CEOs who surround themselves with people who look, act, and think just like they do are walling in themselves and their companies. If you aren’t giving yourself the benefit of diverse perspectives, then who is going to identify blind spots, approach problems from unique angles, or dream up unorthodox ways to innovate and grow?
Assembling a diverse, multigenerational workforce is just step one. The people you hire have to feel like they’re part of a corporate culture that values learning and continuous improvement. They can’t worry that the CEO will dangle a sword over their heads every time they make a mistake: they need to feel supported, encouraged, and cared for beyond their work performance. And when they do raise their voices, they expect to be heard, and they expect the CEO to put the company’s values into action decisively.
7. Not having a trusted sounding board.
CEOs often feel like they’re carrying the weight of their whole company on their shoulders. The burden of bearing that responsibility alone can lead to just as many CEO mistakes as poor planning or incompetency.
It’s also one of the easiest CEO mistakes to correct.
“Being the boss can be isolating, says Meghan Watkins, a coach at CEO Coaching International. “You have to make unpopular decisions and let go of good people who are not growing with the company for whatever reason. You have to resist the urge to share everything with your team. The loneliness becomes more manageable if you have a coach you trust to share your worries, frustrations, and challenges.”
When you work with a CEO coach, you have a trusted pro you can turn to when you’re having problems with your board, or when you’re contemplating a C-suite change that might not be popular, even if it’s necessary. You also have another set of experienced eyes that can alert you to potential CEO mistakes and help you avoid them.
Not every CEO is strong enough or humble enough to admit when they need someone to point out their blind spots, challenge their thinking, and hold them accountable. Those who do have that courage will be making an investment in themselves and their companies that can minimize future CEO mistakes and maximize velocity toward Making BIG Happen.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 67.8% during their time as a client, nearly four times the U.S. average and a revenue CAGR of 25.5%, more than twice the U.S. average.
Learn more about executive coaching | Meet our world-class coaches