Surprising Non-Performance by Executives

Posted on September 15, 2007

You should be able to rely on your top team members, but how do you know that the executives you’ve hired really are competent? Learn how to prevent last-minute surprises, and what could happen if you don’t.

The insomnia from the problem we’ll be discussing always comes too late to stop the short term pain. But the lesson to be learned is invaluable for prevention in the future, and if you’re lucky, you’ll see the light from the insomnia of others.

Most of the CEOs in my circle tell me it pops up about a month before the board meeting when you’ll be informing the board about the impending new launch, or about the big initiative that’s about to be announced to the marketplace. It’s the same one you got approval for nine months ago, got the funding for, and for which you laid your best plans.

The last-minute surprise

Each of your VPs, all well-paid and apparently well-qualified when you hired them, trundled off to do their part. Each month, you checked in with them, asking key questions and hearing back that everything was fine.

Here and there you asked deeper questions, and the indignant VP gave you more information, but made it clear that he was a professional with dozens of years of experience. You got the message: Leave him or her alone and “do your CEO thing.”

And so you did. But here you are, 37 days before the big launch, and a week before the board meeting, and now it most certainly is CEO business to prove to the board that all is well, and to detail the big launch. That $250K VP, full of confidence when you hired him and when he began the project, now reports that there have been unexpected difficulties. You dig into the past six to nine months activities and see that he really barely got off the starting blocks, and should have changed tactics six months ago to properly hit the deadline.

The insomnia is partly from trying to figure out how to save the project entirely (even if it would be a few months late), partly from trying to figure out how to tell the board the bad news, and partly about figuring out how this happened and how you didn’t see it coming.
I’m going to focus on how to see it coming, and what to do about it next time. The damage control work is going to be ugly no matter what you do, and are too situational to discuss here.

The case for micro-managing

The overall theme you’ll hear from me with this case of insomnia is to hire well-qualified executives, then micro-manage them until they’ve proven to you that they are capable of delivering.

I know, micromanaging is supposed to be a no-no. And it is. Any CEO that has to micromanage his subordinates to get the results he or she needs is not doing a good job. But how do you know that the team you’ve hired really is competent? The answer is that you can’t know they are competent until you’ve seen them at work, in your organization, producing results.

In an ideal world, you hire your executives way in advance of when you really need them to tackle the big, company-building kind of work. That way you are absolutely sure of the team, and only have to worry about the marketplace and the competition. But too often, you’re building your team just in time, or you’re the new one – a new CEO brought in to fix problems or get the company to the next level – and you don’t know who you’ve got on the team, either.

So stay close to the work. It will take extra time and patience on your part. But have a high level of skepticism about what you are told. Do not trust everything you are told. Trust is earned, even when you hire seasoned people at high pay rates. Spend time debriefing your team about critical meetings, review proposals and correspondence, and dig into details of how resources are being allocated and spent. Glance over the third-party test results every now and then. Show up at a few meetings and just listen.

I’m not saying to take over their job, or to do their job for them. Nor am I saying to interfere if their decisions are reasonable and prudent. But keep asking yourself if this project is reasonably on track based on objective data. If so, just keep watching and observing. If not, be blunt and straight with the executive about your concerns.

Every time I’ve directly and immediately addressed performance problems with good executives, they were adult about it, truly wanted to improve performance, and were interested in my opinions and ideas about improvement. Every time I’ve confronted bad executives, or had clients do so, their response was bad attitude, excuses, blaming others, and push back. And those bad reactions are a sign that you have the wrong executive on your staff.

If you as the CEO don’t have the technical expertise to know that the executive is truly on target, hire a consultant or outside firm to do so for you, and have them report directly to you.

This one insomnia-causing issue has, among CEOs I know, cost millions upon millions of lost venture money, massive losses in executive bonuses, layoffs, year-plus delays, extra unexpected rounds of new fundraising, and huge lost opportunities. Make executives prove themselves before trusting them, and you won’t lose sleep over this one.

Takeaways:

• Not staying on top of your team can cost a lot of money.
• It’s OK to micromanage new executives until they prove worthy of your trust.
• Good executives won’t make excuses when addressed with performance problems. They’ll want to do better.