Qualities of a great CEO

How did today's most famous corporate management stars reach the top of their careers?

A closer look at the career histories of top CEOs reveals that certain skills and work styles play a critical role in their extraordinary success. Each of them leads a gigantic enterprise, and the leadership displayed by each has stood the test of time.

The best CEOs start their work by looking at the market and injecting a new idea into the business that any problem is solved by first analyzing the external environment of the company and then analyzing the internal environment of the company, which is called " outside-in" approach. Many great CEOs have unparalleled leadership talents, in other words, they love their jobs and their companies immensely. The most accomplished CEOs understand the importance of corporate culture and the difficulty of making substantial changes to it.

Gerstner: Listening to customers

The genius Thomas Watson, founder of IBM, once admonished his colleagues to "aim for big things." When he spoke of a "great cause", he must not have imagined that it would turn out to be a huge loss in the end. But that's exactly what happened to corporate giant IBM in the early 1990s. Not only was the computer giant mired in deficits, it was getting worse because of its poor management. The IBM board of directors desperately needed a new corporate leader, and in the end, Louis V. Gerstner, then CEO of the giant food company RJR Nabisco, was selected and appointed.

As soon as the appointment was announced, there was a wave of suspicion and anxiety. Opponents have criticized Gerstner's lack of experience managing tech companies. In this regard, Gerstner showed great courage and patience. For example, when asked about his vision for IBM's future, he replied, "As things stand now, IBM doesn't have a vision at all."

Prior to this, many within the company believed that, If the company were divided into several smaller businesses, each would have a better chance of surviving. But Gerstner's first big decision was not to break up IBM. He made the decision after flying tens of thousands of miles in his first month on the job, meeting with clients and managers around the world. By the end of the trip, he had come to the conclusion that the recovery IBM was looking for would not depend solely on the production of hardware and software, but on the company's ability to provide a diverse range of computer products and services. If IBM can do this, clients will rely entirely on the company for all computer-related problems, not just for equipment parts or temporary IT inspection services.

Gerstner's first month of work experience provides other managers with valuable experience on how to deal with critical situations:

1. Make full use of the full capabilities of the enterprise. Gerstner knew he needed to use all of IBM's power to transform the company, so he didn't let it fall apart. This experience also applies to mid-sized companies. As you redefine your corporate strategy or implement major changes, be sure to fully mobilize every part of your business. Never let any department, unit or individual stay out of the way.

2. Let customers point out the weaknesses of the company. Gerstner knew things were bad for the business. When he talks to clients around the world, he admits this painful truth and asks them to point out what is wrong with the business. In this regard, your managers and employees may know the business well, but your customers can provide you with a fresh perspective.

But Gerstner knew that maintaining the integrity of a business was not enough. He knew that in order to turn the company from crisis to safety, it was necessary to reverse the mentality and corporate culture of its employees. "IBM has had a long history of smooth sailing. When corporate people are looking for the next challenge, they find that it is not from the market, but from within the company. So the focus of the company has shifted from customers to a series of internal competitions."

Guo Shiner made a bold decision, determined to reverse IBM's old corporate culture and "cultivate the three key qualities of enterprise focus on the market, speed and teamwork spirit". He felt that no amount of publicity could stress this point too much. Shifting the company's focus from internal friction to marketing and customer service is "the top priority in changing IBM."

Reflecting on the past, Gerstner said the work of changing the company's culture was "frustrating." When asked what advice he had for other managers looking to change their corporate culture, he replied: "Be patient, the job takes time. The process is often slower and longer than you might expect." Gerstner 's words and deeds once again provide a rough blueprint for those companies facing changing corporate culture:

1. Let the company go outside to find answers. Once business leaders realize that their business is in crisis, they are likely to freeze their own learning mechanisms. Therefore, they must emphasize the importance of focusing on customers and the market, and lead by example, learn from competitors, and humbly ask important customers for advice.

2. Pay attention to three key factors: market issues, speed and team spirit. Gerstner reshaped IBM on these principles. These timeless ideas apply equally to small shops and large businesses.

3. Understand the long-term nature of the task of changing corporate culture. This is especially true in giant corporations like IBM, but also in small businesses. Patience is required when trying major changes.

4. Don't expect managers and employees to actively adapt to changes in strategy. Any substantial strategic change is likely to be resisted by people accustomed to the old ways. Therefore, leaders should work on a two-pronged approach to corporate culture and corporate strategy to achieve transformation.

Gerstner turned IBM from a loss of $16 billion to a profit of $5 billion in five years in the most astonishing corporate recovery in history. Gerstner's great success didn't depend solely on selling more computers, but by transforming an old hardware manufacturer into a brand new business, one that provided customers with solutions to problems rather than simply selling hardware. enterprise.

Now, please self-assess your qualities as a CEO:

Are you solving customer problems or sticking to a product-centric mindset? If your choice is the latter, you and your team still have some issues to work out. Do you often receive clients in the office and communicate with them face to face? If not, how much time do you and other senior managers spend with clients? Does your business profit from the services of an existing product? How will this business area expand?

Gates: Unleash the talent of employees

Microsoft is one of the largest and most powerful companies in the world. Even in the economic and technological downturn since 2000, Microsoft has outperformed most tech companies, recording 12% sales growth. Although the company has been involved in some legal disputes, Microsoft is still an example for many companies to follow. First of all, it is a "creative first" business. Bill Gates and other senior managers spend a lot of time trying to create an environment in the company where all employees can contribute to the company's knowledge base.

Of course, this is the verbal goal of many businesses. But Microsoft has done a better job than other companies to achieve this goal. Gates often promotes this corporate culture: not only encourages all employees to think, but also encourages them to share their ideas with colleagues and managers above and below the company. He uses the term "digital nervous system" to describe the sharing of information within a business. He believes that the role of digital information is the same as the meaning of the central nervous system to the human body. This digital nervous system includes not only macro issues like strategic planning, but also mundane but critical activity information like communicating with customers. The ultimate goal of building a digital nervous system is to create a faster, more decisive business. The stronger the ability of this kind of enterprise information integration, the easier it is for employees to access information, and the faster they can respond to market changes.

To create the ideal enterprise in Gates' mind, the following steps should be considered:

1. Digitize the most important information of the enterprise. It is only possible to build a digital nervous system by integrating the most important information in a digital format. Make sure that key sales reports, memos and proposals are available in the online repository. In addition, it must be readily available to all employees and managers who need this information.

2. Ensure that the corporate infrastructure and corporate culture encourage each employee to come up with ideas. Gates believes that Microsoft's corporate culture has played a huge role in promoting the formation of corporate Internet strategies. Companies that fail to truly encourage employees to contribute their ideas and creativity are likely to miss out on potentially valuable and important information.

Gates places great emphasis on pushing employees to think at a higher level. He argues that it is middle managers and employees who are most in need of accurate data because they are responsible for the most actual work. As a result, he pushed companies to abandon the habit of collecting information centrally and instead educate employees to understand, analyze, and act on information themselves. The following methods will help to facilitate the flow of information within the enterprise:

1. Encourage any employee or customer to contact you directly. In most businesses, no one actually dares to email the CEO directly. Gates leads by example, encouraging everyone to email him anytime. Not only did he want to hear the good news, he also demanded that the bad news be heard faster.

2. Aim for "pure digital transaction". Gates stressed that there are still plenty of inefficiencies in the operations of the business. This is mainly due to the low level of "purely digital transactions". Customers, suppliers and key parts of the business should be encouraged to work closely together to achieve the pure digitalization of transactions such as make-to-order.

3. Ensure that the enterprise can quickly retrieve the existing information. Gates calls it "the memory of the business." It is not only the employees of the enterprise who need to obtain important information, but also the external customers of the enterprise. In this way, the company's relationship managers and customers can consult the same documents and retrieve the information they need when discussing transaction accounts. There are several ways to improve your business memory:

1. Ensure that your customers and suppliers have the same access to information as your employees. This makes transactions easier. This approach requires a huge adjustment in mindset.

2. It is guaranteed to find any files and files within 60 seconds. Digitizing all of these transactions and operations is pointless if your business doesn't pass this test.

Now, please self-assess your qualities as a CEO:

Are there any employees in your organization who are solely responsible for entering information into the system? Do you encourage employees at all levels and positions to email anyone in the company? When was the last time you made an important decision based on the advice of rank-and-file employees outside the senior management team?

Kelleher: Using Cultural Assets

When Herb Kelleher became CEO of Southwest Airlines, the company had only 27 planes and a turnover of only $270 million. . By 2001, the business had grown to $5.7 billion. Although the energetic lawyer-turned-CEO stepped down in 2001, his shape and influence on the business continues to this day.

From fare structures to no-reserved seat policies, Southwest has challenged traditional business philosophy in virtually every area. But as the only major airline to have never had a loss-making year, it owes much of its success to its unique corporate culture. Employees are extremely loyal to the company, and they believe that although Southwest Airlines is a large company, the warm and intimate atmosphere of the company is more like a small family. Kelleher has always hated bureaucracy. "Southwest's corporate culture is probably its main competitive advantage," he said. "The intangible assets of the business are far more important than the tangible assets. That's because the gap in terms of tangible assets is fully bridged. You can buy planes, you can lease and sell tickets. Counters, but your employees have a ethos that no other business can replicate."

When fuel costs tripled and Southwest was in crisis, Kelleher asked each employee to save the business $5 per day. If they could do that, it would save the company $50 million a year.

In fact, employees responded positively to his call. A group of mechanics invents a more economical way to heat aircraft, employees from another department volunteer to do housekeeping in their own department, and so on. In just the first six weeks, Kelleher's hardworking employees saved the company more than $2 million. This example clearly demonstrates the enormous power of mutual trust between managers and employees.

Southwest Airlines also uses corporate culture as a standard when it comes to hiring personnel. Of the 90,000 people who apply for jobs each year, only 4% are hired. To ensure employees fit the business, Southwest Airlines must look for people who fit a corporate culture that combines positivity, affinity and a sense of humor. To this end, the company uses a personality test that evaluates candidates on positive emotions, optimism, decision-making skills, teamwork, communication skills, self-confidence, self-motivation, and more.

When your company is interviewing people for important positions, you may wish to adopt Kelleher's suggestion and use the following two methods:

1. Assess intangible assets. Kelleher knew that intangible assets were far more important than tangible assets. For example, attitude is difficult to assess, but it was a very important factor in creating the corporate culture of Southwest Airlines.

2. Establish your own employment standard system. Make a list of the traits that you and your business value most, and make sure candidates fit those traits before making a hiring decision.

Although Southwest Airlines is a large company, it maintains a small company spirit. While many businesses are pretentious, Kelleher actively encourages a lighthearted atmosphere, especially at work. He believes that CEOs should spend more time interacting with clients at home and abroad, while leaving other tasks for evenings and weekends. He cautioned employees not to focus only on statistics, but to focus on service. "We tell our employees, don't worry about profit, just serve customers. Profit is a by-product of service," he said.

He also explained that in a truly engaging environment, managers don't need to get too involved. of. "If you create an environment where people are genuinely involved, you don't have to supervise and control at all."

The company's corporate culture features:

1. Low wages for managers and high wages for employees. Without a fair and equitable compensation system, there would be no corporate culture like theirs, Kelleher said. He sets wages for employees above the industry average and allows all employees to participate in the company's generous profit-sharing program. But he pays managers 30 percent less than other airlines. Southwest Airlines has tried to close the income gap created by managers' stock pre-emption rights.

2. Limit the enterprise management structure to four levels. It's not enough to just hire the right people and let them share in the profits. To ensure the smooth execution of various decisions, the company's chairman insists that managers can be divided into at most four levels, from CEO to front-line administrators. The top performers are those who have the confidence to make their own decisions and who have a proactive attitude to work.

Now, please self-assess your qualities as a CEO:

Is there a high level of trust between staff and management in your organization? Are employees able to make independent decisions without the approval of their boss? Do the majority of employees share in the benefits of the business, financially or otherwise? Are your corporate recruiters based on attitude, or are they more based on hard conditions?

3. Sincere communication is more important than rational communication. Not only that, but the communication of goals, ideas, emotions, creativity and love is just as important as the communication of situations and numbers.

Excellent CEOs like Gerstner, Gates, and Kelleher, although from different backgrounds, are able to accurately grasp the needs of the future, create epoch-making products, workflows or solutions, implement the most outstanding creativity. They have made important contributions to the enrichment and expansion of management knowledge.

This text is adapted from the book What the Best CEOs Know by Jeffrey A. Krames with permission from publisher McGraw-Hill Publishing Company. Copyright 2003 by McGraw-Hill Publishing Company. Translated by Zhu Xiaofan.