CEOs: Do you really know how you’re being evaluated?
Uber’s scandals over the past year among the top echelons – along with those of other companies – points to a slew of failings at the CEO level. From allegations of sexual harassment and gender/racial bias to legal violations and general bad behavior, the company’s actions have revealed critical gaps in its leadership evaluation, whether that evaluation was self-imposed or external. If it isn’t already, this should a wakeup call for leaders and boards across companies everywhere.
Most businesses ultimately exist to create a profit, yes, but businesses are built on people. Leaders have a clear understanding of the financial metrics that they need to meet, often focusing on these as the primary indicator of the company’s health. But with a single mindedness on the numbers, you might not be giving enough thought to the other aspects of your performance that your stakeholders, board or advisory committee are taking into consideration. In an era of fraud, ‘bro culture’ and persistent gender or racial inequality, there are critical performance metrics beyond finances that must be measured if a company aims to succeed in the long run. And for a CEO to truly define what great leadership is.
So do you really know what aspects of your performance are being evaluated? It’s not uncommon for a CEO to feel blindsided when they are evaluated beyond the financial metrics. But beyond profitability, a critical role for the board of directors is also to determine the values to be promoted throughout the company, as well as act in the interest of the employees. Here are some of the other aspects of performance that a good board is – or should be – evaluating for:
• Developing Talent: Are the members of your executive team being developed? Are you seeing progress and growth in their roles? Are they being encouraged to coach and mentor their staff? As the leader of an organization, one of the most important mirrors to your company’s success is how the people under your leadership are developing. Communication is important, but so is listening. You need to be engaged enough to read people and gain their trust. If you have a good person in the right role, but they don’t seem to be thriving, take a deeper look at your own leadership to make sure you’re effectively communicating your own vision.
• People Management: Look at turnover rates, success of internal initiatives, employee involvement and other culture indicators. If there is a culture issue, employees are either leaving or they aren’t engaged. Culture starts with you at the top. If you identify an issue, it likely means you haven’t been making workplace culture a priority. Turnover and low productivity will cost you in the end, so make changes now to keep your organization running smoothly.
• Future Strategy: First question to ask: do you have one? As the senior leader in your organization, having a plan for the way forward, and communicating it effectively is your primary goal. Take a hard look at what you have in place, and whether your people know about it.
Without these performance metrics a CEO, and the board, are not doing their job with due diligence. And ironically, with an eye focused solely on the finances, profits will soon take a dive, as Uber learned, ending Q1 with a $700 million loss. And it doesn’t take a lot of evaluation to know that’s not a good thing.