CEO Excellence: Building Trust

In CEO Excellence, the authors Dewar, Keller and Malhorta, who are senior partners at McKinsey & Company, tackle a complicated mandate in a thorough way. We’d like to discuss some aspects of their project here, adding our own insights as well.

The book came into being because there were few resources about what a CEO actually does. Accordingly, after interviewing a select group of CEOs, the authors developed six mindsets to address this. Here’s the list from the Table of Contents, which is helpful and self-explanatory:

1. Direction Setting Mindset: Be Bold
2. Organization Alignment Mindset: Treat the Soft Stuff as the Hard Stuff
3. Mobilizing Leaders Mindset: Solve for the Team’s Psychology
4. Board Engagement Mindset: Help Directors Help the Business
5. Stakeholder Connection Mindset: Start with Why
6. Personal Effectiveness Mindset: Do What Only You Can Do

The best take-aways for us at The HuPerson Project particularly come from the examples used by the CEOs to illustrate their points. In a subheading under Stakeholder Connection called “Moments of Truth Practice,” we learn that Eaton’s CEO Sandy Cutler refused to cut staff during a recession. His reasoning was that the skills of people across the company would be needed after the pandemic. Instead, he asked for voluntary layoffs and for the leadership team to let go of all their incentives and to cut their base salaries. Despite the impressive company response, he received a lot of criticism from investors and from Wall Street, who wanted to see layoffs of 30,000-40,000 people. His response: “We’re not doing that. We actually think that’s old thinking. The new thinking is about preserving resources and making your expenses more variable.” This is an example of something called denying the premise. The premise here is to follow the bottom line at all costs. By denying that, something new can emerge and the CEO can pivot according to his or her intention.

We see that a crisis can lead us (force us) to re-evaluate our approach. One take-away from this example is that if as CEOs we prove ourselves trustworthy, we will be far more likely to retain our employees. How can you foster trust in your company?

For more related information, please check out our podcast Podcast Season 2 Episode 4: False Dilemmas.