What Effective CEOs Have Yet to Learn

I started my journey with Peter Drucker over thirty years ago when I was emerging as a newly
minted Ph.D. My research at that time was to study Drucker’s works over the twenty years that had
elapsed since he proclaimed in his 1954 publication, The Practice of Management, that his was not
a theory of management, but a philosophy. By applying the seven criteria of a philosophy as
established by Cardinal Newman,1 Drucker’s assertion of a philosophy of management in 1954 held
up two decades later. And thus I successfully defended my belief that Drucker was not just a
management theorist, but a philosopher.

Fast forward to 2004, some thirty years after I affirmed Drucker was a philosopher, and he goes and
gets practical on me. Of course, a man in his nineties has every right to do and be whatever he wants,
especially when he continues to be “the trumpet that sounds the clear sound” (his description of an
executive’s first task). In the June 2004 issue of Harvard Business Review, Drucker’s article on
“What Makes an Effective Executive” describes eight executive practices within three broad
categories:

A. Gathering Knowledge
They asked, “What needs to be done?”
They asked, “What is right for the enterprise?”
B. Converting Knowledge into Effective Decisions
They developed action plans.
They took responsibility for decisions.
They took responsibility for communicating.
They were focused on opportunities rather than problems.
C. Ensuring the Whole Organization felt Responsible and Accountable
They ran productive meetings.
They thought and said “we” rather than “I.”

As I read through this list, my thoughts immediately went to my work with the executives who have
participated in Columbia Business School’s Executive Education programs. I have taught and
provided feedback to hundreds of these executives over the last eight years in my role as Academic
Director and faculty in our programs. We attract a very diverse and talented group of executives
from around the world, who are certainly representative of today’s effective executives. But most of
the business world acknowledges that there is an undeniable achievement in becoming a CEO. So as
a starting point to delving further into what makes successful executives, I retrieved and reviewed
the 360 feedback on the CEOs that have participated in our four week Columbia Senior Executive
Program.

Each CEO contributed their own self-perceptions and also received feedback from three groups-- the
person to whom the CEOs report, their peers, and their direct reports. These CEOs were rated
highest in the following practices:

1
John Henry Newman in his An Essay on the Development of Christian Doctrine (1845) presents a workable description
of how an idea develops through historical circumstance to a philosophy. His seven criteria are: Preservation of Type;
Continuity of Principles, Power of Assimilation; Logical Sequence; Anticipation of its Future; Conservative Action upon
its Past; and Chronic Vigor.

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Columbia Business School Executive Education
What Effective CEOs Have Yet to Learn (continued)

Behaves consistently with own words and standards.

Demonstrates a strong personal commitment to high standards of excellence.
Shows enthusiasm for the work we do.
Demonstrates perseverance in achieving goals.
Makes the same sacrifices that he/she asks other to make.
Is accessible and approachable to talking about issues or concerns.

These six practices were rated highest by at least two of the three different feedback groups. In
addition, two of these groups reported at least one practice that the other groups did not recognize in
their CEO.

The Person to whom the CEOs report also noted:

Effectively use his/her network of relationships inside the organization
Demonstrates calm and stamina under stressful circumstances
Direct reports noted:
Demonstrates respect for others
The Peers of the CEOs did not list any additional practices than the other groups.

Finally, the CEOs rated themselves highest in “Displays confidence when confronting challenges,”
but none of the other responding groups listed that as a highly rated practice. In this case, confidence
is a felt strength of CEOs, but not necessarily clearly visible by others.

The following table shows the comparison of our findings with those of Drucker.

Drucker’s Practices of Effective Executives Columbia’s Practices of Effective CEOs

A. Gathering Knowledge
They asked, “What needs to be done?”
They asked, “What is right for the enterprise?”
B. Converting Knowledge into Effective Decisions
They developed action plans.
They took responsibility for decisions.
They took responsibility for communicating.
They were focused on opportunities rather than problems.
C. Ensuring the Whole Organization felt Responsible and Accountable
They ran productive meetings.
They thought and said “we” rather than “I.”
Shows enthusiasm for the work we do
Demonstrates s strong personal commitment to high
standards of excellence
Demonstrates perseverance in achieving goals
Behaves consistently with own words and standards
Is accessible and approachable for talking about
issues or concerns
Demonstrates calm and stamina under stressful
circumstances
Effectively uses his/her network of relationships
inside the organization
Demonstrates respect for others

The Drucker and Columbia data tell us what can make executives effective, but isn’t there a flip side
to that coin? In other words, what are the practices that effective executives could focus on or further
enhance to increase their effectiveness? Here is what we have determined are the practices where
CEOs were rated lowest based on the feedback survey:

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Columbia Business School Executive Education
What Effective CEOs Have Yet to Learn (continued)

Facilitates innovation by providing time and opportunity for reflection and brainstorming.
Effectively influences people who resist change.
Effectively creates dissatisfaction with the status quo in order to motivate change efforts.
Effectively delegates appropriate decision making authority to others.
Develop leadership skills of others.
Is willing to admit mistakes and change his/her mind.

The first four practices were mentioned by two or more of the reporting groups as well as the CEOs
themselves. The last two practices (Develop leadership skills of others; Is willing to admit mistakes
and change his/her mind) were not seen by the CEOs themselves as a weakness, but two or more of
the other survey groups agreed on low ratings in these practices for their CEOs.

Is there something we can learn from these lowest rated practices of our CEOs that Drucker doesn’t
tell us?

Facilitates innovation by providing time and opportunity for reflection and brainstorming.
First, if executives are to be effective leaders they have to be effective learners. Our work with
executives and their organizational learning reinforces that they need to deliberately take the time to
Reflect and Conclude to accomplish a complete Learning Cycle.2 The culture of business forces
executives to Plan and Act as a daily diet which limits their “cultivation of insight and facilitation of
innovation.” Before we begin our executive programs, we require all of our executives to assess their
learning style and understand how they must use the entire Learning Cycle to maximize their
learning and support the learning of their organizations.

Effectively influences people who resist change.

Effectively creates dissatisfaction with the status quo in order to motivate change efforts.
It has been observed that leadership is by definition the management of change. If that is true,
leaders need to be more cognizant of the importance of facilitating and managing the continuous
change they are confronted within and outside their organizations. It is counterintuitive to “create
dissatisfaction with the status quo,” but unless people are dissatisfied with their current state there is
little motivation for them to change. Certainly, providing a vision for the future and a path to get
there are critical elements to successful change, but at Columbia we emphasize that a leader needs to
continually challenge the status quo or else risk missing the inevitable point of inflection in the life
cycle of an organization.

Effectively delegates appropriate decision-making authority to others.

Develops leadership skills of others.
CEOs more than any other group of executives have to build a leadership team or face their eventual
extinction (Darwin was my guru as an undergraduate biology major before Drucker took over as the
philosopher king in my graduate studies). Effective executives need to “develop the skills of others”
as much as their own. There is no substitute for using on-the-job training to accomplish this goal,
2
Peter Honey and Alan Mumford1982) built a typology of Learning Styles around the learning cycle: Reflect –learn by
observing and thinking about what happened; Conclude –understand the theory behind the action; Plan –put the learning
in to practice in the real world; Act –learn by doing.

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Columbia Business School Executive Education
What Effective CEOs Have Yet to Learn (continued)

and that is why the practice of “effectively delegating appropriate decision-making authority to
others” is key. This does not come naturally -- delegating does not remove ultimate responsibility.
Nonetheless, we emphasize with our CEOs and other executives that Do It All is a mantra that fits
nicely on a gravestone, but in reality it seriously hinders the development of the next generation of
leadership for the organization and represents a form of failure.

Is willing to admit mistakes and change his/her mind.

Finally, we emphasize that executives need to be “willing to admit mistakes and change his/her
mind” if they hope to increase their effectiveness. Why? Admitting a mistake is a confirmation of
one’s learning. Yes, executives do learn from their mistakes and can teach others from that
experience. The worst thing is to not learn–absent the learning, executives are more than likely
doomed to repeat their mistakes. As we learn, we grow in our understanding, and as we grow in our
understanding, we can better lead change in ourselves and our organizations.

In closing I’d like to thank my guru, Peter Drucker. He has enlightened me once again by
challenging me to take his thinking to a deeper level of my understanding. I encourage you to think
about the Drucker practices of the effective executives, but to also consider those practices that may
still be in need of greater attention. In our opinion, the most successful executives will always look
at both sides of that coin.

William M. Klepper, Ph.D.

Academic Director and Faculty
Columbia Business School Executive Education

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Columbia Business School Executive Education