The role of a CEO has become much more complex and challenging. The way a CEO behaves is a direct reflection of a company’s image and the culture within it. How they carry themselves, communicate, and make decisions will contribute to how a company is perceived. Therefore, a leader like the CEO needs to have the right mindset. Without it, it’s easy to feel inadequate or doubtful, which can really impact their effectiveness and confidence. A strong mindset helps to tackle challenges, inspire team members, and keep vision on track.
In the book CEO Excellence by McKinsey senior partners Carolyn Dewar, Scott Keller and Vikram Malhotra, it focuses on different mindsets that help top CEOs stand out in their key responsibilities. While these responsibilities are relevant to all CEOs, it shows how the best CEOs approach and handle them.
Mindset #1: Set the direction
Knowing that success is unlikely, the best CEOs use boldness in three key areas: setting a vision, creating a strategy, and deciding how to use resources.
Setting vision
CEOs must have vision, but the best ones make it bold. The best CEOs create their vision by finding where what their company does well, what the market needs, and what they are passionate about come together, all while making sure the company can gain profits. While profits are important, it is not all that. A strong vision is important so that they can inspire and motivate their team more. This will naturally, in turn, lead them to financial success.
Creating a strategy
The best CEOs create effective strategies by continuously reinventing their companies and thinking like owners. They stay ahead of future trends and invest in emerging opportunities, making bold decisions based on their long-term vision. By thoroughly understanding risks and rewards, they balance short-term challenges with long-term goals to drive success.
Deciding how to use resources
Acting like an outsider is the answer. While this might sound counterintuitive, they still think like owners when making decisions. They challenge existing norms and use a zero-based approach to resource allocation, ensuring every investment aligns with the company’s strategy and long-term goals.
Mindset #2: Organization Alignment
The best CEOs approach leadership differently by treating the so-called “soft stuff”—culture, organizational design, and talent. This means they put importance in their own people. This is done as seriously as they would with technical and financial matters. They know that even with a great strategy, success depends on aligning the organization and addressing people’s emotions and attitudes.
One of them is that they focus on filling the important roles with the right people. CEOs who know to hire the right people knows to:
- Clearly define high-value roles.
- Pay attention to critical but overlooked positions.
- Look for talent in unexpected places.
- Build a strong pipeline of future leaders.
By doing this, they more than double the chances of executing their strategy successfully, ensuring that both the technical and human sides of the business are in sync.
Mindset #3: Mobilizing Leaders
The best CEOs focus on how their executive team works together, not just on their meetings and tasks. They address team dynamics, biases, and individual agendas to ensure the team collaborates effectively and drives the company forward.
The best CEOs focus on creating a strong and high-performing team by:
- Choosing members based on tasks they can do, skills and mindset for the job.
- Clearly outlining what it means to be part of the core team.
- Acting quickly but fairly decisions about who should stay or leave the team based on performance and fit.
- They balanced by staying involved with the team while also keeping a distance to make objective decisions.
- Expand their leadership team beyond their immediate group to ensure diverse expertise and perspectives.
- Investing in team building to improve team cohesion and skills.
Mindset #4: Board Engagement
The best CEOs help their boards by building strong relationships, ensuring board members have the right skills, and making meetings productive. They view their role as supporting the board to better assist in running the business.
Firstly, they build trust with their boards by being radically transparent, developing strong relationships with the board chair, engaging with individual directors, and involving the board in interactions with management. Then, board effectiveness is enhanced by clearly defining the roles of directors, outlining the skills needed, providing ongoing education, and encouraging regular board refreshment. To make board meetings productive, start with private sessions, focusing on future opportunities, understanding board members’ perspectives, and letting the board lead discussions.
Mindset #5: Stakeholder Connection
The best CEOs excel in meetings by deeply understanding the motivations and needs of stakeholders, ensuring that interactions are meaningful and relevant. They prioritize building strong, trust-based relationships with all external groups to support long-term business success.
To do this, they:
- Make the big picture impactful: They do this by clearly defining their company’s social purpose and integrating it into every aspect of their business. It is important to assess a company’s strengths to address societal issues and stand up for their values, even if it is risky. This in turn builds trust and credibility.
- Focus on the important part: They manage stakeholder interactions by deeply understanding and respecting diverse perspectives. They prioritize engaging directly with external stakeholders, from customers and suppliers to government officials and communities. With significant time and effort, they gather valuable insights and maintain consistent messages across all communication channels.
- Remain positive: They are the best at managing crises, which is by preparing for the worst while hoping for the best. They stress-test their company to spot potential issues and set up a command center to handle crises. They keep a long-term view and show resilience, making decisions based on what is right and profitable.
Mindset #6: Personal Effectiveness
The best CEOs focus on doing what only they can do. They prioritize managing their time and energy, select a leadership model that suits their strengths, and maintain a clear perspective. They recognize that to be a CEO, psychological and physical fitness are important. This includes taking care of their time and energy so that they could focus on work. They know when to delegate tasks and concentrate on the most critical issues only they can address. Discipline and self-awareness are keys to their success.
Not only that, they are aware that humility is also important for effective leadership. They are also employees and will seek guidance, show gratitute and help their successors succeed. This is because the focus is not only about them but also other people.
Conclusions
The distinction between exceptional CEOs and their peers lies in the cultivation of six key mindsets that shape their approach to leadership. These mindsets are not merely traits but essential strategies that drive success today. By embracing these mindsets, top CEOs can navigate challenges with confidence and inspire their teams and stakeholders to achieve collective goals. In the end, the best CEOs recognize that their role extends beyond personal achievement. It involves nurturing a thriving culture, empowering others, and ensuring the long-term sustainability of their companies.
