Harvard "CEO Test"
7 questions to be a more effective leader
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The challenges of executive leadership continue to increase—most CEOs do not last more than 5 years in the job.
The Harvard Business Review book, The CEO Test: Master the Challenges That Make or Break All Leaders, breaks down 7 questions to help you be a more effective leader, whether you are the CEO or a first-line manager.
The 7 questions are:
Can you develop a simple plan for your strategy?
Can you make the culture real and make it matter?
Can you build teams that are true teams?
Can you lead transformation?
Can you really listen?
Can you handle a crisis?
Can you master the inner game of leadership?
For each question, I will write out my thoughts and some associated actions.
To help, I’ve pulled in my friend, Sue Bethanis (Executive Coach, CEO/Founder of Mariposa Leadership), to share her comments. Sue is an expert in working with C-Suite leaders and has coached 400+ tech executives. She was also my best coach when I was an Amazon VP.
In the intensive class that Sue and I teach, Cracking the C-suite, we go into much greater depth on exactly how to develop the leadership behaviors of a top executive. The next cohort is March 8-9, 2025 (Saturday-Sunday) — You get 10% off if you enroll by February 23, 2025 (use code CSUITE10 at checkout).
The class is already 84% full (we only teach this class live twice a year and each cohort is limited to 50 students).
Consider joining us if this matches your career goal.
Here are the questions and our opinions.
To keep this newsletter from being too long, Sue and I will cover the remaining questions in part 2, which will come out in 2 weeks. If you aren’t yet subscribed, subscribe to get it in your inbox. (update: link to part 2)
The “CEO Test” 7 questions and What You Can Learn:
1. Can you develop a simple plan for your strategy?
My Experience (Ethan)
At Amazon, we had a Leadership Principle (LP) called ‘Invent and Simplify’.
This is how we express it at Amazon, but this idea is shared by many of the most successful companies in the world. Many of the best strategies are very, very simple (at least to express).
Two examples:
FedEx: Get the package there overnight, regardless.
Intel: Sell Pentiums (their new CPU at the time).
I’ve always particularly loved the FedEx example, because it makes clear their one value - get the package there overnight. The customer doesn’t care what that takes us, and they pay for that single result. If it happens they are happy, whether it was easy or hard for the company.
Amazon borrowed this lesson from FedEx. At a time when some companies offered people a choice between “air” and “ground” shipping, Amazon offered a delivery time. They knew you did not care how you got it; you cared when you got it.
The strategic lesson is this: Strive for simplicity. If your strategy is simple enough, then your whole team, even your least able performers, can follow it and act on it.
If the strategy is complicated, odds are it will be executed poorly and fail.
Sue’s comments
I love these simple messages from FedEx and Intel. In order to align with these simple visions, the planning process needs to be simple as well.
It’s your job as an exec to nail the “WHAT” – the guardrails from which the rest of the org implements (the “HOW”).
An implementation plan has 5 elements that break down to quarterly outputs:
Mission - what is your org’s purpose?
Vision - what is your org striving for in the next 2 year period?
Strategies - what are 3 primary strategies to tackle in the next year?
Initiatives - what projects will make those strategies come alive each quarter?
Actions/Owners - what actions are needed for each initiative and who owns what?
Numbers 4 and 5 form an ongoing dashboard to track movement and accomplishments. I recommend that you have a VP/Sr. Director role whose job is to track and motivate progress.
Keep it Simple!
Don’t overcomplicate the process!
2. Can you make the culture real and matter?
My Experience
Your company needs to “give out free cigarettes.”
AKA, you need to embody the culture you promote.
In their leadership study, Harvard concluded that there is no single best culture, and this mirrors the conclusions in the older book, Built to Last. That book talks about the RJR Nabisco tobacco company, where every person was given two cases of cigarettes twice a month on payday.
The message was clear - “We are a culture that believes in smoking.”
You did not “have” to smoke, but in a world of anti-smoking propaganda, this company made clear that they had a pro-smoking culture.
You don’t have to like smoking or this approach to see the power:
People who couldn’t support smoking left that business. The rest of the people pulled in one direction.
Starbucks employs this lesson much more modestly. Employees get a free pound of coffee every week. This is the same idea, if less polarizing. Starbucks is saying:
“We are a company that makes and sells coffee. People who do not like coffee should probably work somewhere else.”
CEOs who are successful in building strong cultures realize that you do not need everyone. You need your tribe, your collection of people who share your mission.
Outsiders often call companies with strong cultures “cults.” Notice that “cult” is actually the root word in culture. A “cult” indicates a very strong following of a particular set of beliefs and practices.
When it comes to a company, this can make for a very powerful organization because emotion and belief drive and sustain execution.
Sue’s comments
When I wrote my dissertation on “How to Transform Culture in Organizations” many moons ago, I defined culture as “the way things are around here.” I haven’t changed my definition of culture, but the “around here” certainly has changed.
“Around here” for many companies these days is a remote or hybrid work environment, which makes it even more important to have clear culture norms.
Generally, the “way things are” is made up of Principles, Processes, and People. Ethan mentioned Amazon’s principle of “Invent and Simplify” – a great principle that’s one of 16 (which is probably too many for most companies).
One of my Executive clients uses these 3 simple principles for her organization:
Service to the customers: reminder, that our customers are internal and external.
Take ownership of the business: be proactive, solve problems, and be 1% better every day.
Commitment to your team: proactively support and help each other; over-communicate and in a timely manner.
This executive coaches her employees on these principles, recruits based on them, and measures performance based on them.
That type of consistency throughout the employee experience is how you establish and maintain culture norms.
P.S. Sue and I did a 42-minute Maven Lightning Lesson talk on "Up Your Game to Influence Senior Leaders" where we covered executive presence and answered live audience questions. Watch it YouTube.