It’s common knowledge that the job of a leader--particularly CEOs-- has never been more challenging, as well as under increasing scrutiny. Confidence in business and political leaders is at an all time low. What may not be as appreciated as much is how lonely the position is. While many not be inclined to sympathize with CEOs given their generous compensation and benefits, the negative impact this has on a CEO’s performance and the organization is often overlooked.
Today’s president or CEO faces more pressures than ever. Business leaders are dealing with rapidly changing markets, technologies and workforces, increased financial and legal scrutiny . . . and more. Yet, we most frequently hear of their generous compensation, perks and attention. And it is not my intention here to suggest effusing sympathy for CEOs. Rather, there should be concern about how their isolation and loneliness can have a detrimental impact on organizations.
The success rate and longevity of top executives is vastly different than a generation ago. In the past two decades, 30% of Fortune 500 CEOs have lasted less than 3 years. Top executive failure rates as high as 75% and rarely less than 30%. Sydney Finkelstein, author of Why Smart Executives Fail, and David Dotlich and Peter C. Cairo, authors of, Why CEOs Fail: The 11 Behaviors That Can Derail Your Climb To The Top And How To Manage Them, argue that often powerful and successful leaders feel they don’t need advice from anyone. A study by Kelly See, Elizabeth Wolfe Morrison, and Naomi Rothman, published in Organizational Behavior and Human Decision, concluded the higher the self-confidence of a leader, the less likely these leaders are open to advice and feedback.
A new study led by David F. Larcker the Center for Leadership Development and Research at Stanford Graduate School of Business together with The Miles Group shows that CEOs do feel lonely and isolated. More than 200 CEOs, board directors and senior executives of North American public and private companies were polled in the 2013 Executive Coaching Survey which formed the basis of the study. The research looked at what kind of leadership advice CEOs and their top executives are—and aren’t—receiving. A key finding from the study was a shortage of advice at the top. Nearly 66% of CEOs do not receive coaching or leadership advice from outside consultants or coaches, while 100% of them stated that they are receptive to making changes based on feedback.
According to a poll of 83 CEOs in the U.S. conducted by management consulting firm RHR International, being the boss brought with it feelings of isolation and job requirements that varied greatly from the original expectations. According to the survey, 50% of CEOs felt secluded in the position of this group; 61% felt that this seclusion was a hindrance to their performance. First time CEOs were more negatively affected by this loneliness, with 70% reporting that it hurt them in their ability to do their job.
So what is the solution to this isolation and it’s negative impact on the leader and the organization? Certainly one solution is the use of outside advisors in the form of executive coaches.
Stanford University management professor Robert Sutton warned against the “toxic tandem” of leadership where those in charge become more self-absorbed and less attuned to others’ perspectives precisely when they need outside information the most.
Marshall Goldsmith, a high profile coach of leaders in Fortune 500 companies and author of The Leader of the Future, argues leaders need coaches when “they feel that a change in behavior—either for themselves or their team members—can make a significant difference in the long-term success of the organization.”
Eric Schmidt, Executive Chairman of Google, said his best advice to new CEOs is to have a coach. “Once I realized I could trust him [the coach] and that he could help me with perspective, I decided this was a great idea…” he said. While he admits the cost of executive coaches, particularly a good one, is not cheap, he adds “compared to the decisions CEOs make, money is not the issue.”
“Given how vitally important it is for the CEO to be getting the best possible counsel, independent of their board, in order to maintain the health of the corporation, it’s concerning that so many of them are ‘going it alone,’” says Stephen Miles, CEO of The Miles Group, which was co-author of the Stanford study. “Even the best-of-the-best CEOs have their blind spots and can dramatically improve their performance with an outside perspective weighing in.”
According to several research studies, where CEOs do engage coaches, they typically focus on topics such as sharing leadership/delegation, conflict management, team building, and mentoring. One reason for leadership crisis we face today may be the gaps between how leaders see themselves and how others see them. Call it self-awareness. These blind spots can be career limiting. The wider the gap, the more resistance to change. It also makes it difficult to create a positive organizational culture where openness and honesty are encouraged.
What is interesting to note is that the “softer skills” and more demanding area of compassion/empathy, self-awareness and self-management of emotions tend to be avoided by CEOs and their coaches, perhaps in part to a lack of expertise by coaches to venture into those areas. Yet, in my two decades of coaching leaders I believe this is the most important and productive area to address. Partly, it’s because of deficiencies here that often result in leader failure or disappointment.
In summary, there’s clear evidence now that it’s lonely at the top and that loneliness can not only negatively affect the leader, but have possible detrimental effects on the organization. Smart leaders and their boards will recognize the value of turning to trusted advisors such as coaches to help navigate stormy waters and keep leaders mentally and emotionally grounded.