CEO EvaluationI call it the “Executive Paradox”, a phrase I think I coined (I’m not sure).  The Executive Paradox says simply that, paradoxically, the higher you go up in your company the less truly honest feedback you get.

This is paradoxical because the higher your rank in your company, the more there is at stake.  The positive impact of providing good leadership goes up as you move up; conversely, the price of bad leadership also grows bigger as you move up.  And good leadership requires honest feedback.

There are probably a few good reasons for the Executive Paradox.

The first has to do with human behavior.  Few of us walk into a senior leader’s office and say, “Let me tell you how I think you’re doing in your job”, especially if the senior leader happens to be your boss.

The other has to do with the fact that the performance evaluation systems in most of our organizations are not very good.  They are relics of the past that resemble report cards more than anything else, and they really don’t provide useful or timely performance feedback to the recipients.

A client once said to me at the conclusion of a 360° assessment project for his peers and his boss, “No offense, Larry, but in a perfect world there would be no need for a 360”.  I responded with the obvious question, “What would that perfect world look like?”  He said, “Every leader would know exactly how they are doing in their job”.  I replied, “No offense taken.  You are absolutely right.  Most companies are a long way from that perfect world.  That’s why they (and you) pay me to provide the feedback you are otherwise not receiving”.

So, if you accept this premise for a moment, which of your leaders receives the least feedback?  Your CEO.

Think about it.  They outrank everybody in the place.  They can make or break the careers of everyone else in the organization.  Who is going to give them feedback on their leadership?  Unless they solicit it through a structured process (like a 360° assessment), they receive their feedback mostly from their Boards of Directors.

Most Boards are ill-equipped to provide this feedback.  To begin with, they meet typically only once a quarter.  They can judge the CEO’s leadership mostly by the material that he or she has provided to them in their Board meeting packages.  There is typically a Compensation Committee that meets once a year to judge the CEO’s leadership, and adjust his/her compensation.  This process is usually subjective at best, and includes a lot of “Kentucky Windage”.

In addition, the Board members often feel compelled on some level to support the CEO whom they have selected to begin with, which may also stand in the way of providing good honest feedback.

Several of our clients have recognized this shortfall. 

They have us assist their Boards with their CEO evaluation process.  We do that by focusing primarily on three elements:

  • The CEO’s goals
  • Results against those goals
  • How the CEO accomplished those results

We use an online assessment in which Board members rate both goal accomplishment and the importance of that goal and its results.  The Board members tell us that this system provides structure and objectivity to the CEO evaluation process that were previously lacking.

How about you?  Do you receive all the leadership feedback you need?  If so, how do you receive it?  If not, why not?

Do you give all the feedback your staff needs?  If so, how?  If not, why not?

Have you seen the Executive Paradox at work in your organization?

As always, we’d like to know your thoughts.