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CEO's La La Land

It’s essential for you as a CEO to look reality in the face to make the best decisions. Fail to face the facts, and you can’t lead properly.

In a four-year study of 286 companies, LeadershipIQ found that 23% of CEOs were fired for denying reality. The 1,087 board members who forced out their CEOs justified the decision by pointing out that they refused to recognize negative facts about their organizations’ performance. (1)

But it’s not all the CEOs’ fault!

Too many CEOs don’t realize they aren’t receiving proper feedback about their performance from their boards or leadership teams. The more disconnected a CEO is, the more his or her Leadership Effectiveness Index declines, which eventually hinders the company’s growth and negatively impacts its Business Performance Index. (2)

The Feedback Conundrum

It’s a fact of life: it’s risky to speak unpleasant truth to someone in power.

Employees are cautious about telling the truth to those over them, especially when the news is not good. The higher in the hierarchy of an organization the news must travel, the more cautious (and sometimes even fearful) employees feel. When the emperor has no clothes, nobody wants to be the one to tell him.

CEOs are often surprised—even shocked—by their 360-feedback results because they rarely receive honest feedback. Even executive teams hesitate to give unpleasant feedback to their CEOs since criticism is not something people naturally ask for or desire.

If you ask your coworkers for feedback but don’t know how to make them feel safe giving it, you won’t hear the truth. Getting the honest and undistorted truth about what’s going on in your organization is a challenge—but it’s essential for long-term success.

Opening Eyes

Once, I conducted a 360-degree feedback debriefing with the CEO of a company with 360 employees. The Dallas-based company has international offices on six continents, but it had gone through two rough years before the CEO—let’s call him Mike—succeeded in turning the company around (which required many hard calls, including massive layoffs).

Since Mike had kept the company from going under, it’s no surprise that in his self-assessment of his Leadership Effective Index, he placed himself just shy of 100 percentile points. However, the consolidated feedback from his board members and management team gave him an average Leadership Effectiveness Index of only 10 percentile points. (3)

Mike showed up ten times less effective than how he perceived himself! He had lived in a bubble until he saw his anonymous 360-degree feedback results.

“I saved this company from bankruptcy, and neither my board nor my team appreciated that,” he told me in frustration. “If not for me, they would be looking for new jobs now.”

Devastated, he didn’t go to the office for the next two days.

After recovering over the weekend, he faced his leadership team. He kept his cool, showed them the results, and sought answers without growing defensive. The team members told him, “You did a great job. Couldn’t have done it better. However, the leader we need to get us there is not the leader who got us here.”

That conversation was Mike’s “aha!” moment. He realized that upgrading his Leadership Effectiveness would create the new opportunities that he, his team, and his company needed. He recognized that the challenges awaiting them in the next growth phase had a higher level of complexity, a complexity that demanded a different mindset than his current turnaround mindset.

As you might have guessed, Mike wasn’t the one who had invited me to conduct the 360-degree feedback review. The board had asked me to help because they felt Mike had maxed out his capacity to lead the organization to the next level.

Consequently, Mike’s response surprised me. Leaders who are rated low on Leadership Effectiveness usually don’t do well with feedback (and those who provide negative feedback often pay the price). Such leaders don’t face their development gap. Their big egos eventually cost them their jobs.

Mike was different. He had the courage to face reality and start a journey to transform his leadership capacity and capability.

Along the way, he realized that he was not alone in the need to change. If he had not been aware of his low Leadership Effectiveness, other leaders in the company must be unaware of their true Leadership Effectiveness too. They might avoid difficult conversations, manipulate colleagues, or deny reality that was too inconvenient to face head-on.

Ultimately, the whole leadership team agreed to get 360-degree feedback as individuals and as a team. It wasn’t enough that the CEO was transforming—they all had to transform together!

To become better leaders, they had to set up processes for harvesting honest feedback and develop methods for learning from it. Feedback helps articulate reality that is hard to perceive from only one point of view. Once ineffective patterns are uncovered, we can finally do something about them.

Effective Feedback System

Just because you have a feedback system doesn’t mean it works the way you need it to. You want to create a system that:

  • works across all levels of leadership

  • creates a common leadership language

  • forms a culture that fosters the desired results

  • serves as an indicator of business results (part of the KPIs)

  • functions as a developmental tool to close development gaps

  • measures and tracks progress and impact on performance

If you haven’t put that type of feedback system in place yet, you have a diminished awareness of what is happening inside your organization. In more extreme cases, you can become disconnected from the reality of your situation entirely.

Visionary CEOs are the most susceptible to this disconnect since they can skip practical steps and land on a compelling vision. Their team requires the steps in order to embody the vision, but if the team members don’t feel safe (and most don’t!), they won’t tell the truth when they think that the vision is not consistent with where they currently are.

Without a proper feedback system, the truth will not come out, and individual and collective Leadership Effectiveness will decline. You don’t want ineffectiveness to weaken your business results.

The organization cannot perform at a level higher than that of the collective effectiveness of its leadership team.

The 7 Steps to Get Out of the Clouds

  1. Find the Facts: Implement anonymous 360-degree Leadership Effectiveness feedback for developmental purposes.

  2. Lead the Way: Be the first to receive the 360-degree Leadership Effectiveness feedback—the CEO is the role model.

  3. Work with a Coach: Collaborate with your coach to devise a plan for reaching the next level of Leadership Effectiveness.

  4. Determine the Direction: Create a leadership development plan that links Leadership Effectiveness with business performance.

  5. Get the Team Involved: Share your development plan with your leadership team and invite them to join.

  6. Monitor the Results: Scale up collective effectiveness and track the impact on business performance. 

  7. Keep Feedback Coming: Ask your leadership team members to invite their teams to start the same process—the ripple effect across the company will elevate organizational capacity and capability to create the outcomes that matter most.




  3. Percentile points are benchmarked to the Leadership Circle database of 200,000 top executives.

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