MEMORY Nguwi’s article “Why Zimbabwean CEOs Fail”, which the Financial Gazette published on February 11 opened up an interesting subject for discussion because the success and failure of companies and the revival of the economy lies in the hands of chief executive officers (CEO)s.
Nguwi tackled the issue from a psychological perspective and there is a strategic perspective that can explain why some Zimbabwean CEOs fail.
Of course Nguwi’s title was a bit too generalised as it seemed to suggest that all Zimbabwean CEOs fail, which is not accurate because there are many Zimbabwean CEOs who are outperforming the environment through their deliberate strategic approach to produce results rather than through just being in the right market at the right time.
From a strategic perspective, I would like to state the following as the reasons that lead to the failure of most Zimbabwean CEOs who fail and bring their organisations down.
1. A poor mindset
Most of the reasons that Nguwi pointed out could be summarised as mindset issues. It is amazing that many Zimbabwean CEOs seem not to be aware that mindsets have a far greater impact on business performance than the environment and that without a change in their own mindsets and the mindsets of their teams, there would be no liberation from the yolk of failure. There are more than 13 mental and emotional patterns that make up a poor or wrong mindset and even just one of those patterns in a CEO can be fatal. One example of a poor mindset is: We still have CEOs who still believe line, hooker and sinker that the best solutions for their companies will come either from themselves or from some guru who must come from afar.
It reminds me of Acres of Diamonds where Ali Hafed left his diamond loaded farm and wandered far away because he was lured by stories of fabulous diamonds that were available some place far away. Ali Hafed spent all his prime life wandering about looking for the diamonds and just when he was about to die, he learnt with grief that the best ever diamonds in the world had been discovered in his former farm that he had sold. I call this the Ali Hafed Syndrome.
2. Lack of self awareness
Lack of accurate self awareness is major in CEO failures. Many CEOs know a lot more about other things than they know about themselves. CEOs ignore this major strategic issue to their peril. Because of poor self-awareness, CEOs run four major risks:
*Over-estimating their capacity and capabilities.
*Ignoring their best talents and abilities.
*Majoring in things they are not good at.
*Having a poorly constituted team.
We know many CEOs who overestimate their strategic capacity because they assume that their rising to the top is a validation of their strategic capacity. With this belief, they end up thinking that any failure must be because of the environment and not their strategic capacity and this is the trigger for most company failures.
5. Majoring in the wrong things
Many CEOs have no clue what they must really major in. They have no idea what exactly they must be doing as leaders and not necessarily as CEOs. Networking and building relationships is a key part of CEOship, but most CEOs overdo that at the expense of other key areas. In addition, most networking ends up being more of a social, tactical routine than a strategic exercise. Subscribing to a poor culture
6. Executive incest
This is self-explanatory. Most executives take this “birds of the same feather” too far and then build circles that consist of CEOs only and then barricade themselves from other groups and individuals that are not like them. The problem is everything within their circles eventually becomes stale and there is no injection of new perspectives, ways of thinking and ideas. Groupthink becomes the dominant part of making decisions and solving problems. This is why most company failures in Zimbabwe are systemic because the same broad decisions are applied to many companies through the phenomenon of groupthink. Any economy that runs through closed networks where a network barricades itself and makes it impenetrable from those outside it would eventually suffer heavily.
7. Poor strategic orientation
A big problem with most CEOs is that they do not have a clear mental difference between what is strategic and what is tactical in their job. My own model is that CEOs must spend at least 70 percent of their time on strategic issues and 30 percent of their mental time on tactical issues. The problem is, without knowing exactly what is strategic and what is tactical, CEOs run the serious risk of overspending time and resources on routine tactical issues at the expense of strategic issues. In many organisations, the problem is that most time and resources are spent on tactical issues and very little on strategic issues and, of course, we cannot cheat strategy and the result is failure. Many organisations pay with their blood for responding tactically to situations that require a strategic response. The organisational holocaust we have in Zimbabwe is a textbook example of this phenomenon.
8. Destructive competitiveness
Many CEOs are so competitive in their mindsets that they have absolutely no boundaries in terms of whom they must compete with. They want to be considered as the only ones who can do everything and this makes them immune to advice and help.
9. Destructive denialism
I have experienced many cases where CEOs know deep down that the situation is now beyond their control strategically, but they refuse to accept the reality and to seek help. They refuse to admit verbally, but their body language will be telling it all. Offer them help and they say they are on top of the situation, and a few months down the line, it is everywhere in the news that the company has collapsed. They are victims of self-denialism.
10. Poor orientation to opportunities
Failure, in my view, is when the company goes against the wishes of the decision-makers. Deliberately closing the company because you have done your strategic homework and concluded that you needed to get out of that market is not company failure. If CEOs were well oriented to grab opportunities, then companies would never fail. If it became necessary, they would deliberately close the company and shift into other markets in a well calculated manoeuvre. The problem is many CEOs never give enough attention to opportunities.
11. Poor learning and unlearning habits
Many CEOs do not want to learn and to unlearn. Although some read books a lot, they read them like novels and fail to translate what they learn into practical tools to run their organisations. They rarely attend any courses, especially those that focus on them and their mindsets. They never think that there are certain skills and capabilities they still need to develop and some patterns of thinking they many need to change. In many seminars and workshops, employees keep asking why the training they get does not also go to their top executives.
12. Weak or wrong response to situations
Many CEOs fail to quickly detect problems and respond decisively. They often realise that they are in trouble when a great deal of damage has already been done. Then they react tactically instead of responding. In many cases CEOs lack effective strategies and tools for solving problems, so they resort to two main things, chopping the numbers and switching to survival mode. Decisive, brutally ruthless, all out response is rare in organisations and, of course, failure becomes inevitable.
Simon Bere is a metastrategist, results engineer and a peak performance scientist and trainer. He is the chairperson of The Strategy Society. email@example.com
Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette