Most Common Executive Struggles – Part 3

Ryan Gottfredson

by Ryan Gottfredson

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92% of Executives Operate with an Undersophisticated Internal Operating System

Research on vertical development has found that people can operate with different internal operating systems that vary in their cognitive and emotional sophistication.

This same research has found that:

  • 7% of executives operate at the base level of vertical development, called Mind 1.0, in which their internal operating system is programmed to keep them safe, comfortable, and feeling like they belong.

People who operate at this level possess little cognitive and emotional sophistication and can be classified as “Good Soldiers.” They are dependent thinkers who want to be told what to do, and they have a hard time thinking outside the box.

  • 85% of executives operate at the second level of vertical development, called Mind 2.0, in which their internal operating system is programmed to get them to stand out, advance, and get ahead.

People who operate at this level possess a moderate amount of cognitive and emotional sophistication and can be classified as “Progress Makers.” They are independent thinkers who are passionate about winning, hitting goals, and outperforming others. Generally, those who operate at this level have internal insecurities, and they have the belief that if they win, hit, goals, and outperform others, they will feel “worthy.” Jack Welch is a classic example of a Progress Maker.

  • 8% of executives operate at the top level of vertical development, called Mind 3.0, in which their internal operating system is programmed to contribute, add value, and lift others.

People who operate at this level possess a high degree of cognitive and emotional sophistication and can be classified as “Value Creators.” They are interdependent thinkers who are not concerned about “standing in” (Mind 1.0) or “standing out” (Mind 2.0), this allows them to focus on contributing and adding value to a purpose bigger than themselves. Satya Nadella, Alan Mulally, Indra Nooyi, and Ed Catmull are greater examples of Value Creators.

My Experience Working with Executive Teams

Given the percentages above, it shouldn’t come as a surprise that most of the executive teams that I work with are comprised mostly of Mind 2.0 – Progress Maker executives.

In Part 2, I discuss how one of the consequences of this is that that Mind 2.0 executives possess a narrow window of tolerance for failure and problems. This is because they see failure and problems as an indication that they are not standing out, advancing, and getting ahead. While this makes sense to a Mind 2.0 executive, they have a hard time seeing that this perspective causes them to stifle creativity, innovation, and agility.

In this, Part 3, I want to highlight another common consequence of what happens when executives operate from Mind 2.0, and are wired to be a “Progress Maker.”

Common Executive Struggle #2: Focus Too Heavily on Short-term Results

When executives possess a Mind 2.0 internal operating system, they are wired to want to stand out, advance, and get ahead in the short-term. Almost always, short-term goals and benchmarks carry greater priority than the fulfilment of a long-term purpose.

For example, one executive that I recently spoke to said that the mandate from the shareholders was that they needed “double-digit growth every year.” Given this, where do you think their focus is: on the short-term or long-term? They are making decisions now to help them get double-digit growth this year, with little thought about how those decisions may help or hurt the organization in subsequent years.

The Three Debilitating Consequences of Focusing Too Heavily on Short-term Results

Across every executive team I have worked with, I have observed that their short-term focus has led to three debilitating consequences.

firefighters

First, they frequently get stuck fighting fires

When an executive is focused on achieving short-term results, they are inclined to operate as a “doer” instead of as a “leader.” This generally means that they are operating at a level below their job title. They are too far into the weeds. They have a hard time trusting those below them to do the work on time, so they end up stepping in and doing it. They are being a fire fighter instead of the fire captain.

Second, they are disconnected from a higher purpose of creating value for key stakeholders

Here is a simple reality that Mind 2.0 – Progress Makers have a hard time seeing: The more value their organization creates for its key stakeholders, the more it will grow and be successful. Thus, they do not ask the question: “How can we create greater value for our key stakeholders?”

What they are typically thinking is: “What can we do in the short-term to hit our goals?”

The answers to these two questions are dramatically different:

  • Asking how we create greater value for key stakeholders, of necessity, is:

Key Stakeholders > Ourselves

  • Asking how do we hit our short-term goals, of necessity, leads to:

Key Stakeholders < Ourselves

Who do you think is going to be a more successful organization in the long run?

Third, they fail to engage in strategic planning

When leaders are focused on the short term, are operating as “doers” stuck fighting fires, and have their eyes on their lap time instead of the full marathon they are running, naturally they aren’t going to operate very strategically.

One CEO that I have worked with is currently working well past a normal retirement age, but has yet to set up a succession plan. The resulting effect is that there is a lot of uncertainty and politics going on amidst the executive team as they are jockeying for position.

Also, in another executive team, each executive operated as an independent “doer.” They could only look through the lens of their personal responsibilities, and they failed to strategize together about how to best navigate forward. The consequence is that they operated as competitive silos focused on short-term gains.

Happy to Help

If you are on an executive team or have an executive team that is struggling in any of these ways, I would love to help. You can grab a time on my calendar here.

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