CEO Shoptalk — Situational Awareness

CEOs have a hard job. Keeping it is one of the most difficult parts of the job. Keeping your job as a CEO may depend on your ability to understand the situation — something pilots call “situational awareness.”

In an airplane, you have several instruments that an instrument-trained pilot scans to determine the situation — speed, direction, level flight, climbing, descending, fuel status, GPS (redundant), and George (George is the autopilot). I have taken to calling George Georgette.

When planning the flight, the pilot can map a route and get a clearance from air traffic control to fly that route. It may be a series of electronic checkpoints or “GPS direct” meaning you punch in your launch point and your destination and the GPS figures out the route — a direct route.

You can even lash Georgette to the yoke and get her to fly that route — exactly. Along the way, you talk to ground control (permission to taxi), the tower (permission to takeoff on a particular runway), departure control (control and physical separation from other aircraft while exiting the airport area), air traffic control (enroute control to your destination), approach at the destination, the tower, and ground control again.

At each stage of the flight, the pilot has situational awareness.

[In this particular flight, I am flying at 9,000 feet altitude VFR from KSEM (Selma, Alabama) to KHQU (Thomson, Georgia) which is 185NM to the east and we are moving at 166 knots groundspeed. So, there must be a slight head wind. It will take 1:07 to make the journey. The plane is level (look at the turn speed indicator and the vertical speed indicator) and I am tracking with the flight path with a small cross wind. Also, note the green light in the middle of the picture. I am transferring fuel from an outboard tip tank to the corresponding interior tank. The light that is off indicates that the left tank transfer is complete while the right tank transfer is not yet complete. I have 3/4 full tanks inboard. To the right you can see two GPS units and above them is George. George is flying the plane and I am monitoring the instruments.]

Note the tip tanks below. The tip tanks mean Georgetown, Texas to Charleston, SC without a fuel stop if the wind cooperates. Bladder control becomes the critical input.

OK, so, Big Red Car, what about the CEO?

OK, dear reader, a CEO has to develop a similar set of instruments that will signal to her the “situation” and will spark her to inquire thereby creating situational awareness.

Here is a short list of what that might look like:

 1. Plan — the existence of clear, written Vision, Mission, Strategy, Tactics, Objectives, Values, Culture plans and tracking progress versus the plan. Nobody stays on plan all the time, but like an airplane, you have to fly the company to the destination while you have fuel in the tanks. How are you doing versus plan?

 2. Staffing — the existence of a staffing plan that provides the best mix of people to flesh out a team. You may, quite possibly, not be there, but where are you?

What is your retention rate telling you? What is your hiring plan and how are you doing versus plan? Is the culture helping you find and retain talent?

 3. Financial — you have to know exactly where you are in relation to the company’s capital requirements.

How long can you continue to burn money at this rate and survive?

Does that trigger some fundraising requirement? Fundraising takes twice as long as you think even when you know exactly what you are doing.

 4. Work environment — a CEO’s job is to provide a set of objectives in support of strategy and tactics and a work environment in which the team can do their best work.

If the A/C is not working, then the team cannot do their best work.

 5. Strategic relationships — a CEO can be fired by the Board of Directors, so that relationship is pretty damn critical, but a CEO has to look to strategic partners, large customers as well.

 6. The marketplace — a CEO has to know where the company stands in the marketplace and the industry.

There are one or two others, but I told you it would be a short list.

What does a CEO do, Big Red Car?

There are some structural things a CEO can do. Here they are:

 1. Have robust, up-to-date plans. That is obvious.

The CEO owns Vision and Values. The rest of them require input from management.

 2. Have detailed job descriptions and clear objectives at the employee level.

 3. Have a timely Performance Appraisal system — driven by objective accomplishment — that keeps performance on target, rewards winners, and holds shortcomers accountable.

Make it timely and tie compensation to the execution of the performance appraisal. There is nothing worse than giving a performance appraisal and then saying, “I’ll get back to you on the comp piece.”

That is fraught with peril.

 4. Conduct an Annual Anonymous Company Survey.

Anonymous Company Survey

 Obviously, you have to analyze what you learn and take action on it. Take action. No action will just irritate the alligators.

5. Conduct an Annual Anonymous Board Survey.

The Anonymous Board Survey

Analyze the data and meet with the Chairperson of the Board to discuss it. Have selective conversations with individual board members. Hey, these are the guys who will one day fire you.

The stats on CEOs surviving until Year 5 are abysmal. Fight back now.

 6. Manage by wandering around. Make yourself, force yourself, to engage with the employees on a regular basis.

I used to take the entire accounting staff out for Mexican food, ask them what was new in their life, and end with giving them a platform to advise me about anything.

Favorite question, “What do I not know that you think I should know?”

My CFO and Controller were both guys and the majority of the accounting staff were women, so I always used to tease the guys after the lunch — to which they were not invited — that they were getting shellacked for being too testosterone aggressive. Not true. Way ahead of #MeToo BTW.

 7. Visit with some or all of your largest customers in person at their shop. CEOs don’t do this enough.

Find a reason why you have to be in Iowa and go visit that client.

How much turmoil would it cause if you lost that client? Pre-invest in that not happening.

 8. Go to industry confabs and learn by osmosis. What is everyone else doing and why?

I had one client who turned this into an art form and propelled the business forward by this technique alone.

 9. Get regular outside help.

Join YPO (Young President Organization), TAB (The Alternative Board), Vistage. There are others. You may struggle for eligibility, but persevere.

Get a mentor. Do this.

Hire a CEO coach. Look, a CEO coach, who has actually been a CEO for a long time, knows exactly what those butterflies that morph into condors with sharp claws feel like and they can’t fire you. If you confide in a board member, they not only can fire you, they will.

 10. As part of your Employment Agreement, insist on annual performance appraisals. Two things — have an Employment Agreement. Insist on annual performance appraisals. This is both pro-active and defensive.

When you are at the curb calling an Uber with a file box in your hands with all your stuff, please do not say, “Damn, I wish I’d had an Employment Agreement.” Do not be that guy.


11. Keep a journal and track your paranoid concerns — unfortunately, they are not paranoid.

So, what did we do just now? We constructed the set of instruments that will control your performance at the company like the instruments in an airplane.

Parting shot, Big Red Car?

A day will come when you are so confident as a CEO that you can turn George or Georgette on to run the company because you have built a great team and can delegate everything.

Until then, think like an airplane. Create a series of instruments that provide situation awareness. You can do this. You sort of have to do it or you won’t have a job.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car with 33 years of experience as a CEO and 7 years coaching CEOs. I am on your side and I know how hard it can be. Call me if I can help. No bull.