Four Types of CEO and Implications

Implications for Mentoring and Succession Planning at the Executive Level

Summary and added thoughts by Barry Sweeny

Every year for 11 years Strategy + Business Magazine (S+B) (1) has  conducted research on the patterns in CEO turnover and succession in the top 2,500 public companies in the world. This article is a summary and discussion of the second half of that research and it does so in three parts.

  1. First we will present the four types of CEOs that research revealed and the implications of these four types for mentoring and executive succession planning.
  2. After that, we will compare those CEO styles with the four styles of leadership based on the Hershey and Blanchard research and “situational” leadership model.
  3. This comparison and analysis will lead us to offer our own insights and recommendations for effective leadership development, executive mentoring, and succession.

The Four Kinds of CEO – The S + B Research Findings

The research found that there are four kinds of corporate management. These four types are essential leadership styles and they seem to reflect both the style of C – level executives and the way that the corporation perceives itself functioning. This latter aspect may be partly an expression of the way that the company Board perceives the organization and wishes it to function, and may also be more simply a reflection of the style of the current or most recent CEO.

In either case, knowing these four styles is a critical issue since it may dictate how other C – level executives need to function and it may frame the ways in which executive succession activities are best planned and executed. After all, if the Board wants the company to function a specific way, or if the style of the current or most recent CEO has been successful and the company has succeeded, then it may be essential for those who are being developed and prepared in an executive succession program to realize the styles of management expected and either prepare themselves to function that way, or realize they need to make alternative career plans. In fact, as mentoring is provided to top performing managers it may be essential for that mentoring to intentionally be planned and implemented to align with those expectations.


What Are the Four Styles of Corporate Management?

ISSUES Model 1 – Holding Company Model 2 – Strategic Management Model 3 – Active Management Model 4 – Operationally Involved
How We Describe Ourselves We are an investment company We are strategic leaders of a collection of diverse entities We are both managers and strategic leaders of tightly linked entities We manage a pretty focused business
Our Focus We want your results We want to know what you will DO We want to know HOW you will do it. We want to help run the business.
How We Create Value by management of a very diverse portfolio We build links and synergies among the entities We partner with biz units to co-plan and provide expertise. by corporate management and control of the business.
Generalization Empowerment and direction setters, with defined results. Guidance on strategies and clear expectations, but you define your results. Close monitoring and supervision of your plans. Directive, day-to-day, engagement, decision making, focus creation,
and co-planning.
Example Warren Buffet, Berkshire Hathaway Juno Cho, LG Corporation John H. Hammergren, McKesson Corporation Alan Mulally, Ford Motor Company
Who Manages Succession Planning and Leadership Development? Each level of managers has the same roles Each management level has different, specific roles. Upper management guides the processes while lower managers do it. C – level executives manage and execute the processes.
% of the 291 companies with 2010 CEO Changes  10% 20% 30% 40%

As the succession planning and leadership development activities are created and executed, the corporate management style should be understood and analyzed for inherent strengths and weaknesses so that emerging leaders are prepared as a team to fit the style, contribute what is needed to the executive team, and succeed within it.


2. Comparison of the Corporate Styles with the Situational Leadership Model of Hershey and Blanchard

The 1972 book by Hershey and Blanchard (H – B) provided us with the “Situational Leadership” (SL) model, a variation of which I have routinely and diversely used even since I learned of it in 1989. I continue to rely of this model and find it highly effective.

Briefly stated this model says that leadership and management of persons should be adjusted based on the level of professional maturity of that person. Specifically, what is adjusted is the balance in emphasis between relational focused development and work, and task-focused work and accomplishment. The implication of this is that, as a person learns and grows, their professional maturity will evolve and, therefore, so must the style of the manager’s leadership if it is to remain appropriate.

My variation of the H – B SL model is as follows.

Mentor Style Title >
Tell – Directive
SELL – Explain
COLLABORATE – Partnership
DELEGATE – Empower
Symbols >
Tr
TR
tR
tr
Task Focus of Mentor >
Leader feels major responsibility for task accomplishment Task accomplishment focus of the leader is still strong Somewhat less Very little leadership or management needed due to person’s maturity
and responsibility
Relationship Focus of Mentor  >
Build relationship as you can but it’s a minor issue at first. Increased emphasis as trust and confidence grows Still strong, and supportive Lessened to allow greater independence.

As the reader may realize, there is considerable alignment across the S + B Four CEO / Corporate Types and the H – B Situational Leadership Model. Just how well aligned can be seen by comparing each stage in both models, shown at each horizontal level of the combined chart below.

CORPORATE STYLES
MENTORING  STYLES
4. We want to help run the business. Directive, day-to-day, engagement,
decision making, focus creation, and co-planning.
1.  TELL – DIRECTIVE
3. Close monitoring and supervision of your plans. 2. SELL – EXPLAIN
2. Guidance on strategies and clear expectations, but you define your
results.
3. COLLABORATE -PARTNER
1. Empowerment and direction setters, with defined results. 4. DELEGATE – EMPOWER

 

As one can see in the above comparison, there is a considerable alignment across these four styles and the two models.

However, the next part of our comparison will point out one way in which these two models do NOT align. This one factor is a very significant difference, and it highlights what seems to me to be a weakness in the corporate style approach.

The H-B “Mentoring Styles” approach requires that the mentor (leader in the relationship) assess the developmental level of the protege and shift their own style to best match what they do to the needs of the protege.

By contrast, the S+B Corporate Styles approach inherently believes there is one, clear, best way to lead regardless of changes in the internal or external factors with which the company and it’s people must cope.

The logic and experience of this author suggest that such a “one right way” answer cannot possible always be the best – that flexibility and adaptation will always be necessary in quickly changing environments. The recent focus on “organizational reseliance’ in the business literature implies agreement with this concept. “Those who cannot adapt will die”.

The equivalent language of the S+B Corporate Styles would seem to need to include, “As internal and external factors change, so must the corporate style of company leadership, if it is to remain appropriate to the evolving competitive environment and continue to provide appropriate company leadership.”

Insights and Recommendations for Effective Leadership Development, Executive Mentoring, and Succession.

Regarding strategies that increase retention, during leadership development and succession planning, persons are best developed using an “increasing bench strength” approach in which all top performers are given opportunities to grow.  However, behind this is the understanding that as people move up in levels of the business hierarchy, there are fewer positions and opportunities. This means that, eventually some persons will not be utilized to fill openings even though they are well prepared and ready to do so.

Realistic employees and organizations will acknowledge this issue early in the process and will still invest in persons and prepare them for a future not all can obtain within this specific organization. The acknowledgment that some will eventually leave, but that the company will help develop them anyway, is a huge retention factor all along during the developmental stages until that ultimate time when there is “no where” for a person to go but “outside” the company to seek further opportunities.

Given this best practice method, and considering the prior discussions of the corporate styles and of the H – B models that integrate, in some ways so well, we can now turn to specific recommendations for the mentoring of top performers who are in your leadership development / succession “pipeline”.

During 1988, when I first became involved in leading a mentoring program, I developed a “Mentoring Styles Model” (3) and self-assessment which was based on the H- B Situational Leadership Model.Basically, here is how it works. Note the clear relationship to both the S + B and H – B Situational Leadership models.The idea of “Mentoring Styles” defines the need for a mentor to gradually and intentionally shift emphasis between task and relationship foci to better meet the developmental and evolving needs of the protege. This requires that the mentor:

  • be trained in the styles model
  • have the opportunity to assess and understand the strengths and limitations of their own style of balancing and shifting that balance over time, and…
  • be trained in the assessment of the protege’s developmental maturity and remaining needs.

In fact, the results of that assessment will guide the mentor in determining the specific balance of relationship versus task which is appropriate.

A. Typically, early in mentoring a more directing, more task-oriented style is appropriate because the earliest things a protégé needs to learn are “one right way” kinds of information – information that the mentor’s experience can provide and which provision saves the protégé needless trial and error learning. There usually is little or no time this early for them to step out of the setting and get to know each other and build their relationship.

B. Later, when the protégé knows most of this kind of information, the mentoring often must shift to a more balanced (task and relationship) “collaborative” style.

C. Toward the end of the mentoring relationship, the balance should shift again to be nearly all on relational methods (encouragement, support, etc.) since the protégé knows by this time all the needed tasks and how and when to do them. To avoid a dependency, the mentor purposely steps back from the task focus.

D. Finally, the mentor assumes a delegating style in which both task and relational foci are reduced as the mentor withdraws and the protégé becomes a fully functioning professional.

This mentoring styles approach means that the top performers in leadership development and executive succession programs should receive mentoring which is planned and implemented to exactly model and use the leadership / CEO style models that the protege will eventually need to use themselves when placed at higher levels of responsibility. If they personally experience that model as they are being mentored, and if the mentor helps them debrief and understand the mentoring model as reflective of best practice leadership models, then, when it’s time for that mentee to become the leader, (s)he will both be able to do these best practices, and will be an effective mentor to their direct reports who will look to their manager for growth, learning, and improvement.

Simply stated, the mentoring received during leadership development must directly MODEL and TEACH the styles and adjustment of styles that are to be expected when that protege becomes a leader and mentor to others.

A Factor to Consider When Selecting Executives From Your “Leadership Development – Succession Bench

If, during leadership development and mentoring of top performers, your approach has incorporated the above advice, then it would be a natural extension of that approach to evaluate persons for potential executive leadership roles based on criteria such as

  • The ability of a candidate to assess a direct report’s level of professional maturity, and therefore, to understand that person’s developmental needs;
  • The ability of a candidate to recognize the leadership style which is appropriate to a situation with a direct report;
  • The ability of a candidate to adapt their own leadership style to keep it appropriate to the evolving needs and maturity of a direct report;
  • The ability of a candidate to explain how mentoring of direct reports for the sake of leadership development and performance improvement is related to the same models of leading and managing direct reports.

If this advice is followed, not only will you have created a self-sustaining pipeline of leadership candidates, you will have retained them until there are appropriate roles for them to assume, and their own leadership will result in the development and retention of those that report to them. In one sense, this is not just a leadership development and succession model, it will be a culture of mentoring that results. The people will be winners and the company will too as retention of effective persons increases and continual improvement of results is realized.

References

(1) CEO Succession 2010: The Four Types of CEOs, by Ken Favaro, Per-Ola Karlsson, and Gary L. Neilson. Strategy + Business Magazine, May 24, 2011, / Summer 2011 / Issue 63

(2) Hersey, P., and Blanchard, K.H, (1972). Management of Organizational Behavior: Leading Human Resources, Prentice Hall, Upper Saddle River, N.J.

(3) “The Mentoring Process Mentoring Styles”, retrieved from http://mentoring-association.org/processes/mentoring-process/mentoring-styles/