It has become common practice for CEOs and Executive Board Members in the Anglo-Saxon business world with heavy responsibilities to have a mentor. More and more multinationals in Europe and Asia are now also discovering the value of Board & Executive Committee Mentoring. Marga Hoek, a partner at European market leader CMi, explains the background of this trend.
You recently wrote that the nature and dynamics of leadership have changed so much over the past few decades that you can’t really compare today’s leadership to that of, say, 20 years ago. What do you mean by that?
‘Various studies have shown that CEO turnover has increased sharply in recent years. While talented managers used to be appointed CEO around their mid-forties and would remain in that role until they retired, today’s CEOs stay with the same company for an average of less than five years. This barely gives them time to grow and develop in their role or to properly define it and gradually make it their own. High-profile, well-established CEOs, whose names and faces become synonymous with the companies they run, are becoming increasingly rare – most are basically just “passing through”. This means CEOs have much less time to make an impact and are under pressure to leave their mark on the company’s strategy and do it in the right way of course. And that’s not an easy task given the current pace of change. It means that as a CEO you have to grow quickly in your role to meet this challenge. Because we always forget that no matter how much experience you have, as a CEO you will be faced with countless new challenges.’
And a mentor can help a CEO to rise to those challenges?
‘Absolutely, because the major advantage of having a mentor when you’re a CEO is that there’s no need to reinvent the wheel. You get to benefit from the experience, knowledge and network of someone who’s 10 to 15 years ahead of you in their development and embed that wisdom into your decision-making processes and actions. Many of the difficulties we see in the boardroom today are actually human and have been around forever. The problem faced by modern CEOs is that they are given very little time to come up with solutions in an environment in which errors of judgment can potentially have huge implications.’
But can’t CEOs fall back on their executive team and consult with the Supervisory Board? So they’re not entirely on their own?
‘This is in practice one of the classic issues where less experienced CEOs can really use the help of a more seasoned mentor. They’re looking for answers to questions such as: “How do I manage my own board, build a strong relationship with my chairman and deal with disputes and conflicts of interest in my executive team?” Plus they need to start planning their succession as soon as they take up their position.’
It seems that CEO has become the toughest, most challenging job in the private sector.
‘Yes and that is why it’s actually no longer responsible to assume that someone can get by without any form of support structure in place. And that shouldn’t be the case, because the benefits of a mentor far outweigh the investment. A good mentor can help a CEO not just to accelerate their personal growth curve, but also to mitigate the risks both for the person and the company. And considering just how many potential risks there are – which are often underestimated by both the Executive Board and the CEO – a mentor is actually indispensable.’
‘The problem is that there’s no practical manual for managers in these types of positions. Each individual CEO has his own problems to contend with, which might involve anything from post-merger integration to activist shareholders and from impending reputational damage to IPOs, integration processes, demergers, or a combination of any of these aspects. The importance of these various issues depends to some extent on the company’s governance system – one-tier or two-tier – but I can now say from experience that demand for mentoring is on the rise. And that’s logical because the effectiveness of a CEO and his or her teammates has a huge impact on the company’s performance.’
You referred to managing internal “political” processes as a “classic mentoring issue”. Are there others?
‘Other commonly encountered issues include: how do I direct a – often disruptive – transformation in my company? How do I manage a post-merger integration process? How can I effectively build my external profile as a CEO? How do I manage all the different stakeholders? And in the case of a new phase involving, for example, a reorganisation: How can I effectively adapt my leadership style and “rebrand” myself? Essentially: How can I achieve optimum growth as a leader? So there are plenty of questions.’
CEOs and executive board members usually have completed degrees at institutions such as Harvard, Stanford and INSEAD. Does a mentor really have anything to add?
‘I believe they do have something to contribute, as a mentor is someone with a unique set of experiences, who has worked all over the world in various chairman roles and who has really been around the proverbial block. That’s extremely valuable to any potential mentee. You need to be aware that a CEO really has no one – either within or outside the company – to really confide in, with whom they can share their doubts and let their guard down. They can do all those things with a mentor – and they actually receive valuable answers to their questions on top of that. That gives both mental clarity and peace of mind and leads to more effective leadership, faster growth and development and, above all, much better decisions. And that’s literally priceless.’
