Robert Sher: Part 1 of an interview by Bob Morris

SherRob Sher is founding principal of CEO to CEO, a consulting firm of former chief executives that improves the leadership infrastructure of midsized companies seeking to accelerate their performance. He has published extensively on the successful leadership traits of CEOs of mid-market companies. His first book, published in 2007, is The Feel of the Deal: How I Built a Business Through Acquisitions. His latest book, Mighty Midsized Companies: How Leaders Overcome 7 Silent Growth Killers, was recently published by Bibliomotion in 2014. Rob is also a regular columnist for the online version of Forbes and CFO Magazine and recently published a seven part series on HBR online.

He and his partners act as consulting CEOs who help client companies’ CEOs and their top teams to navigate difficult passages. Running a company is a series of judgment calls, each of which can have major consequences. They often help make those judgment calls, drawing on deep experience as CEOs and by helping their clients think through situations. Some people call him a CEO coach. Others call him a CEO mentor. And some think of him as their own “Chairman of the Board.”

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Morris: Before discussing Mighty Midsized Companies, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Sher: Warren Bennis, the author of On Becoming a Leader and so many other groundbreaking books on leadership, really made me a better leader. It was an incredible awakening. I started reading his books as they came out in the mid 1980’s, and at that time I was on a personal development binge, reading (and listening to) Wayne Dyer, Brian Tracy, Tony Robbins and Earl Nightingale. I was so honored when Warren Bennis agreed to endorse my newest book, as it turned out just a few weeks before his passing.

Morris: The greatest impact on your professional development? How so?

Sher: In 1996 I joined a peer group of CEOs called The Alliance of Chief Executives, in northern California. Sitting with peer CEOs every month and learning from their wisdom (and their mistakes) was a quantum jump in my learning. I still actively participate in Alliance groups. You see, when you run just one business, there is a limit on how many things—good or bad—can happen to you that turn into lessons. In a group of 12, the process is accelerated. Similar groups exist everywhere in the country. Vistage and YPO are two of the largest.

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Sher: In 2004 I was sitting in my CEO group and shared some frustrations (for the umpteenth time) about some seemingly intractable frustrations that were holding me back from leading my company to the next level. The group (which had known me for years) hammered mercilessly on me for over an hour (we CEOs are hard headed and often need a drubbing to take notice). Their point was that I needed to affirmatively find a solid long-term solution or to move on with my career. That day I went back to my office and triggered a series of events that led to my exit, and to the founding of my consulting firm in 2007. I’ve never looked back. Interestingly, we often play this role for clients, who need a push, plus a little confidence and guidance to make courageous changes that help them break free from their past and pursue a brighter future.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Sher: It has been very important. It gave me a solid understanding of the basics of business, like accounting and marketing. It seemed slow and laborious at the time, but from every class, I drew nuggets. Realize that I worked while going to school, leading what was then a small business. So I had every chance to practice what I learned. I got my graduate degree when I was 27 in an executive program, and I realized, to my surprise, that I was truly an executive. Too often, small and middle market business leaders exist in an isolated world. They really don’t know what they’re made of, how they really stack up. That certainly was true of me, and my confidence took a big step up from the experience.

That, and Michael Porter’s teachings! I also learned how to learn, and today, many years later, what I learned in a class has given way to what I now learn on my own. I can become an expert in many things if I devote some time and focus to it. My formal education also includes teaching at the MBA level, and assembling my curriculum. I learned a lot by having to organize my thoughts and deliver them effectively in a classroom.

Morris: What do you know now about the business world that you wish you knew when you when to work full-time for the first time? Why?

Sher: Building a strong, deep, wide network. I grew up being taught about hard work, but teamwork and friends were not emphasized at all. I got a long way with hard work and good insights. It wasn’t until way later that I learned that who you know (and who you’ve helped along the way) is a powerful factor for success. And helping people is gratifying as well!

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Sher: The more leaders you can harness in pursuit of your vision, the more quickly it will become a reality. Even employees at the bottom of the org chart can feel a bit like leaders if they have some latitude, and are allowed to participate in decision-making. Understand where your people are, and work to help them get better, if only in small increments. An incremental approach to greatness is what works best, and the people will indeed feel like they have ownership of the success. As the top leader, sometimes it can feel a little unfair that little credit is given—yet offsetting that is an amazing team that will continue to perform at high levels.

Morris: From Howard Aiken: “Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.”

Sher: From the CEO’s seat, I advocate planting the seeds of my ideas within my team and letting them grow there. Then, hopefully (!) my team will take ownership of an idea, and it will blossom. But that’s not stealing my ideas, that’s nurturing them. I believe that in midsized companies, there must be a process for evaluating ideas, so that the best ones will eventually become “obvious” and eagerly adopted, not “forced down people’s throats.”

Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”

Sher: I’m probably not deep enough to really appreciate this, but from my perspective, in business, it’s a reminder that the best and most profitable growth comes when you are innovating to find scalable opportunities and then growing them before everyone else jumps in.

Morris: From Isaac Asimov: “The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s odd….’”

Sher: Our ears are more powerful than our mouths. Too many of us fail to listen, to observe with care and to think and deliberate. While we may love our ideas the moment they pop into our heads, most of them require research and observation before they are worthy of acclaim.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Sher: Being clear about why we are doing something, why it is essential, and how it ties into our most important strategies is a great place to start before diving into any business project.

Morris: In one of Tom Davenport’s recent books, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Sher: There is never, ever a substitute for a great leader. The best leaders create and maintain the conditions for great teams to make great decisions. In most cases, the leader won’t have to make the decision, because they have a great team doing so. Is a great leader a great man? I think so, but not because of their individual contribution or personal judgment. Likewise, I would point out the vast difference between a tyrant with “direct control” and a “single leader” of a great team. Approach is everything.

Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather Which mistakes should we make in order to test our deeply held assumptions?'” Your response?

Sher: Of course we must test things, and many ideals will fail. My big point is that failing on a small scale makes sense, but there’s no excuse for failing big without de-risking first on a small scale. Too many midsized firms make reckless attempts at growth, blowing big money. That’s foolish, a stupid mistake. Nothing brilliant about that whatsoever.

Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?

Sher: They haven’t learned the discipline of earned trust. Earned trust is where you require a new hire to show—to prove—that they can deliver. As they do deliver, they get more and more latitude, and soon the boss can delegate freely. Instead, what happens too often is they delegate too much too quickly, the new hire disappoints, and the boss starts to think he or she can’t trust anyone ever again. But maybe it’s a good thing so many executives can’t delegate, because there’s not that much room at the top, and the ones that can’t delegate make it easier for those who can to become CEOs.

Morris: The greatest leaders throughout history (with rare exception) were great storytellers. What do you make of that?

Sher: People learn through stories. They love that mode of communication. When leaders tell stories, their people listen.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Sher: By making people dissatisfied. If people are content and comfortable, they won’t be likely to change. People will become dissatisfied if they yearn for an achievement; if they look forward to an incredible reward. If they’re on a team and they’re sliding toward the bottom of their team’s performance range, they’ll feel pressure to step it up. There is a process to creating a high performance environment, and a way to measure them, but it’s much too much to lay out here.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?

Sher: Every year, more and more, CEOs work in a fishbowl, even those leading closely held companies. Your employees talk on Glassdoor, Twitter, and vendors, customers and everyone else chatter on social media, without boundaries. My advice: stick to your values and lead in a way you can explain and be proud of, no matter who hears about it.

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Rob cordially invites you to check out the resources at these websites:

All about Mighty Midsized Companies link

Free assessments and other tools link

Rob’s consulting firm, CEO to CEO, website link

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