In The CEO Mindset, corporate leader Shiv Shivakumar breaks down what it truly takes to succeed in the corner office—and why developing a CEO’s way of thinking starts long before you get the title. Read an exclusive excerpt below!
I teach regularly at business schools across the world. In India, when I teach, I ask the students a simple question: ‘Who amongst you aspires to be a CEO?’ Nearly 90 per cent of the class put up their hands. After the aspiration to be a CEO, many want the next best—to be entrepreneurs. In the West, the students are keen to know about emerging industries, and they always come to me with some idea or other they are working on. They ask me to pick holes in their ideas. There is certainly a near universal fascination among young people for the role of CEO, whatever the reason behind it— maybe aspirational, or maybe a measure of their confidence or security. It is much more in India than other parts of the world where I teach, maybe because we are a developing economy where many opportunities have come up in the last two decades, maybe it’s the adoption of technology skills, etc. It is also a factor of media coverage. In India, businesses and CEOs are given a lot of coverage. In the Middle East, for example, it’s much more about the sheikh and his people. In the USA, maybe it’s the greater risk appetite that inspires everyone to
want to be a startup CEO.
The CEO is clearly an aspirational role, viewed from the outside. When I quiz students and young managers about the reason they want to be a CEO, they invariably come up with
three: to acquire status; to acquire power; to make money. I personally feel this is a narrow, material list of reasons. Maybe this list was understandable in a past world where roles and responsibilities in the corporate world were easier to define. But the role of the CEO has considerably evolved over time.
Let’s see how the role began and how the term itself came into use.
The role and designation of CEO, or chief executive officer, first came into use over a century ago. The term was first used around 1914 in Australia. In the USA, it began to be used only
around 1972 in the business context, but it actually came into being in 1782, when the designation of chief executive officer was used to describe the governors and other leaders in the executive ranks in the thirteen colonies of the British in America.
In India, the early district collectors were working as CEOs of their districts—they had a tax target, information-gathering targets and development targets. The current role of CEO has evolved to meet the higher demands of corporate shareholders. The shareholders place emphasis on financial and competitive metrics for their companies, and the CEO is responsible for them. This is very different from when the role began in corporations. So, though the title remains the same, the demands and skills needed for the role have changed significantly since the advent of technology, globalization and changes in regulation. I think technology has made everything more centralized in governments and corporations.
You need to be of a certain mindset to fulfil the role of CEO. But you don’t develop this CEO mindset upon getting the CEO job. You display elements of the CEO mindset in every job starting with the junior roles you take on in any organization.
I label this CEO mindset as C H A R L I E.
It stands for:
Communication
Holistic thinking
Absolute standards
Reframing of issues
Legacy thinking
Investing in people
Ethical execution
A good CEO mindset, according to me, starts with holistic thinking. No other job in a company offers you the leeway to think wide, get into depth of matters when needed and create across-the-board impact. So, how does one learn to think like a CEO? A basic MBA degree teaches you organizational design and the nuances of being a CEO. You learn the nuances by preparing and debating case studies, which are invariably about a problem faced by a hypothetical CEO. However, that’s a theoretical structure. The real world does not follow the guidelines of a case study.
When you are a junior manager, what you essentially deliver to the company revolves around execution metrics.
While you execute for results, do also think about the larger aspect of what’s happening around the job you are executing. Ask yourself how you can reshape the job with your skills
and thinking. When I was a sales manager in charge of beverages and soft drinks at Unilever, we tended to think of soft drinks distribution as akin to distribution of soaps, detergents and
tea. Nothing was farther from that. We were failing miserably. I reached out to Krishnaswamy who was sales manager of Campa Cola in Chennai and requested him to teach me the fundamentals of soft drinks distribution. I then realized that soft drinks distribution needed to be expanded and contracted depending on the season. I learnt that inventory
at a soft drinks distributor is dead inventory.
The only place for inventory of this product is on the retail shelves. Armed with these learnings, I nervously proposed to Hrishikesh Bhattacharyya, the director of Unilever India that we should trim our inventory to three days’ and only drive visibility on the shelves. He quizzed me, asking me where I had learnt
these new principles. After listening carefully to what I had to say, he approved the plan I suggested. Our sales tripled in
the next few months. The learning you can have from this episode is that if you want to think holistically, your organization and your industry are the wrong place to start. Your company and your industry have done the same thing for years, and the people there are rewarded for not rocking the boat. Some things may stay the
same, but most things change.
Whenever we asked the retailer how we (the FMCG company I worked for) could challenge Nirma in detergents, he would say introduce a yellow detergent powder. Whenever we asked the retailer how to fight Colgate, he would say introduce a mintier toothpaste. Current industry people can only give you their views, which are based on the past. They can never look ahead. If you want to look ahead and think holistically, then speak to people in other industries, ideally leading-edge industries, and you can bring the concepts and business models
from that industry to your own doorstep.
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