00:00What exactly are companies looking for out of a CEO candidate today, and how does that differ from maybe what they were looking for in the past?
00:07You know, it's been amazing to see how if you're an inside candidate and you're lucky to be on that elite shortlist,
00:13they're looking for someone who can actually be an evangelist for change and bring in that new character for the company if they need to transform and everybody's being challenged to do that.
00:22Whereas if you're an outsider, you now need to do the opposite.
00:26You need to show that you can hit the ground running and that you have context and that you won't kill the culture that you're trying to harvest and evangelize.
00:34But one thing we've seen a lot lately, and it gets to this idea of kind of like when these CEOs come in, whether they're internal or not,
00:42change, as you know, is not always well received by the people underneath them.
00:46And we've seen a couple of big CEO changes over the last year, including Starbucks and a few other places,
00:51where we've seen them try to implement some meaningful changes and seen meaningful pushback by the employees under them.
00:57How do you thread that needle?
00:58I think it's important that the CEO comes in and establishes a strong foundation of trust.
01:05That foundation of trust, they've got to get out and meet the employees.
01:08You look at folks like Hubert Jolie when he took over at Best Buy.
01:12He established that level of trust that was critical for all those from the top down through the organization,
01:20started to believe in the vision of that leadership.
01:23And I think that's an essential thing to build first.
01:26They were in kind of an existential place at the time, too.
01:29So when Corey Berry had to come and fill her shoes, she sent a letter that said,
01:34six pages filled with things I need to get better at.
01:38So it's that humility, too, that's necessary, I think, to really appreciate what's there and develop the team.
01:43I want to talk a little bit about the board and how they come into these conversations,
01:47because there's this idea out there that one of the biggest jobs that the board of a company has
01:52is to look at CEO suggestion and make sure that that is a smooth process.
01:59You think about the conversations that the Disney board must be having right now, for example.
02:03I mean, is that still the case in this current environment?
02:06Would you say that is one of the top jobs that the board needs to actually nail?
02:10Absolutely. Succession is the ultimate act of stewardship.
02:15And it ensures that leadership compounds like capital over time.
02:21That is an essential role of the board.
02:24And to think about it in those terms about compounding leadership, which goes back to compounding trust.
02:29And I want to talk a little bit about the rise of the co-CEO model, Mark, because it's something you're seeing more.
02:36I think about, you know, the asset management industry where I spend a lot of time.
02:40Dimensional, for example, has co-CEOs.
02:43And it's a model that sometimes works, but sometimes it doesn't.
02:46And I just wonder why we're seeing more and more of these situations arise.
02:49It's still very rare, but I think it has to do with what Byron was just talking about in terms of complexity and the disruption going on right now.
02:57And it's the board's hedge.
02:59It's a bet on two superstars to say if you can pair a great technologist with a founder or a great execution machine with a great technology machine.
03:10Now you think about how extraordinary and impossible it is to be a CEO today.
03:17Sometimes having those two characters in place is critical.
03:20The key, though, is the thing that makes or breaks it and the reason it doesn't work out is because of swim lanes.
03:26They have to be so explicit.
03:27The board has to have that plan.
03:29And you have to decide who makes what decision and when and what those goals are.
03:33Well, that's what I'm curious about.
03:34Why do you even need the co-CEO?
03:36I mean, that structure you talked about, certainly we've seen in the tech startup space, that's been the model.
03:40You have the grand visionary who maybe started it, but that person maybe moves up to the chair or to some other role.
03:46And then you actually have more of a manager, if you will, in the CEO slots.
03:50But it seems like a lot of companies are resistant to doing that for some reason.
03:54Or maybe the founders are resistant to it.
03:56Well, there you go.
03:56And you were mentioning earlier how you might have the boomerang CEO.
03:59So sometimes being able to pair that founder who's charismatic and visionary with someone who is really maybe known for getting things done in a new way.
04:08So they're able to attract both this sense of legacy, but also energize it and make some changes that are necessary.
04:15The other thing I'm curious about, Byron, too, is also about compensation and how that gets structured.
04:19Because that's changed a lot as well.
04:21And obviously you have some extremes, like whatever the heck's going on over at Tesla.
04:24But even when you get beyond that level, we've seen some very intriguing pay packages, including pay packages that seem to be negotiated specifically by the CEO, him or herself.
04:34You know, it's always interesting to me to come across CEOs who the pay package isn't as important as their vision.
04:40And I've known CEOs who reject the pay package because it's too high.
04:45Oh, yeah?
04:46Really?
04:46Which it's that idea that humility is not timidity.
04:50How often does that actually happen?
04:52Very rarely.
04:53But I'd like to see it happen more, frankly.
04:58I mean, does money really bring happiness?
05:01Well...
05:01There's a point at which you've got to have it.
05:03And it brings...
05:04No, no, question that enough does.
05:05Right.
05:06But too much.
05:07Right.
05:08I was with a gentleman and happened to run into a former CEO.
05:12And he's coaching a lot of depressed CEOs because they're wondering what to do with their lives, particularly if they make a big sale.
05:20But that gets to the idea of the board selection process.
05:23Assuming the CEO's not already there, the idea of what are they hiring?
05:27Are they just hiring someone to be a manager?
05:28Are they hiring more of the visionaries, someone who will get more fulfillment out of building whatever they're trying to build?
05:34In the work I do, it attracts, I think, the ones that have a vision.
05:37Okay.
05:38They're about change.
05:39They're about building the esprit de corps in leadership that changes the composition, meaning changes the attraction of talent to their organization.
05:48Yeah.
05:49I mean, that's one of the key indicators of a strong leader.
05:51Do people want to work for them?
05:53Yeah.
05:53I talked to a company recently.
05:56People were coming back out of retirement because they said, I want to work for that guy.
06:00Interesting.
06:01Yeah.
06:01Well, I do want to ask you guys specifically about your book, because, again, the title here, CEO Ready, What You Need to Know to Earn the Job.
06:08Is the intended audience just CEO hopefuls or does it speak to a broader part of the population as well?
06:15Good question.
06:17Absolutely not.
06:18This is written for, first and foremost, I would say for board members to understand that succession, the responsibility of succession in a holistic way, that they're seeing the different types of CEOs so they can help evaluate the type their company needs.
06:36Because, unfortunately, no company is a one-size-fits-all kind of leadership environment.
06:40They need to build within their company.
06:43And so, no, the book was written for entrepreneurs, board members, people who report to the C-suite and people who report to the CEO because it's building the talent pipeline that takes us long-term into the future, particularly in this fast-moving age that we call AI.
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