A few months ago I wrote about the Top 4 CEO Blind Spots, which were delegation, always being right, accountability, and finding the right hires. Here are three additional blind spots I encounter when coaching top CEOs.
1. Blind Spot Blindness
The number one blind spot Entrepreneurs and CEOs have is not recognizing their blind spots. A study performed by the Hay Group found that the top leaders within an organization were more likely to overrate themselves. Overrating leadership skills creates blind spots, which then derails their leadership effectiveness.
What To Do:
Have a warning system in place. As an Entrepreneur or CEO, you need at least one person, someone you trust in regard to his or her capabilities and motives, that understands your business but has an outside perspective to bounce ideas off of. They should be able to challenge your thinking before you act.
2. Cash Confusion
An organization’s economic model is the model that articulates how the activities (and their costs) and pricing create the cash flow from customers and how the two together drive the current and projected economic results. Many CEOs are blind to the company’s true economic model or overly complicate it, making it difficult to manage.
What to do:
The better a CEO understands the economic model, the better they can determine what adjustments they should try to improve the economic model performance. CEOs and Entrepreneurs need to calculate their operating cash cycle (OCC), which is the amount of time an organization’s cash is tied up in inventory and other assets before accounts receivable collects. Failure to understand their OCC means a profitable company could run out of cash.
3. Failure to Focus
The number of possible things an organization can do is endless. Some CEOs and Entrepreneurs are blind to the fact that the more things you try to do, the fewer things you will accomplish. It is really important to focus on the few things that matter and drive those things to completion, but many CEOs try to get their organizations to do too many things, and it actually makes the organization accomplish less.
What to do:
We live in the Attention Economy. There are so many things in this world that are vying for our time and Entrepreneurs and CEOs often fall victim to chasing any shiny new object or objective. A CEO actually only needs to focus on 1 to 4 decisions every year that will move an organization forward, everything else is noise. Remember, less is more.
What do you think? This is just a short list, are there any CEO blind spots you’ve encountered? What did you do about them?