One of the challenges that most CEOs face is how to evaluate the performance of their executives. Because a CEO doesn’t have expert level knowledge on every area of a business, many CEOs feel ill-equipped to evaluate executive performance. But if the CEO can’t evaluate their performance, who can? And if no one is evaluating the executives’ performance, how can they improve?
This need for consistent evaluation of executives is one reason it’s critical to have a Leadership System in place in your organization. A Leadership System specifies the key tools that management has at their disposal and how to use each.
The following three tools can be used by every manager — including executives — to deliver maximum performance: management, leadership, and coaching. Let’s examine what it looks like to assess an executive’s performance based on each.
As an executive over a functional area, you make many critical decisions that affect performance, including:
- Who you hire
- What responsibilities you assign
- What programs you pursue
- What you spend money on
The list is almost endless. Every day, executives are asked to make many decisions large and small about their area of responsibility. As CEO, you may not be able to evaluate any one decision made by an executive, but you can certainly get a sense of how well they are using this tool. Do they hire great people? Do they utilize the strengths of each team member? Do they execute their assigned responsibilities on time and budget? If these and other areas are running smoothly, it’s a sign that the executive is skilled with this first tool of management.
We define leadership as the ability to influence others to follow your direction willingly. While management is about making decisions and telling people what to do, good leadership answers why someone should enthusiastically do something as part of the organization. As CEO, you can evaluate your executives’ leadership impact within the organization by observing whether other employees willingly follow their lead.
Are the teams they manage eager to get on board with their vision and plans, or are they only doing it because the executive is “the boss”? If the executive left the organization, would you be worried that they might take many great people with them? As you evaluate the executive on their leadership, remember that great leaders have influence not only within their team but also across the organization.
Coaching is an interactive process for enabling the development of employees. One of my favorite questions to employees when I’m trying to evaluate their manager’s coaching ability is, “How has your manager made you better this year?” If the employee is not able to give some specifics right off the top, I know that the manager is not doing a great job of coaching. Members of an executive’s team should always be getting better, and it’s the executive’s responsibility to make it happen. Does this mean every executive should be teaching their employees some skill at all times? Not necessarily. Certainly, if the executive has some specific skill that will help the team, they can have at it. But the ongoing process of coaching is broader. And it is rooted in the executive’s responsibility to identify the resources that employees need to learn and grow as professionals.
This manage-lead-coach framework offers CEOs a consistent, systematic way to evaluate their executives, regardless of how well the CEO knows the functional area each executive oversees. For some large and distributed organizations, you may have to use surveys to better understand how the executive is doing. But no matter how you gather the information, using these criteria to evaluate your executives is likely a significant improvement over most current systems.