The blueprint for an excellent CEO in engineering and manufacturing

The CEO in engineering and manufacturing companies occupies a distinctly unusual, yet critical role. It’s the most powerful position, yet in many ways exists in isolation. There are no equal peers, there is no supervisor to bounce ideas off; it is supremely influential in ways that extend beyond the obvious. It requires a technical foundation combined with an eclectic toolkit of interpersonal skills.

Looking at the role of the CEO in this way, it’s not surprising that only 3 in 5 CEOs live up to expectations in their first 18 months. That’s quite a gamble when your business success depends more on this one individual than anyone else.

So is there a blueprint for identifying an excellent CEO before you give them the title?

The problems with today
Before we crack on with what makes for some of the most successful CEOs in the industry at the moment as a framework for finding the next CEO for your business, let’s quickly look at the limitations of this approach.

If we only recruit in the same mould as always, then we’ll never break that mould. And it’s in breaking the mould we stand to see and take advantage of opportunities that no one else sees.

At the moment, across the board, less than 5% Fortune 500 CEOs are women, and there are only three that are black. Across the engineering industry in the UK as a whole, just 12% of engineers are women and UK engineering is believed to be losing £11bn per year due to LGBT+ engineers feeling uncomfortable at work.

Yet we know that diversity and inclusion significantly improves the bottom line.

In short, we cannot simply look at the make-up of today’s excellent CEOs in engineering and manufacturing to determine a blueprint for the excellent CEOs of tomorrow, as we will be limiting our potential. However, that’s not to say there aren’t things we can learn from this generation of top CEOs to combine with awareness of other aspects, to create our own blueprint for CEO success.

The components of an effective CEO
The role of the CEO is so unique – in itself and for each organisation – that in many ways we’re trying to contain the uncontainable. However, when we look closely, there are characteristics, such as drive and risk tolerance, in the way CEOs think and behave, which can help us to rationalise their success.

A great place to get an excellent overview is by looking at some fascinating research done by McKinsey. Their research looked at the core elements of the CEO’s role (e.g. setting strategy and leading the top team) and broke these down into 18 specific responsibilities that are exclusive to the CEO (e.g. the CEO’s responsibility to make the final decision on allocation of capital). They then looked at the mindsets and practices within these that made for the best CEOs. The result is their model for CEO excellence.

These different elements need to be summarised, so that they become useful markers for creating a blueprint:

Corporate strategy: Focus on beating the odds

Top CEOs don’t just set the vision, they reframe it. As a result, they set strategy boldly, and act quickly, e.g. with acquisitions and resource allocation. They also get on and make these moves in their early days in position. The individuals most likely to do this are recruited from outside the organisation.

Organisational alignment: Manage performance and health with equal rigour

Successful CEOs are fearless when it comes to talent management. Lower performers are moved out of influential roles quickly, without stalling. This helps to ensure they themselves have the support and action squad they need, but also symbolically assert their strength and confidence. They match talent to the roles within the organisation which create the greatest value. They identify these roles and discover where they really lie in the business, even if they aren’t the roles which seem most important on paper. This is done whilst also protecting the stability of the company. They also uncover the elements of organisational culture that lead to success, and focus on role modelling these.

Team and processes: Put dynamics ahead of mechanics

Its personalities not processes which really matter at the top of an organisation. This can be hard for manufacturing and engineering businesses to accept, but it’s a reality. Excellent CEOs recognise this and are adept at identifying the right mix of executives, which tackle things such as bias. They create exceptional leadership teams which balance capability, diversity and performance, without detriment to loyalty and trust. It’s a tough thing to do and needs to be done ensuring coherence and collaboration between individual management processes.

Board engagement: Help directors help the business

The relationship between the board and the CEO is critical to the health of the business. Successful CEOs recognise this and welcome active involvement from the board, wherever possible. By building and nurturing exceptional relationships between the board, themselves and key players in the business, rooted in transparency and trust, they enable the board’s visions to be heard, and skill set benefited from. This is vital within manufacturing and engineering, where board members are likely to have deep level knowledge of the niche in which the business operates, or alternatively broader business acumen which can benefit technical organisations.

External stakeholders: Centre on the long-term ‘Why?’

The CEO makes the mission, vision and values of the business central to every aspect of it. The best CEOs identify why the business really matters. This is how they gain results which are needed and respected. It’s also how they identify problems and risks in advance, and build resilience to them.

Personal working norms: Do what only you can do

It’s not unsurprising that the CEO role is ripe for burnout. Truly effective CEOs recognise the potential of this and take care to manage their own wellbeing so that they can offer their usefulness where it will be of greatest benefit. It’s how they use their time and energy most effectively. The CEO therefore needs to have the self-discipline to limit their involvement to tasks where only they can make the difference, and then fill that role authentically. They institute a small group who will act as their check and balance process, even when the rest of the organisation just says “yes”, as well as gaining regular exposure to how those at all levels of the organisation experience the business.

Creating a blueprint, not a post-mortem

Knowing what leads to the most effective CEO is vital to understand before recruiting them. Typically, we can only really measure the success of a CEO based on the value they add in role. Even this is a dubious measure because of so many influencing factors. This is why you need specialised talent to recruit specialised talent.

You need an expert who understands the CEO blueprint within your own niche in order to ascertain the potential strength of a CEO before bringing them on board.

Engineering and Manufacturing is a sector I know very well. Recruitment of senior personnel is something I also know very well. I can guarantee that by working with a trusted executive consultant, the odds of realising the potential of your senior hires and their capacity to live up to expectation goes well beyond the norms.

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