Ten Common CEO Mistakes by Jeffrey Fox

1. Not in the marketplace talking to customers. 

CEO's must constantly meet with customers, distributors, retailers, stores.  CEO's that have first hand knowledge of the marketplace gain a competitive advantage.  CEO's that know what the customers want and don't want; what competitors are doing; what new products are appearing, can get their organizations to counter attack faster.  If the CEO is in the marketplace, so too will the rest of the organization be in front of customers, which is where everyone should be.

2. Spending too much time in their office. 

Good CEO's visit customers in the marketplace; make sales calls; meet with suppliers to improve quality and to reduce costs.  Good CEO's walk the halls and the nooks and crannies of the company asking questions of employees at every level, and listening to what the people say.  CEO's are in the R&D labs; eat in the company cafeteria; visit the mailroom.  CEO's sequestered in their office may not even be a witness to the changing world passing by.

3. Overpaying for acquisitions.

 Many CEO's and the management teams know exactly what to do to be sure there is a positive return on the acquisition investment, and that the new company is accretive to earnings.  But many CEO's do not.  For all kinds of reasons, they overpay and burden their company with debt, diluted shares, or both.  The promised consolidation of redundant departments doesn't happen.  The promise of new sales growth is empty.  Culture clash hampers integration.  Disciplined CEO's calculate a conservative five-year discounted cash flow stream, and buy at a 20% discount to that stream.

4. Hunker down in tough times.

It is indisputable that those companies that out market, out sell, out innovate, out hustle their competition in tough times, emerge from the downturn in a stronger market share and profit position than their competitors.  Strong CEO's don't go dark to the market; don't hunker down in bomb shelters; don't pull back.  Strong CEO's encourage more sales calls, speed innovation, increase training, increase advertising.  Ineffective CEO's cut marketing, put restrictions on sales travel budgets, postpone new product launches, lay off profit-positive customer-facing employees.  Good CEO's see tough times as opportunities, and do things to thrive.  Weak CEO's cut, cut, cut, and pray to survive.

5. Seek personal publicity.

CEO's should not seek to get their picture on the cover of magazines, or in television stories.  Rather, CEO's should seek to get their products' pictures on the cover of a magazine.  Personal publicity is fine if it is the result of an award, some recognition.  It is not ok if the CEO is on an ego trip.  CEO's don't have the time to sit for a glowing puff piece on what a great executive he or she is.  CEO's should invest that time with their #1 customer.  It is better business.

6.Not attending every second of a national sales meeting.

At a sales meeting, the CEO should be sitting in the front row.  Paying attention.  Taking notes.  Asking questions.  Learning what is going on.  Learning what challenges the sales people face.  Seeing the presenters in action.  Evaluating talent.  CEO's that attend sales meeting send a signal that  revenues are critical to the company.  They send a signal that the sales force is critical, and that they appreciate the tough job of selling.  To not attend, or to just show up and give a speech, signals that whatever else the CEO is doing is more important than what the marketing and sales and engineering and customer service and tech service people are doing: and that is not true.

7.Staying aloof from the hiring practices at low levels.

Good companies hire good people.  They hire slowly and fire fast.  CEO's are the custodian's of a winning company's culture.  Nothing damages a company's culture and performance expectations than hiring people that don't fit.  Good CEO's are always interested in who is getting hired, and why and how.  Inspecting the hiring practices at all levels in the company puts hiring managers on alert that only the best people are acceptable.

8.  Not pricing to value.

Good companies are constantly trying to innovate; to improve quality; to add value to the customer experience.  Companies must dollarize the value and price-to-value, not to a target gross margin percentage.  If the company sells a product that lasts 50% longer than the competitor's product, the longer lasting product costs less than the competitor's product even it is priced 25% higher.  CEO's that understand pricing-to-value make their companies more money.  Any fool can sell a good product at the lowest price.  CEO's look for rainmakers that can sell a product based on its value, not on low price.

9. Not having a "President's New Product Pipeline."

It is the CEO's job to encourage constant innovation.  If the CEO  has a new product pipeline he or she will know what innovations-of all and any kind-are in the future.  The CEO will know who owns the innovation, when it will be launched, what it might be worth, what is the planned investment.  When the organization realizes that the CEO is minding the pipeline, the pipeline stays full.

10. Is not visible in tough times.

In tough times, such as a recession, a product recall, a horrible event, a government intervention, the great CEO is on the front lines, waving the company flag, exhorting the people to do things.  The great CEO explains the problem, provides an action plan, and let's the people execute.  The great CEO beats the rumor mill, gives facts, answers any question without malice.  The invisible CEO creates an environment of speculation, fear, uncertainty.  Good employees want to be led.  Great CEO's lead.