Performance reviews for CEOs
Not surprisingly the above statement was written by a CEO.
I picked up on an article where the CEO of Zillow, Spencer Rascoff, wrote about his recent performance review.
It is a common challenge for MDs and CEOs of small companies to figure out how their performance can be meaningfully reviewed. All their staff go through the review process, why not the CEOs and managing directors?
In many owner managed companies, with casual board structures, there is no formal review of the performance of a MD / CEO. They might ask “Who can do my Review? Will they be objective?” And even question “Will my sense of self-worth be challenged – and what happens if I get a poor review?”
Frequently with Celtar clients, a relationship has been built where an MD reflects on their own performance and looks for feedback from myself as a personal business adviser.
Care must be taken in offering constructive feedback which I ensure is evidence based. Positive recognition is given for goals achieved, business objectives met and leadership demonstrated. I often utilise the DCOM model for High Performance Teams for headings of discussion points (Direction, Competence, Opportunity and Motivation). In many cases this conversation is the only occasion when an MD is given feedback, and told that he or she is doing a “good job”!
Back to Zillow.
Each employee – including the CEO – is rated on their performance as well as their demonstration of the core values. They do 360-degree reviews, meaning managers are reviewed by their direct reports in addition to their peers and their line managers. They also prepare a self-evaluation and compare it to what others have to say.
This is absolutely true.
“A good review should contain no surprises if your manager is providing real-time feedback throughout the year. Instead of just hashing out what went well and what didn’t, a good review should include a thorough discussion on the specifics of your career development and progression. There is always opportunity for growth, even if it doesn’t mean a promotion.”
Feedback for the Zillow CEO is compiled from a mix of direct reports and other employees, the two co-founders, board of directors, from employee reviews on Glassdoor and from their conversations with our shareholders and business partners.
His review went well. The board reported that they (and others) think he is doing a good job as CEO. But in the spirit of “turning on the lights” – a core value at Zillow Group – a few areas for improvement were identified:
- Keep meetings with the senior leadership team sacrosanct: As business grows, it’s increasingly harder for his direct reports to stay coordinated with each other [or with him?] He says, “ I’ve heard from this group that we need more frequent, regular communication to keep ourselves swimming in the same direction. “
- Delegate more: need to continue to identify places for his direct reports to step up and have autonomy so he can focus on the bigger, longer-term opportunities for the business.
- Book quiet time for himself: need to find quiet time – time to think – when not in meetings. He finds it incredibly difficult to keep any unscheduled time on his calendar. Scheduling the entire day leaves no time for creative thinking. To address this, his plan is to keep a list of five things that matter most to the business, and to focus on those things.
- When you’re the CEO, everything you say has more weight. Spencer says “I need to make sure I clarify when something is a question, a comment or a directive so people interpret my feedback, opinions and decisions as I intended.”
Business leaders are self-centred and the successful ones highly focused, it is useful for them to be given/receive objective feedback on a regular basis.
For more about Zillow check out www.zillow.com
For more about evaluating CEO performance http://www.forbes.com/sites/joeltrammell/2013/08/18/how-do-you-evaluate-ceo-performance-6-ways-to-grade-the-chief/#510437f841da
Billy Linehan business advice Dublin Ireland