With the fast-paced nature of today’s professional environment, business executives are faced with more challenges and difficult decisions than ever before.
Not only are they responsible for managing their company and the bottom line, they also have to effectively navigate relationships with their employees, customers and external stakeholders.
Andy Cohen, faculty director of the Daniels Executive MBA and a professor in the Department of Management, is a longtime executive leadership coach and educator. He’s seen the shifting tides of the business world and acknowledges that business executives have a lot on their plates. He also thinks it’s important to frame what exactly an executive is, versus other leadership roles.
“The difference between executive and manager is how broad your purview is,” he said, adding that executives oversee a variety of different business areas.
Four Key Components of a Business Executive
Cohen boils down the key components of a business executive into four specific buckets, each with varying scope and purpose. When building a leader, Cohen said you’re combining a level of leadership with a strong grasp of these four areas.
Set vision, mission and strategy
Strong business executives have an ability to read what’s going on in the world and set a path forward. Ultimately, Cohen said, they’re answering the question of: “Where are we going?” Business executives can gain this information by looking externally and reading the current business climate, or they can lean on their managers.
“Sometimes a great leader or great business executive is great because they gain access to the people who can” interpret external forces, he said.
Strategize and align resources
Whether it’s financial resources, human capital, physical assets, partnerships or stakeholders, business executives are responsible for organizing key resources.
“A good executive or leader sees an opportunity or threat, has a stance on where they’re going to play, and develops the organizational plan to go after it,” Cohen said.
Once business executives decide on the direction of the company, the next step is to motivate their employees to get the job done. Cohen said this can be challenging, as leaders have to share their message to both the larger group of employees and to individual people.
“Something more difficult about leadership over time is we now understand that the more we customize that approach the better we’re going to be,” he said.
For years, Cohen said the three previous components were all he taught in his classroom and to his clients. Now, he’s added a fourth crucial lesson to business executives.
Take care of disparate stakeholders
Cohen said past business executives didn’t consider various stakeholders a key part of their job, focusing primarily on the shareholders and then their employees. But there are more important players in the game of business.
“Start with the customer, go to the shareholder and then very quickly to the employees,” Cohen said. “Then, I can add everybody else, governments, joint venture partners, outside communities, suppliers.”
When it comes to community impact, Cohen said modern business executives need to realize the impact they can have with a few intentional choices.
“I think a growing and big part of being a good executive and leader is recognizing that you and your organization have a tremendous impact on the ecosystem in which you operate,” he said.
Key skills to have as a business executive
While the four lessons above are crucial to executives, Cohen said the best leaders aren’t always experts in each of these fields. Instead, they recognize their weaknesses and know when to lean on other leaders in the organization.
“You can’t be terrible at anything, you just don’t need to be great at that many things,” Cohen said. He added that there is a minimum knowledge necessary of all business aspects for executives and that they should possess the ability to perform integrated problem solving.
Strong business executives should also balance a supportive environment for their employees with an underlying questioning spirit.
“I think one of the great arts of leadership is knowing when you don’t know something and differing to your executive, but also being willing to dive in when you’re not getting the answers you think you should be getting,” Cohen said.
Do business executives need to be extroverted?
While transformational leaders that can captivate a crowd on stage are popular in the media, Cohen said this isn’t a required skill for business executives. Instead, he said it’s important to have good listening and conversation skills, which are important for problem solving. And, if you can engage an audience on stage, that’s a bonus.
The other key interpersonal skill for business executives is a high emotional intelligence. They can sense how their employees are feeling and help guide them in a positive direction, often pushing them further than they realize they can go.
“Great leaders are in the business of helping people expand the boundaries of their comfort zone,” he said.
How to become a business executive
Cohen said the best part of being a business executive is also perhaps the most challenging part, you can’t ever stop learning to lead.
“The double-edged sword about leadership is that it is a lifelong education journey,” he said.
There are a variety of paths through that learning adventure. On one end of the spectrum, Cohen mentioned finding great mentors and building a personal board of advisors that you can lean on. It may also lead you to pursue something as significant as a new degree, like the Executive MBA program at Daniels. In the Executive MBA, you’ll learn critical business skills and take on the complex, evolving issues leaders face in today’s business environment.
“As a leader you do have to be in a constant self-development posture,” Cohen said.