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Executive leaders hold a unique position which combines authority with responsibility and accountability. They have the authority to make key decisions and set the company vision and strategy, but with this privilege comes the ultimate accountability for results, including culture, people, execution and financial. In other words, the buck stops with the executive leadership for all aspects of the company’s successes and failures.  

How does one become an executive leader? Among the people I have come across during my career, some with whom I worked closely, and some that I met through professional interactions, most learned on the job, working up the ladder from an individual contributor, to manager, director and then vice president or higher.

I followed a non-traditional path to becoming a CEO. I started out as a physicist, earning my physics Ph.D. from Berkeley, followed by two postdocs in France and at Caltech, before making a career switch to business when I joined McKinsey & Co. During my McKinsey experience, I learned a lot of useful theory and frameworks that taught me how to solve business problems, an experience for which I feel very fortunate. However it was my years in different physics labs where I really learned problem-solving, trying to get my experiments to work and to understand the science behind them.  

I joined my first startup after McKinsey as a Senior Director of Strategy and Business Development, reporting to the CEO. I thus skipped the usual path through the manager to director roles, which also meant I did not have the time to properly learn the necessary skills for those roles. I was promoted to VP and later to SVP and to CTO rather quickly, running a fast-growing engineering and product team, all while at my first startup. I made many mistakes during this period, such as not knowing how to delegate, not spending enough quality time on important strategic matters, instead devoting most of my energy on urgent tasks. It was mostly through trial and error that I learned many of the lessons that proved invaluable to my evolution into a business leader. 

As a CEO, one of the most important parts of the job is to coach and develop your talented people. I have been thinking a lot about how to help someone make the transition from a manager or director to an executive role. Reflecting back on my own journey and thinking how I could have learned the necessary skills in a faster or easier way, I decided to write this blog to share my thoughts.  

I think these 7 skills are essential to become a great executive:

1. Vision 
2. Strategy and planning
3. Communications 
4. Practical problem solving
5. People leadership
6. Number mastery
7. Wisdom

1. Vision

As an executive leader, you are responsible for coming up with the vision for your department and for the company. This does not mean that you yourself need to know everything to come up with a vision. It does however mean that you must recognize the need to develop a long-term vision for your department and company. A vision is the north star towards which your people will work. Without a clear vision, people won’t know why we do what we do, and will have trouble prioritizing among various initiatives. I believe that every great executive leader knows how important it is to develop a vision, and will work with their team to come up with that vision.

A vision is an aspirational goal, a living thing, as market, competition and technology change over time. A vision does not have to be quantitative. It is important to recognize that a vision is not just a project, that once formed it can be put aside. Rather, we need to revisit our vision on a regular basis, to make it more crisp, whether any tweaks are needed, or even to consider whether dramatic changes are needed. A great executive always has their vision in the back of his/her mind. A great executive can articulate their vision in a relatable, tangible way to their teams.

When I think about my vision, I ask myself where I want to see the company in 5 years, in terms of types of products and services, number and types of customers, how we delight the customers, and how our staff feel about the company. I try to think about the emotions the vision will evoke in people both inside and outside the company.

As someone tasked with company strategy at my first startup, I developed the company’s initial vision and strategy, working closely with the CEO and other team members. However, as the market changed quickly, I did not spend quality time to think through the changes we needed to make in response, and whether or not those changes were the right ones. Instead, I spent most of my energy on completing tactical and technical tasks. This first startup was a success, but not a great one. Reflecting back, I learned the lesson that I have to make sure I spend quality time on important matters, not fill nearly all my waking hours with urgent matters. This takes discipline. This requires a habit change. This lesson has served me well in my subsequent roles.

2. Strategy and Strategic Planning

As leaders, once we have a clear vision, we need to figure out how to achieve the vision (near-term and longer term), what initiatives we need to start, what goals we need to set, the people we need, the systems and processes we need to put in place, etc.. We then have to develop a timeline for when we can aim to accomplish that vision, and with what resources. The outcome of this process is the strategic plan, the annual budget and planning, the quarterly goals and hiring needs. This process is often referred to as strategic planning, which can happen once a year or as needed. An executive leader sees the need to do this, and knows how to get the team together to develop their strategic plan.

Strategic planning starts with the clear understanding of, and alignment on, the vision. There are different methods people use to develop a strategy and do strategic planning. SWOT (strength, weakness, opportunity, threat) analysis is one such method. SCP (Structure, Competition, and Performance) analysis provides another framework for developing a strategy. No matter what method one uses, it is important to develop the strategy and the strategic plan by examining external forces, such as industry trends, competition, emerging technologies, and business models. In such an analysis, it is important to understand the total addressable market, the market share and the financial performance of various players in the industry, as well as the goals we want to set in the near term to ultimately enable us to achieve our vision. 

When I work on strategy, I try to step back and think about the key milestones or wins needed to achieve my company’s vision. Once the key milestones are nailed down, the rest of the planning is much easier to work through.

3. Communications

Communication skills are critical to how effective a leader is. Communication includes how you communicate to teams reporting to you, to your peers, to users in the community, to everyone in the company outside of your functional area, to your boss or bosses, etc. It includes both verbal and written formats. To be good at communication requires us to have great self awareness, great empathy for others, to really know and understand the audience, and to have high emotional intelligence to know how best to communicate a message to the audience. For me, with my scientist’s training, this has always been a weak area. By default, I think logically, using numbers, formulas, and causal relationships. While those are good, communication is much more than that: Communication is about inspiring, motivating, and influencing, creating emotional connections with people. To achieve that requires one to really know the state of mind of the people you are communicating with.

Over the years I have learned some useful techniques. I believe in starting with the “why”, such as starting with the mission and vision of the company. I practice transparency, for both good and bad news. I embrace authenticity in communication styles. For big or possibly controversial topics, I socialize with key stakeholders before proposing them formally. I believe in active listening, although I am still learning how to be a good active listener. I believe in keeping in touch with front-line contributors, as knowing how they think and feel is critically important, providing a leader with the “vibes” of the company.  

I once worked with a communications coach who told me that when it comes to communication, 5% is what you say and 95% is how you say it. At the time, I did not believe this. Now I recognize that the way we communicate, how we pick the moment, the words, the charts and analysis, the setting and sequence of events, all are important elements that require intentional thinking to achieve the desired outcome. Whenever I try to shortcut a communication, I always have a less-than-desired outcome. When it comes to communications of important topics, often you achieve more by slowing down, thinking through all the important communications steps.

4. Problem Solving

Leaders are bombarded with various situations that require fast actions and fast decisions, often without sufficient time or resources for in-depth analysis. To be an effective leader, it is important to have strong practical problem-solving skills. I want to emphasize practicality here, because it is much easier to come up with solutions in ideal situations. But in a fast-growing company, it is rare to have an ideal situation.  

A great leader always has the company vision and strategy in mind, together with the key drivers of the business. Understanding the key drivers requires a good understanding of the business. With this understanding, a good leader can easily prioritize when faced with a critical decision. I am a big believer in understanding the business via key metrics, making decisions using data, solving problems by developing clear hypotheses, and relentlessly applying the 80/20 rule, which is part of being a practical problem solver. When we make a decision, we must also be clear what are the success metrics for this decision. By watching these success metrics, we can quickly evaluate (“fail fast”) if the decision was wrong. Even when making small decisions, thinking about the why and the what makes prioritizing the tasks much more straightforward.

My physics training has given me an excellent basis for problem-solving. I learned to always have a hypothesis before embarking on any actions. I am also used to testing my hypothesis with analysis when data is available, an analysis that can quickly tell you if your hypothesis is correct. Only when those means are exhausted, then I like to test and then scale.

5. People Leadership

People leadership is not about how charismatic you are as a leader. Great leaders can be introverted or extroverted, they can be great public speakers or not. But great leaders must really care about the growth, success and happiness of his or her team members. Being good at, and enjoying the role of, attracting, developing, and truly caring about your people is a core element of people leadership.

I think the most crucial part of people leadership lies in building trust with your team. If you can build real trust, many things will follow. But if you don’t have the trust of your team, you can apply various techniques, and they may work for a while superficially at best. Trust is a key to people leadership. I believe vulnerability is key to building trust. This is my first CEO job. My CEO style is to have the courage to be authentic and vulnerable, which has served me well. When we are vulnerable with our people, we show them that we are also human. It helps our team relate to us, which in turn makes people feel comfortable opening up to us with their thoughts and feelings. This is how trust is developed. I highly recommend being vulnerable and authentic as a leadership style.

Once you have developed trust with your team, there are areas of leadership that are helpful to be aware of, such as how you empower your team, how you can have effective career-path discussions, how to provide constructive feedback and make it a regular part of your 1:1s. Such discussion should not only occur during annual reviews. These discussions involve both giving your people feedback and soliciting feedback from them. When you genuinely care about your team members’ growth, success and happiness, these discussions will take place naturally.

6. Number Mastery

As our responsibilities grow and the people and teams we lead grow in size, we cannot rely on meetings or ad hoc conversations to know how things are going. We need to rely on metrics and data to be able to quickly assess the state of the company and the business. This is why being proficient with numbers, including metrics, company financials, and industry trends, is a critical skill for any executive leader.

Being proficient with numbers and metrics does not mean you should have lots of dashboards and reports. My analogy is to the captain of a ship and the dials next to the steering wheel on the ship. Those dials and the compass tell if the ship is functioning well, if the engine is running smoothly, and if you are heading in the right direction. You don't need to go to the engine room to know the engine is okay, and you only need to ask your engineer when the engine dials indicate trouble. When you run a company, it is important to develop a set of metrics that are like the dials next to the steering wheel. Personally, I like to have about a dozen key company metrics that tell me the health of the business. I like to know those by heart, and know the key drivers of each of those metrics. If one metric is not normal, I immediately know the questions to ask to pinpoint the problems. When something bad happens and I do not see any warning signs, it tells me that I missed a dial; I then add a new metric to my dashboard.

A common mistake I have seen people make with reports, KPIs and metrics is that they develop so many that they cannot keep track of the relevant ones. All reports are treated as equally important, which also means that none is important. I like to have a few dashboards that are updated daily, such as a company revenue report for an e-commerce company. I like to see weekly KPI reports, that go beyond financials, that tell me how things are operationally, across all key functional areas, starting with customer success and support, to engineering and product development. Of course, there are monthly and quarterly reports one must also review, often dictated by various reporting requirements. To me, the most important ones are the reports and metrics that relate to the key drivers of the business.

Another aspect of number mastery is to develop the ability to do quick and dirty analysis of various situations. In physics, before we think of doing an experiment, we develop a hypothesis and then do a quick back-of-the envelope calculation. This is an invaluable skill. In business, this is not a common approach; I however find it extremely helpful. If you know a few key facts, and a few key metrics, you will be amazed at how quickly you can estimate things, which can also empower you to quickly size up problems and opportunities. This is another way to apply the 80/20 rule.

I worked at six different companies following my time at McKinsey, before I became a CEO. Each time, I had to quickly learn a new industry, new products, and develop the relevant metrics and dashboards so I knew how to look at the business. I learned to step back, ask questions, ask why, why and why, and thus develop for each business the relevant insights, drivers, and key metrics. 

Besides KPIs and operational metrics of each of your functional areas, I believe every great executive leader needs to learn some corporate finance, to know how to read financial statements, how to assess a company’s financial performance via various margins, ratios, and useful benchmarks, relevant to the industry or the type of business. For example, for a SaaS business, LTV (Lifetime Value), $ and number retention, customer acquisition cost, etc., all are key benchmark metrics. It is extremely important that every executive leader in a company knows what the relevant metrics are, and how operations and decisions impact those metrics at the company level.

7. Wisdom

Wisdom is the cumulative set of insights one gains over the years, earned through many mistakes and some successes. I remember my early years in physics, where I simply did what I was told, and learned the hard way what worked and what did not, as what I was told did not always work. Through many failures, I learned how to design a panel to monitor all the pressures at the appropriate parts of my system, what kind of flux to use when soldering stainless steel, and how careful I had to be to avoid introducing problems down the line. I learned that things don’t always work, that you need to design things so you can diagnose problems easily and quickly. These physics lessons proved almost exactly identical to what was needed to successfully run a business.

Take each opportunity, each failure, each situation that did not work the way you planned, as a learning opportunity, an opportunity to ask what you could have done differently to achieve a better outcome. If you develop a habit of doing this, and keep on experimenting, over time you will develop an instinct for what is easy to do, what is likely to work, and what feels right. This wisdom comes from paying attention to details, having an open mind to learn and experiment, questioning constantly, reflecting, digesting, synthesizing, and capturing the learning. One danger with wisdom is that we become so confident in our wisdom that we stop being open-minded and become unwilling to try new ideas, things, or approaches. I constantly remind myself to remain open-minded, but I know I can come across as not being open minded enough at times.

Reflecting back on my journey to becoming an executive leader, I came to my list of 7 essential skills that are critical to master for a leader to succeed:

1. Vision 
2. Strategy and planning
3. Communications 
4. Practical problem solving
5. People leadership
6. Number mastery
7. Wisdom

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Share 110 7 Comments Sven Klein 4y

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Thanks, ning wang. I keep learning from you, which I very much appreciate. Being a CEO is a difficult job, but one that I wouldn't trade for any other job. Please ping me next time in you are in SB. I would love to get together for lunch. Sven

Like Reply 1 Reaction 2 Reactions Sudip Dawadi 4y

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Your thoughts are spot on !! Completely agreed with each of your points.

Like Reply 1 Reaction M R Farabee 4y

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Inspiring...!!

Like Reply 1 Reaction Luis V. 4y

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Good reminder for the execs ning wang, as a subset of your 1st Vision item, if I may, would like to add that hiring "talented people" will facilitate the success, you can try hard to communicate and motivate your team, if they are not "talented" (and as my former boss used to say crucial for the company growth) great results won't be achieved. Thank you for posting. Good reminder

Like Reply 1 Reaction Amaya Becvar Weddle, Ph.D. 4y

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Agree, very much appreciate these points and the candor in your reflections.

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