If you're a JV CEO, you have a series of interactions with your owners across the course of the year. Some are planned and formal –regular board and committee meetings, for instance. Others are informal – e-mails, one-off phone calls, and visits – to address specific issues or generally catch-up.
In most joint ventures, there is one meeting a year in which the CEO has the opportunity for a more strategic conversation with his or her owners – a chance to step back from the quarterly quizzing on financial and operating performance, and the press of recurring topics such as annual budgeting and compensation, to talk about and secure owner commitment on larger, more strategic issues that can fundamentally change the JV’s direction and performance.
We call this the critical conversation.
Critical conversations are challenging. Our data shows 53% of JV CEOs struggle to secure alignment on a long-term strategy and evolution path for their venture, and 72% experience real difficulty in aligning their owners and board on the JV’s medium-term plan. And more than 70% of JV CEOs stay in the role for three years or less – often because they struggle with these critical conversations, and fail to meaningfully drive the business forward.