Is the modern CEO a feudal lord of the manor?

I often hear stories of CEOs losing their temper and angrily dressing down an employee in public. This is, plainly put, bullying and, when threats are used, it is unconscionable behaviour. The CEO has the power and ability to punish; the unfortunate employee has little recourse other than to resign – which could be a highly costly action in terms of the company’s reputation and money.

With the absolute power they yield, CEOs have become a quasi-replacement for the “feudal lords of the manor” and all too often many treat their staff like serfs. In doing so, it becomes obvious that they care nothing for their employees and lack the understanding of and adherence to a disciplined craft of management.

These senior leaders are ignorant of the impact of their actions or even worse, are satisfied that a threatened and unsettled workforce is apparently a productive one. This type of CEO surrounds themselves with sycophants who enable their dysfunctional behaviour. These toadies literally “tug their forelock” in obeisance to their boss like the farm labourers did of old when “M’Lord” met them on the estate.

The estate is now The Company.

Imagine a strong-minded, “my way or the highway” CEO, propped up with a group of direct reports with considerable non-vested share holdings. You have here a recipe for serfdom-like passiveness. Who wants to rock the boat if it compromises a big payout day? Direct reports will take a lot of abuse for a more secure future when stock vests.

Staff are cautious around such a CEO, especially if he or she has a history of emotional histrionics. They are careful to offer only sanitized best advice; they will say what they think the CEO wants to hear. Even worse, if there are uncomfortable truths that should be mentioned, these will get swept under the rug or even altered substantially to avoid a confrontation with the CEO.

As I wrote in last week’s blog, management is the preeminent profession of 21st century. At the top of the corporate pyramid are the CEOs, those individuals who expected to represent management in its best light. But because of a lack of adherence to a craft of CEO management, one that is transparent to today’s society, CEOs are not held to account for their behaviour. The feudal system still reigns.

Management versus Leadership: Does Anyone Care?

Recently I attended a business dinner with a group of senior executives and the subject of what is the difference between "leadership" and "management" came up. Despite an energized discussion, by the end of the evening we had not arrived at a common agreement.

To me, this demonstrates that the profession of management is in trouble. Actually, management is not even seen as a profession... and it should be!

Look around you where you are sitting reading this blog. Nothing in the room you are in was not touched at some point in its creation by a manager. The chair in which you sit, the building that shelters you, the coffee you drink - all came about thanks to processes and people being managed. Our society depends on managers, and management is the pre-eminent profession of the 21st century. Yet it has no coherent unified body of practices, discipline and processes, unlike, for example, the accounting and legal professions.

Why is that?

The sad truth is that anybody can become a manager, and there are few consequences if one mucks it up. Managerial philosophy, values and practices are inconsistent. Oh unfortunate employees!

What we need to do is to treat management as a craft. What's a craft? A craft is the lifelong pursuit of mastery of a body of knowledge. Practitioners of the craft of management would be expected to follow common principles, rules and standards of engagement.

If all this was in place, my colleagues and I would not have spent the evening arguing about the differences in meaning between leadership and management. We would know. Our profession would be defined by precedent and practice.

I believe companies would be very much better managed and employees would be more productive if management would be recognized as a profession. Everyone would benefit from increased respect, consistency, and clarity of expectations. And their managers would be held accountable to practice their craft in a clearly delineated manner to set standards.

Why do companies appoint co-CEOs or co-Presidents?

Barrick Gold has recently appointed two Presidents. To me, this is a "kiss of death" decision.

Co-Presidents and co-CEOs immediately transform a chair of the board into an operating chairperson. The chair now becomes the cross-over manager, the manager who is called into play when conflict exists between the two people at the top. This compromises the chair. Whom will he or she support?

Having co-CEOs and/or co-Presidents immediately exacerbates the question of who is accountable for what. Nothing in the structure is clean any longer; often there is inadequate delineation of roles. Employees are subject to consternation and dithering.

Inevitably, the executive team will be bifurcated. One side will align with one CEO (or President), another side with the other.

I often hear the rebuttal that having co-CEOs does work. They will be collegial and collaborative, I'm told. It might work for a start-up, but as an organization grows it becomes much more complex to manage. Having two people at the top presupposes "good chemistry"!

This was the challenge for RIM where they grew exponentially to achieve sales of almost $20 billion in 2011. In RIM's case, having co-CEOs killed its ability to respond swiftly to competitive challenges and shut down the type of thinking required to solve threats or take advantage of sudden opportunities.

Now Barrick has gone the same way. What game is this company's chairman playing, pulling decision-making higher in the organization? It can only cause employees huge angst and pressure to prepare and sell ideas at the board level. I believe you have the potential for a real mess.

All employees crave consistency and clarity in their work; all employees require discretion and authority to carry out their accountabilities. A structure with co-Presidents and co-CEOs at the top will not provide what employees want and need to do their best work.

Who's accountable for the strategy?

This past weekend I attended the GO Conference in New York. Much of the discussion one day centered on the importance of CEOs being able to create a viable long-term strategy for their company. 

It is something I don't think many CEOs do that well; in fact, many have the audacity to outsource this work to consulting firms. In doing that, they don't seem realize they are abdicating one of their key accountabilities: the creation of the strategy.

Presumably their Board hired them for a fair wage (society would probably say a princely sum). The Board felt they had the capability to think through, unravel and master the complexity and competitive dangers facing their company with the required strategy... but no, some CEOS will avoid one of the more exciting and delicious pieces of work a CEO does. And I did say delicious!  If the CEO is well matched and capable of doing the role he or she should love the challenge of doing strategy work.

One of my favorite stories is how a client of mine, a CEO, went about creating a strategy for his company. He had been engaged in a turnaround situation in an industry he was reasonably familiar with. He went ahead and hired a global consulting firm to help him with his strategy development with the following proviso and instructions. 

"Look," he said, "I and my executive team are going to do the interesting (and delicious) work of creating our strategy. We want you to do some of the legwork for us and carry out the research part of things and get me the specific data I want. We will then take that data and create the strategy. To be clear: I do not want you to recommend a strategy. Got it?"

Off they went. When they returned to present the data they also presented a strategy to him. He fired them on the spot! The strategy creation was his accountability and he wanted no interference from outside. His team had to be excited and value the work of strategy creation. The people on his executive team were capable and in the right roles. By creating the plan themselves, it made it their work. Implementing the plan had a much higher chance of success than a plan devised and presented to them by strangers.

Needless to say, the strategy the team created (and lead by their CEO) was a game-changer in their industry and was implemented with huge success.