Managing the CEO

Performance Management at the CEO level is a tricky affair and most organisations do not handle it well. Invariably, the performance of the CEO is equated with the performance of the company which to an extent is understandable. What gets ignored is that the CEO is only one of the several factors affecting the overall performance and not its sole determinant. There are many other variables including the Owners/Board members themselves. However in their deliberations, one often gets the impression that almost everything can be attributed to the CEO particularly when it comes to diagnosing failures. In such situations it is very rare to find Owners/Board members who are willing to look at their own contribution to the failure except to the extent of having chosen the wrong CEO.

Some time back, I was witness to an “informal “chat amongst owners/board members of a company about their disappointment with the performance of the CEO. At some stage I asked them if they had tried to look at the situation from the CEO’s point of view. First my question was ignored and then I was told “we  gave him a long rope but he failed to deliver and whenever we try  to give him feed back, he becomes defensive and only offers lame excuses”. I could not explain to them that “giving feed-back” is not the same as “listening to some one” nor could I make them see that what they considered as “long rope” may not have been experienced as such by the CEO. When I tried to point out some of the genuine difficulties that he may be facing, I was told that ” he is the CEO and it is his job to solve these problems”

The experience left me with an uneasy feeling that perhaps they had no clue about what may have been going inside the CEO -his difficulties, dilemmas, vulnerabilities, self-doubts etc. The expectation seemed to be that he should have no such “angularities” and should not need any “emotional support”. So long as the performance parameters are clear, fair and mutually agreed upon, he must either “perform” or “perish”. Thus it is hardly surprising that all such situations create a stalemate and get settled only after the ties are severed. It is another matter that in many such situations, difficulties persist even after the CEO is replaced with a new incumbent, because the underlying issues are not addressed.

The difficulty of “listening” to some one who is lower than us in power/status hierarchy is fairly common in all spheres of life and at all levels. What makes it particularly problematic at the top level are the following factors-

  1. At lower levels it is generally easier to separate the parties concerned by shifting them to new positions. This is virtually impossible in case of a CEO except in case of conglomerates. Even here the people concerned remain more or less the same and the dynamics does not change appreciably.
  2. At lower levels, the individuals concerned have other people (friends, colleagues etc) to talk to. Such sharing is a cathartic release and also provides an opportunity for the individual to reflect upon his /her own stances/behaviour. This is virtually impossible in case of a CEO where any hint of trouble between Owners/Board and CEO can have disastrous consequences.
  3. At lower levels, there is a possibility of a third party intervention(HR, Mentor, other senior colleagues etc) In case of a CEO this third party can only be an external consultant who is likely to be (or at least perceived as ) an accomplice of the Owners/Board.
  4. Most importantly, in case of CEOs the people concerned on both sides have successful track records and are generally accustomed to being “listened to” rather than “listening themselves”. Consequently any difference of opinion between them becomes extremely difficult to handle. Also appearing self confident and being “on top of the situation” is almost a second nature to them. Hence displaying any doubts, confusions, vulnerabilities is a strict No-No. The end result is that what gets transacted is only the tip of the ice-berg and the real issues remain unaddressed.

None of these difficulties are unsurmountable. In fact, the answer is ridiculously simple-just to listen. This lack of listening is generally not deliberate and is often accompanied by a genuine desire to help and support. The only difficulty is that both sides remain entrenched in their respective beliefs and assumptions about the nature of the problem and what would constitute meaningful help and support. In absence of willingness/ability to review one’s own stances, no meaningful dialogue is possible.

In this sense, there is not much difference between what happens at the CEO level and what happens at other levels except that the consequences are a lot more disastrous at the top level.However in several other spheres of life (e.g. parent-child, social activists and their target groups etc.) the consequences can be equally disastrous. As the saying goes “helping without understanding is counter productive” but when it is also accompanied by differences in the relative power of the people concerned, it can become deadly.

 

 

 

 

3 thoughts on “Managing the CEO

  1. Dear Ashok,

    Thank you for writing this. I completely agree with you – that the position of a leader of an organisation or a group is expected to be invulnerable by others, and most often, this burden is internalised by the CEO themselves. I have encountered situations where, if the leader of the organisation expresses her/his confusion, vulnerability, inadequacy in front of her team members – particularly in front of outsiders, people in her team feel angry and dejected – and they have felt resentful towards that leader. I have also heard leaders in social organisations speak of their loneliness and not having anyone to talk to about their confusions, and when asked what keeps them from sharing the same with their colleagues – the response is usually (a) it will only create anxiety, fear and disillusionment in the team if I share my confusions and vulnerability with them (b) I will lose authority and control over them, they will no longer see me as someone confident and capable.

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  2. Your note on the Performance Management of CEOs raised my interest, Ashok, and I went through it eagerly. Having read it, I have a few other points to offer.

    1. Scapegoating & Persecution – Reading your post, I was immediately taken to the psychodynamics of scapegoating and persecution, and started wondering what kind of such processes may be in action in the way CEOs are treated when they fail or under deliver. I have also worked in organizations where I have seen these processes in some close proximity, and that experience is weighing in too.

    You may be quite right in the idea that at the level of the owners / BoD of an organization, the general experience / expectation is one of being listened to. Not just listened to but that one’s expectation of the CEO (and others, but particularly the CEO since they are in a way the “handpicked” ones) is met – be they explicit expectations or implicit expectations. In an owner-driven organization I first cut my work teeth in, a CEO was given the marching orders since he pushed back on some idiosyncratic impulsive decisions of the owner, AND the picture painted of the person was that he failed to deliver to expectations. This also brings up the idea of the narcissism of the owner. Narcissism where the grandiose self image is threatened by criticism or even just critique and immediate “retaliatory” action ensues.

    Coming to the process of scapegoating, and I quote here –“The social role of scapegoats in societies seems timeless. In early tribal cultures, a magical ritual was performed in which all the sins of the tribe were symbolically transferred into a goat. The goat was then killed or driven off into the wilderness, thereby generating a sense of purification and renewal among tribal members” (Taylor & Rey, 1953). The essential feature, of course, here is that the blame for the failings associated with the overall system are transferred to the scapegoat CEO. Thus the essential dysfunctions and destructive aspects of the rest of the organization and the owners/BoD get masked. It is interesting to note from your narration that the “being defensive and offering lame excuses” being attributed to the to-be-fired CEO can be said of the owners/BoD members themselves – they were doing exactly the same thing when you probed their decision process.

    2. I have a view about what I call as “specious solutions”. I have thought so far of three effects of specious solutions – ie so-called solutions that seem workable on the surface but often mask an inner hollowness. These are –

    • Solutions that create new problems. My conservative estimate is that 80% of organizational issues are addressed by this kind of solutions. Several years ago, companies used to park ageing and / or underperforming leaders in roles like “General Manager – Special Projects”, give them no role, and these “parked” persons end up trying various things to keep themselves busy and often ended up creating toxic cliques and coteries.
    • Solutions that exacerbate the original problem – Have employee engagement issues ? Rather than explore the underlying restlessness in the org, create fun committees, employ Chief Fun Officers, infantilize an already disillusioned workforce and drive them to cynicism – and further disengagement
    • Solutions that amputate the so-called problem – A recent trending example is the rush to do away with the “bell curve” system (I understand it is flawed, sure). I recently asked a senior HR leader of a company that had decided to (triumphantly announced) do away with the bell curve system as to why they were doing this, and his response was that several of their comparator companies were doing this and they had no response for their employees as to why they should continue when others were trashing it!

    So, getting rid of the CEO for the underperformance of the company maybe fitting in with at least of the specious solutions listed above.

    3. The Masculinity-bashers – I think I am meandering but I have one more point to make. Which is that it is easy to blame all these dysfunctional phenomena on the hypermasculinity of organizations. Masculinity-bashing feminist discourse can take us there. One of the most impactful masculine identities in my view is that of the Warrior. The Warrior attempts to do great things but he also owns up his doubts, dilemmas and struggles. And that is not necessarily being feminine, but being a masculine identity that simultaneously values the “accelerators effect” of dynamism, achievements and feats while tending to equally be in touch with the “braking effect” of doubts, dilemmas, and fears etc. So maybe the issue is not that organizations are excessively masculine, but perhaps they are inadequately masculine and whats worse – they don’t know it!

    Where does this all lead to ? I will continue thinking of this, but thank you – your post got me thinking and also has helped me both express AND clarify some of my thoughts …

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  3. Yes Kartik, many of the processes mentioned by you are quite rampant. They are also linked to the broader theme of “non-listening”. Listening threatens our sense of certainty and we need to protect ourselves against it. Take the example of Bell curve that you have mentioned. Some time back every one was “certain” about its benefits, today everyone seems to be “certain” of its ills. What you call inadequate masculinity, I call fragile masculinity. I also believe without sufficient integration of the feminine principle, masculinity will necessarily be fragile

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