The role of a CEO
An insight into the problems of a larger than life chief executive officer
Often, the social construct of leadership is viewed as a myth; a myth that functions to reinforce existing social beliefs and structures about the necessity of hierarchy and leaders in organisations. Does that mean charismatic and transformational leadership styles are also farce? Researchers have a tendency to theorise the characteristics, personality traits and success rates of these leaders; however, issues such as routinisation of this charisma or loss of transformational abilities are hardly discussed.
In this article, I wish to describe some of the issues, challenges rather that these ‘larger than life’ leaders face. My job is a slightly difficult one because most authors and studies in this field indicate the ‘emergence’ of this ‘larger than life’ organisational leader; very few talk about the ‘sustenance’ of this entity. Well, I can see several challenges (or ‘problems’ as the title says) that this ‘larger than life’ CEO might face during his professional tenure. The toughest challenge for this CEO would be attribution — almost like old times, where all things unexplained had only one answer — God. So following situations are very much possible: 26 per cent dip in the last quarter results; 13 per cent attrition amongst the top management cadre; despite all efforts billion dollar contract goes to XYZ competitor; corporate accounting fraud — who’s responsible for all this? One man — the CEO; wasn’t he supposed to be ‘larger than life’? People are prone to make this CEO responsible for all events and all situations (however extreme they might be). This kind of attribution is one of our CEO’s biggest problems. Often such leadership is dependent on the situation at hand and not personal traits. But, the ‘larger than life’ status makes him vulnerable and answerable — for everything! As a consequence, what becomes more important for the CEO is to be ‘seen’ as ‘larger than life’ rather than have those actual accomplishments. The flipside here is that this appearance might leave some results-driven CEOs rather dissatisfied. Also, this appearance might set a bad example for the subordinates. Thus, we see that CEOs have to share the blame of anything and everything that goes wrong in their organisations. Without exception, they have to answer all questions raised. A bigger challenge is to manage environmental dynamics, regulatory changes and scarce resources and yet remain ‘larger than life’.
Another very pressing problem for this CEO in today’s globalised world is cultural differences. What might work for a ‘larger than life’ leader in the United States may not work for her in India — social ties are different, perceptions of an ideal and effective leader are different and more importantly, definition of ‘larger than life’ itself is different. So, we see that whether others see you as charismatic and transformational may, in part, depend on what culture you work in. This might mean adjustment for the CEO which by the conventional definition of ‘larger than life’ should not be a very big challenge. However, the ease of this adjustment is a function of the difference in culture, the tenure that the CEO has for this adjustment and the abilities of his followers.
Some researchers have highlighted the importance of passive leadership. Performance, as we know, is a function of ability, willingness and opportunity. A leader’s (the CEO’s in the case of an organisation) role can be directive, participative, supportive and/or achievement oriented on the basis of these three determinants of performance. For example, for unable and unwilling employees (an extreme case), the CEO’s task is to give directions; for employees who have the ability but lack the will to perform, the CEO is expected to be supportive and so on and so forth. Passive leadership is expected from a CEO when his employees are able, willing and have the right opportunity to perform. Such a scenario behaves like a neutraliser for the competence of the ‘larger than life’ CEO. In short, another challenge that this CEO faces is a threat of substitution, as author Michael Porter might want to term it. Often ‘larger than life’ leadership may be over-compensating in nature. Examples of similar challenges that a CEO might face — experienced and well trained employees, employees with ‘professional’ orientation or indifference towards organisational rewards; organisational characteristics such as explicit, formalised goals, rigid rules and procedures, and cohesive work groups — all these have the capacity to replace formal leadership and hence a potential problem for a ‘larger than life’ CEO.
A ‘larger than life’ CEO will always have to toil with options; there will always be trade-offs in front of an effective leader. For example, a natural extension of the above logic then is how does the CEO mentor these seemingly ‘larger than life’ employees? This is where issues of succession planning become very important. One of these trade-offs is how much to mentor; the concept of authentic leadership expects the leader to be ethical and trustworthy. Therefore, another challenge for a ‘larger than life’ CEO is to bypass self-interests and reduce dependence of the employees and the organisation as such on him. Identifying and mentoring the next CEO or the next level of hierarchy is very critical for a CEO and often a very big challenge. It is very natural for such CEOs to have their ‘own’ people as first in command such that their word is never countered. Another trade-off is whether to serve own or an organisation’s interests or how to strike a balance at best. It is often very difficult for ‘larger than life’ CEOs to act in the best interest of their respective organisations and there is a tendency to overstep in order to achieve their personal goals. Also, a CEO also has to rightfully disseminate information to his employees — both too much and too little can pose serious problems in administration.
Finally, can a ‘larger than life’ CEO adopt a one-size-fits-all technique to manage his followers? Every action of a CEO has an impact on all the stakeholders of the organisation. For instance, often gain sharing in organisations is a zero sum game between the shareholders, the organisation and the employees. Also, corporate social responsibility is a buzz word for most parts of the world. Therefore, a big challenge that any CEO faces is the division of this pie such that all stakeholders are happy but isn’t that an impossible path to tread on?