Psychopathic CEOs? We Get What We Reward
While conducting research for an article I wrote for a UK business magazine on the high percentage of CEOs that seem to exhibit psychopathic behavior (think Martin Shkreli rather than Hannibal Lecter), I came across a new list. Actually, an old list whose criteria was recently revised: Harvard Business Review’s “The Best-Performing CEOs in the World.”
Prior to last year, CEOs were ranked by HBR solely on hard numbers: shareholder return and the change in the company’s market capitalization. In HBR’s view, those represented “a measure of enduring success.”
In other words, the sum total of CEOs’ “enduring success” as a leader boiled down to how much money their companies made.
In 2015 HBR saw the light. At least they recognized that financial metrics alone — especially so narrowly defined — didn’t speak to the many ways in which CEO value should be assessed. So out goes Jeff Bezos of Amazon, previously ranked #1, and in comes Lars Rebien Sørensen of Danish pharmaceutical company, Novo Nordisk.
You might not have heard of the “mild-mannered” Dane, but he turns out to be the antithesis of the aforementioned Shkreli. Rather than price gouging, Sørensen is so committed to corporate social responsibility that his company offers “insulin at a deep discount to consumers in developing countries.”
Time for a Change
Recently I attended an event to showcase the publication of Steve Case’s book The Third Wave: An entrepreneur’s vision of the future. He’s a former co-founder of AOL, the Internet’s first ever IPO and the top-performing stock of the 1990s. He defines the Third Wave as when the Internet no longer belongs only to Internet companies:
“The entrepreneurs of this era are going to challenge the biggest industries in the world, and those that most affect our daily lives. They will re-imagine our healthcare system and retool our education system. They will create products and services that make our food safer and our commute to work easier.”
In other words, the “new normal” is about to be overhauled once again and some of the “biggest industries in the world” are in for a big shock as a consequence.
As Case pointed out at the end of the panel discussion I listened to, when someone asked him what skills were needed to thrive — even survive — in this Third Wave, this will be a period when it won’t just be about whether you can code. Success will be predicated on whether you can partner. Collaborate effectively. Inspire trust. And build meaningful relationships.
It’s about people, stupid!
Because the incoming Third Wave will more closely resemble the First Wave than the Second (read the book: it’s extremely well written and very engaging!), the new playbook is one for which Partnerships, Policy, and Perseverance are paramount, just as they were during the time when companies like Cisco, IBM, Apple and AOL were “laying the foundation for the online world.”
All of which will require a very different type of leadership to come to the fore than perhaps we’ve seen in the past 15 years.
I think HBR is right on the button to broaden the perspective of what it means to be a “best-performing CEO.” Given the near-obsessive human desire for approval, popularity, and recognition (that’s what Facebook largely counts on, after all), a list that salutes the likes of Mr. Sørensen helps shift the focus away from CEOs who — metaphorically speaking — attended the Al “Chainsaw” Dunlap school of leadership. A former CEO whose words of wisdom include:
If you’re in business, you’re in business for one thing — to make money.
To create shareholder value, period.
Run a tight, money-making ship today and you can sail the world tomorrow.
Not in the Third Wave, buddy!
“The really great CEOs I know aren’t necessarily ones we hear about. They think in constructive ways, have respect for the people around them, they listen. Unfortunately, the ones we hear about most tend to be in the category we’re talking about right now: those with sociopathic, psychopathic or narcissistic behaviors. That gives them extra visibility and impact and in many cases those leaders make an effort to become very visible and attract the attention of the press. But the majority of businesspeople are simply not like that.”
So bravo to HBR for modifying their list’s criteria. Because hearing more about the likes of CEOs such as Lars Rebien Sørensen, who has a “deep engagement with social and environmental issues” and practices a “responsible policy on animal testing,” helps to remind us of that fact.