Cult of the CEO

We invent caricatures to tell truths. They are simplifications to be sure, but the very best ones reveal essential truths about subjects shrouded in complexities and bullshit. With a four year old and six year old holding the remote at my place, some of the best examples I have seen recently have been animated. In the wake of the Roger Sutton scandal, the example that comes to mind is one ‘Chester V’, the hyper-charged villain of a fairly run of the mill Pixar kids flick— ‘Cloudy with a Chance of Meatballs 2’. Chester is smart and dynamic, he runs a corporation with global reach, he is adored by followers world-wide who flock to his academy. He is the CEO as god, and in the end of course, it all goes horribly wrong.

I’ve seen it all in the real world too. Over ten years working for Finsec (the finance sector union) I saw many of them, and interacted with a couple, at New Zealand’s largest and most profitable enterprises. The experience was bizarre. I’ve had bosses, both good and bad, but the celebrity CEO’s of the finance sector were another thing altogether.

I remember watching mature men and women, experienced senior managers in the company themselves, fret and panic like imbeciles over the imminent drop-in of the CEO to a meeting. Was the room laid out appropriately? Did we have the protocol for who would say what and when settled? Was there a clock in the room? The last one was quite a serious matter. This particular master of the universe demanded that all meeting rooms across the vast organisation had a clock in order that his own admirable qualities of punctuality and respect for the time of others be inculcated across the whole business. On this occasion, of course, he was fifteen minutes late. Whispers in anticipation of the great man’s arrival created nervous twitching in the assembled ranks as these otherwise dignified men and women organised themselves to stand in a row and greet his eminence. Sweaty handshakes followed, some barely comprehensible corporate-babble too, much nodding, then he’d leave and we’d get on with things.

The experience, in different ways would be regularly replicated. The whole organisation would be bent to the will, personality, and peculiar ‘vision’ of the CEO of the moment. In the banking world it was often momentary too — New Zealand CEO’s are often Aussie execs being given a couple of years to prove themselves before heading back to Sydney or Melbourne and the next rung on the ladder. Smart people working strategically would have their professional lives upended on the grace and favour of the CEO. Systems and processes that had been crafted and developed over a period of time would be thrown out because of a recent brain wave. And of course, criticism, even behind closed doors was out of the question. There was no other word for it but — feudal.

The model of a lauded godhead at the top of the organisation always struck me as not just absurd, but also as dangerous. It’s barmy to assume that all of the knowledge required to succeed in a complex environment can reside within the well-coiffed head of an anointed individual. Time and again history and science tell us that while leadership at the apex is important, that wisdom and success derive from harnessing the skills, knowledge, and experience of the group. Yet under the celebrity-CEO model, all roads lead to the man (and it usually is) at the centre. Their personal brand and exploits come to define the organisation and dangerously large expectations are built up.

And of course, when one person is imbued with such power and prestige, others are axiomatically devalued — be it the hard working executives and managers who actually turn the wheels of the organisation, the modestly paid workers whose expendability and low-value is re-enforced by the gap between their wages and that of CEO, or in the worst cases, subordinates who feel powerless to question the actions of the leader even when they cross clearly demarcated lines of acceptable behaviour.

The Sutton case has all the hallmarks of the cult of the CEO. His appointment was met with quivers of exultation and impossible hopes were attached to the appointment of this one man. We weren’t asked to just trust in his competence, but take in and love everything about the man — his pleasantly dishevelled hair, the way he sometime uses a bicycle to transport his person around, his propensity to mainly not wear ties — or to wear really great ones at other times. How does it play out within an organisation when the chief and his public image is so central to who you are and what you are doing? How easy is it to question that person? Do they get held to the same code of behaviour as others, and will anyone listen if you speak up? In the Sutton case, the uncomfortable answers to all of those questions are there for all to see.

Here are the qualifiers: (1) Good leaders do make a positive difference in organisations and they should be valued; (2) Not all CEOs fit the model described above, many are decent and capable people with a healthy sense of perspective. My argument concerns the celebrity-CEO model, an increasingly prevalent subset that promotes a mode of leadership that is more likely to be short-termist, flashy, and hollow. At its worst it promotes a dangerous internal culture of demagoguery. The successful leaders I know, in business, politics, and the community have more substantial qualities — they collaborate and recognise that success comes through the endeavours of many, they generally have a track record of graft rather than glitz, and ultimately they understand that their own needs and profile are secondary.

In the end Chester V gets eaten by a giant sentient hamburger, and of course many of the celebrity CEO’s come a cropper too. Sometimes their lack of substance flows through to the bottom line and a call gets made by the Board, often they jump from project to project leaving chaos in their wake, and from time to time there is a Roger Sutton and it all ends in scandal. We’d be wise to absorb the lessons of history — cults generally collapse under the weight of their own absurdities and unmet expectations. CEOs are flawed human beings just like the rest of us and pretending otherwise will cause more damage than good.