Move On Dear CEO. It’s Time For A New One.
Many of the successful companies today have been around for decades or, sometimes, even centuries. That’s a long period of time during which they inevitably faced multiple challenges, the need to innovate and to stay nimble in a volatile market. But, if you take a look at the number of people who spearheaded these large companies, it’s usually just a handful of men who wielded enormous levels of power over the entire organization. They were demigods, who were believed to be capable of single-handedly leading the company through any crisis.
However, that much power concentrated within the hands of a single person, for years together, isn’t such a great idea. These powerful men often lose touch with the ground realities because they’re far too removed from those who do the actual work. Also, their egos become super inflated, leaving no room for dissent. In short, they become pseudo superheroes who care for nobody’s opinions but their own.
Why Semco Wanted Different CEOs
It might be an old cliche that too many cooks spoil the broth. But, in reality, companies that want to be agile and nimble should make decisions after considering diverse points of view brought to the table by people from various backgrounds. A single person calling the shots will no longer work in the changing world of business.
In fact, there was a point in Semco’s history when the company felt the need to keep the top job nimble. And to do that, they came up with the practice of rotating the CEO every six months. The company had several business units, headed by leaders with different skills, competencies and experiences. They wanted all that diverse experience to enrich the role of the CEO; help the current CEO gain a broader vision and make decisions after taking into consideration all relevant aspects and needs from the different business units.
The practice of rotating the CEO was extremely successful not only because it improved the business but because it enriched the unique organizational model in place at Semco. In other words, leaders from various backgrounds contributed toward this democratic model with their diverse visions for the company. As people who’ve been in the company for many years, the work of the leaders, who took turns being the CEO, was informed by not just their diverse backgrounds, but also by their solid understanding of the business and the unique management model at Semco.
When CEOs Don’t Know It All
It also created a symbiotic culture of sharing, where the different leaders who occupied the CEO position openly shared their knowledge and experiences with the current CEO. In short, there were no subordinates but only a peer group of equally capable leaders and the bonds they formed with each other was stronger than what’s seen in other companies, where the CEO is seen as the total embodiment of corporate power.
At Semco, since the CEO constantly changed there was no special aura around the leaders who occupied the position and it helped form a team of leaders that was extremely cohesive and supportive.
Jose Violi, who is one of the main shareholders in the Semco Partners Holding, had the opportunity to be the CEO of Semco for six months. At the time, he didn’t have much experience in leading from the top, but was able to assume the role with confidence because he had the support of all the other leaders. He didn’t feel like he was alone or thrown in at the deep end without much training. He says he was ready to tackle the job of a CEO because he felt like was on the same boat as all the former and future CEOs of the company. Whenever he had to make the final call, he says he felt more confident deciding with the support of others, than doing it all by himself.
Clearly, the practice of CEO rotation is a great way to inform top-level decisions with a diverse set of points of view, provided by leaders from various backgrounds. When leaders, who have a long-term understanding of the company’s business and organizational model, add their expertise to the equation, the decisions made are always better than those made by a single person. The fact that it’s a short stint at the top job makes it necessary for leaders to cooperate with each other. Apart from enhancing the bonds between the top level executives, the practice also breaks down stereotypes on the kind of qualification and experience required to be a company’s CEO.
Shock Followed By Acceptance
Although it seems like a great idea, it’s not one that’s easily accepted in the market. When people heard that Semco would have a new CEO every six months, there was a lot of confusion in the market. People found the prospect of having different CEOs attend different meetings or client follow-ups very unusual and the general reaction was one of surprise. People didn’t understand why a company would want to do something like this or whether it was a sustainable organizational model. But, as Semco began acquiring a solid portfolio of clients, suppliers and so on, the market gradually began understanding that this was also a part of Semco’s already unique culture.
The practice, which was initiated in the 90s, lasted for a period of three years. When it attained its natural conclusion, Jose Violi ended up continuing as the CEO for much longer because he came from the corporate area that worked with several other business units. The other leaders, went on to head the new joint ventures that Semco was getting into at the time. But even today, the leaders recall the program as one of the most enriching leadership experiences, which reinforced the bonds between the top level executive team.
Originally published at semcostyle.org. In collaboration with Aruna Iyer.
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