Attitude adjustment – attitude syndrome of CEOs – Speaking Out
Robert W. Lear
My young friends define someone with an attitude in slightly different ways. In general, however, they refer to a person who is cocky, arrogant, or over-imbued with the importance of his or her position. If they met some of the CEOs I have been running across lately, I suspect they would say these executives have “an attitude.”
Why is it that some perfectly normal, well-balanced people begin to change their ways as soon as they become CEOs? What is it about the chief executive’s job that inspires sudden delusions of grandeur?
The symptoms of the “attitude syndrome” are all too familiar:
* Develop an all-consuming passion for the company airplane. Fly in it everywhere, including your vacation home, which becomes your “off-premise office.” Use it even when it is more convenient to take the shuttle. (Is this the same guy who established the new rule about everyone flying economy class?)
* Redecorate the corner office. Do it grandly with expensive art and a fancy decorator. Hire two secretaries.
* Drive to work in a stretch limo. Better yet, move the whole headquarters to a more convenient location for you. Publicly state that these are simply rewards for all your hard work.
* Join everything that is exclusive and expensive. Go to endless outings. Sit on innumerable daises. Lunch with the jet set. Arrange for press interviews; after all, articles about you are good publicity for the company.
* Start talking more and listening less. Have people come to see you instead of going to them. Run meetings with a fixed agenda and an iron hand. Deal more and more with only those who directly report to you. Then you won’t have to hear from people who might disagree with you.
* Pack the board. As directors retire, stack the board with your personal friends or those who do business with your company. Don’t pay attention to all that corporate-governance crap you read about in business magazines. Just make a fair profit, pay reasonable dividends, and the shareholders will be happy. It is no coincidence that some of this sounds like William Agee, ex-CEO of Morrison Knudsen; or the late Peter Grace, former head of W.R. Grace; or Lee Iacocca, the onetime high-flying CEO of Chrysler. Their “attitudes” have been widely publicized. But I am really talking about the much larger group of CEOs who are just beginning to develop these same delusions of grandeur and grandiloquence in one form or another.
What do CEOs do when they begin to feel themselves sliding into an “attitude”? Do they pull up short and say, “I’m not going to let that happen to me”?
Probably not. The truth is, you seldom realize it, or you think no one notices, or you simply don’t give a damn.
There is someone, however, who notices, cares, and is in a position to do something about the situation: your board of directors.
Boards today are not the sycophantic patsies they used to be. We are all aware of some exceptions, but increasingly, there is a growing coterie of strong, experienced, independent outside directors who are not shy about telling CEOs when they think their “attitudes” are showing. What’s more, today’s directors have a handy device that gets the point across – it’s called CEO evaluation. All the current director surveys report that a majority of corporations regularly conduct formal CEO evaluations.
To be sure, the intensity and frankness of these evaluations vary widely. Some are like the performance reviews of the past, when your boss said, “We don’t need to waste time doing this with you. You’re doing a good job, so let’s get on with our business.”
And I am sure some boards say, “We evaluate you as CEO every board meeting with the financial statements and every time you come up for salary review and bonus appraisal. We don’t need a special evaluation.” But in the best evaluations, the CEO is seriously measured against an ambitious list of quantitative factors and a less definable, but critical, list of qualitative factors. These include: integrity, vision, leadership, ability to meet corporate performance objectives, and succession planning.
If you are a director faced with evaluating your CEO this year – either by the full board or by a Corporate Governance Committee – maybe you should examine his or her “attitude.” It might require some readjusting before it is too late.
Formerly the CEO of F.&M. Schaefer (1972-1977), Robert W. Lear is chairman of CE’s advisory board. He also teaches at Columbia Business School, where he is an executive-in-residence. He is an independent general partner of Equitable Capital Partners and holds directorships with Scudder Institutional Funds; Korea Fund; and Welsh, Carson, Anderson, Stowe Venture Capital Co.
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