An article in The Globe and Mail is entitled "Ego and the CEO". In this article it states that a new study argues "that the biggest risk factor for fraud is a CEO with a truly oversized ego".
They needed a study to figure this out? There is no question that to lead a company or a country for that matter you need to have a healthy ego, because otherwise you wouldn't ha
ve the confidence to believe you were actually the person to lead thousands if not millions of people. However there is a fine (or maybe not so fine) line between healthy and overblown. The latter can often stem into the narcissistic arena if not into that of sociopath (more about this later).
Those who are inevitably charged with fraud most often believe that they are smarter than everyone else and that they won't be caught. They are able to quickly assess the vulnerabilities of their minions and pander to their woebegone egos to make them feel part of a special club and when these pawns realize that what is going on is fraudulent, they are either in to deep already and can't see a way out (or their boss threatens them with unspeakable outcomes if they blow the whistle) or they can justify their actions in some sort of twisted logic way.
I have often watched some of these so-called "celebrity CEOs" who come in to great fanfare, only to gut a corporation's soul. It is interesting to watch from the sidelines (although once I had the academically interesting but emotionally unfortunate opportunity to watch it close up and personal). They are "what the company needs", "they will enhance shareholder value"...blah, blah. And for a time, they seem to do just that. There is a bit of excitement (and fear) that goes along with a new CEO coming in and at the beginning it seems that their actions will be good for the company.
To be fair, these CEOs are not necessarily fraudulent, although their actions are highly questionable and the devastation that they leave in their wake is just as palpable as that resulting from fraud.
There are so many of these CEOs that have crashed and burned (along with the companies they ran) that you need to ask the question..."How do they keep on getting work". I think there are a few key points to consider:
1. Many of these CEOs are brought in by a board, may members of which may know them personally. Note to board members -- how someone is personally does not necessarily mean that they are good leaders. I am not passing any judgement here, but how can a Bob Nardelli go from being tossed out from Home Depot (with $200M severance) to leading Chrysler (which of course now is going into oblivion -- and don't say it is because it was on its path there anyway -- Nardelli was brought in as its saviour). Or Mike Zafirovski -- Nortel's answer to survival? Yeh right. Should I also mention that these two were from GE and the Jack Welch school of leadership? (don't get me started!)
2. I've also noticed a trend (not picked up by the study noted earlier) that there seems to be a three year rule. These "wunder-kinds" can keep on moving from company to company and have a grand reputation go with them, as long as they don't stay beyond three years. Because you see, if you have a big behemoth of a corporation and you rip the guts out of it, it actually takes about three and a half to four years for it actually to realize that it is in its death throes! Because I don't want to be sued for defamation of character, I won't name names here, but go back and look at those over the years who have their names in lights in Business Week, or similar magazines.
Firstly, the Boards and shareholders should keep a view to the company the CEO just left (and even those prior) to keep a view on its performance. Because I tell you, if you look back, it can often predict the future. Many of the companies that these CEOs leave end up having huge issues. Of course the CEO will indicate that this is due to the firm not being able to run without his/her (although its mostly a "his" issue) mastery at its helm. Hmmmm.....
When this CEO begins believing their own press, and stay beyond three years in a company, then their actions do catch up with them. And eventually, within the 3 1/2 to 4 year time period they walk the plank. Of course they often walk the plank weighed down by the millions of dollars which can only be seen as a reward for being incompetent -- the analogy of pirating truly fits here.
Oh...and if your CEO ends up as the CEO of the year in Report on Business -- start looking for a new job, because to date I have not been too impressed with their choices.
There is a
good book which I recommend to anyone who wants to learn more about the psychopaths who lead us should read Snakes in Suits -- When Psychopaths go to Work. I found the book fascinating and scary -- because it was too easy to see how many there are actually out there!
They needed a study to figure this out? There is no question that to lead a company or a country for that matter you need to have a healthy ego, because otherwise you wouldn't ha
ve the confidence to believe you were actually the person to lead thousands if not millions of people. However there is a fine (or maybe not so fine) line between healthy and overblown. The latter can often stem into the narcissistic arena if not into that of sociopath (more about this later).Those who are inevitably charged with fraud most often believe that they are smarter than everyone else and that they won't be caught. They are able to quickly assess the vulnerabilities of their minions and pander to their woebegone egos to make them feel part of a special club and when these pawns realize that what is going on is fraudulent, they are either in to deep already and can't see a way out (or their boss threatens them with unspeakable outcomes if they blow the whistle) or they can justify their actions in some sort of twisted logic way.
I have often watched some of these so-called "celebrity CEOs" who come in to great fanfare, only to gut a corporation's soul. It is interesting to watch from the sidelines (although once I had the academically interesting but emotionally unfortunate opportunity to watch it close up and personal). They are "what the company needs", "they will enhance shareholder value"...blah, blah. And for a time, they seem to do just that. There is a bit of excitement (and fear) that goes along with a new CEO coming in and at the beginning it seems that their actions will be good for the company.
To be fair, these CEOs are not necessarily fraudulent, although their actions are highly questionable and the devastation that they leave in their wake is just as palpable as that resulting from fraud.
There are so many of these CEOs that have crashed and burned (along with the companies they ran) that you need to ask the question..."How do they keep on getting work". I think there are a few key points to consider:
1. Many of these CEOs are brought in by a board, may members of which may know them personally. Note to board members -- how someone is personally does not necessarily mean that they are good leaders. I am not passing any judgement here, but how can a Bob Nardelli go from being tossed out from Home Depot (with $200M severance) to leading Chrysler (which of course now is going into oblivion -- and don't say it is because it was on its path there anyway -- Nardelli was brought in as its saviour). Or Mike Zafirovski -- Nortel's answer to survival? Yeh right. Should I also mention that these two were from GE and the Jack Welch school of leadership? (don't get me started!)
2. I've also noticed a trend (not picked up by the study noted earlier) that there seems to be a three year rule. These "wunder-kinds" can keep on moving from company to company and have a grand reputation go with them, as long as they don't stay beyond three years. Because you see, if you have a big behemoth of a corporation and you rip the guts out of it, it actually takes about three and a half to four years for it actually to realize that it is in its death throes! Because I don't want to be sued for defamation of character, I won't name names here, but go back and look at those over the years who have their names in lights in Business Week, or similar magazines.
Firstly, the Boards and shareholders should keep a view to the company the CEO just left (and even those prior) to keep a view on its performance. Because I tell you, if you look back, it can often predict the future. Many of the companies that these CEOs leave end up having huge issues. Of course the CEO will indicate that this is due to the firm not being able to run without his/her (although its mostly a "his" issue) mastery at its helm. Hmmmm.....
When this CEO begins believing their own press, and stay beyond three years in a company, then their actions do catch up with them. And eventually, within the 3 1/2 to 4 year time period they walk the plank. Of course they often walk the plank weighed down by the millions of dollars which can only be seen as a reward for being incompetent -- the analogy of pirating truly fits here.
Oh...and if your CEO ends up as the CEO of the year in Report on Business -- start looking for a new job, because to date I have not been too impressed with their choices.
There is a
good book which I recommend to anyone who wants to learn more about the psychopaths who lead us should read Snakes in Suits -- When Psychopaths go to Work. I found the book fascinating and scary -- because it was too easy to see how many there are actually out there!
1 comment:
"It's still possible for an American to make a fortune on his own."
"Sure-- provided somebody tells him when he's young enough that there is a money river, that there's nothing fair about it, that he had damn well better forget about hard work and the merit system and honesty and all that crap, and get to where the river is................"
— Kurt Vonnegut (God Bless You, Mr. Rosewater)
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