I have worked for a few different companies, with a number of different CEO's, and one of them even ending up on the television show "Under Cover Boss" which airs on CBS. In my experience, the CEO's are so far removed from what happens in the bowels of their organization that they aren't privy to what goes on in the field. In fact, I sometimes think they implicitly don't want to know what's going on because they would be forced to actually do something significant to resolve each situation. So in order to save costs, they turn a blind eye to issues which might seem costly and insignificant to them, but are instrumental to the success of their organization. In simpler terms, they're cheap. They cut costs but downsizing, cutting corners, not investing into a corporate infrastructure. They are confused about what matters, and it's not so much confusion as greed.
When a company is in trouble, I've rarely heard a CEO quoted as saying, "We've decided to cut all of our executive salaries". I know that in some cases this has happened, and I applaud those executives but it is rare.
On the contrary, the response is more likely to be, "We are now out sourcing all our production to _____, so we'll be closing a few plants, and we'll be cutting our sales force by 300 reps and switching to an automated calling system." Those are the types of messages you hear from CEO's, especially American CEO's who are still paid better any other CEO's in the world.
Hey, Mr. CEO, I bet your salary equals that of the 300 reps you just laid off. Well at least they contributed something to the company which you did not. They brought in sales. CEO's come in, do their short stint, and then leave, and hopefully they leave the company in a better position then when they were hired as the CEO. It's all about making money and getting out before the pressure gets to be too great. The system innately justifies greed, and many CEO's take advantage of the situation.
Years ago when I was blessed with profit and loss responsibilities, my focus was always on generating revenue to cover costs, not on cutting costs to counteract stagnant or falling revenue. There are different ways to manage an organization and CEO's generally fall into 2 different types.
Top Line CEO - This CEO generally focuses on bringing in business and hitting his/her projections for revenue. The concern for them is looking good and making sure their sales revenue goals are achieved. Here are a list of 10 things which might tip you off that your CEO falls into this category.
- They talk a lot about what "I" want to achieve. Not necessarily the organization, but their personal achievements. They could give a damn about the company. They've concluded that if they succeed then the company does as well.
- This CEO has a focus on bringing in sales not reducing expenses. They "spend money to make money".
- CEO doesn't drool over spreadsheets but does over marketing materials. Might not even know what an Excel spreadsheet looks like.
- Allows someone else to handle the economics of the business, because "that stuff is boring."
- They focus on the "big picture" and they try to convey their message to the rest of the company. They have a "vision", but too bad that vision is sometimes cloudy, and so muddled the employees need glasses to see it clearly.
- They want everyone to like them, and then to like the company. However it's very important for them to be liked by people. Sometimes they want people to like them so much, they sleep with them, which doesn't work out to well for the company or for the employee they slept with...and yes I have worked with companies where these types of indiscretions happen.
- This CEO will sometimes spend too much on stupid stuff. Like hiring a crappy band to play at the National Meeting and paying them a ridiculous amount of money because they saw the band once, when they were drunk, and thought they were awesome! It's more important for them to be the life of the party then to worry about where their going to get the money to pay for the party.
- They seem to be more concerned with what shoes they are wearing then with what's happening in operations. Wardrobe is their major malfunction.
- When they party, they party hard. Harder than almost anyone in the organization, but you wouldn't know because they've been practicing their whole lives. They can be completely hammered and just appear slightly "buzzed", despite the fact that their alcohol content would paralyze most normal people.
- Their hero is Richard Branson chairman of the Virgin Group, an amalgam of over 400 companies. The problem with this is, they're nothing like Richard Branson.
Bottom Line CEO - Many of the other CEO's fall into this category. They are more concerned about earnings then anything else, because to them; it's their job. They do not socialize with employees because that would make them less objective and therefore affect their judgment. Here is a list of 10 characteristics you might find in a Bottom Line CEO.
- They like to recycle paper, paper clips, office supplies, and anything else which will save the company money. They will say it is to help the environment but it's a lie. They're just being cheap.
- Excel spreadsheets are what they know best and they can probably create one blindfolded.
- They use terms like "spartan" and "tightening our belts", but what they really mean is you as an employee should be prepared to sacrifice. The CEO on the other hand, will still be spending money on trips and staying at 4 star hotels, while you are forced to sit at a desk which could be infected with mold or anthrax.
- Micro-manages the numbers of the business. He/she knows how much the company is paying for marketing pieces down to the last form, and always want to keep an eye on employee expenses. Well other employee expenses, but not his/her own.
- This type of CEO is so near sighted they need a telescope to see the future. Their focus is on making an immediate impact on the company, and usually they do that by cutting expenses. Despite the fact that this might ruin the company, they will cut whatever they can to show a profit. Including the workforce that produces the product or service.
- The Bottom Line CEO could not give a damn whether you like him/her. They revel in the fact that to remain objective they must have a certain level of employees who hate them. They sleep or have sex with no one, including their spouses because it might compromise their objectivity.
- This CEO will not spend even a dime on something unless he/she has researched the purchase and is sure it's a good one. They will spend way too much time exhausting resources and time on insignificant purchases like pens, pencils, or paper clips.
- They wear roughly the same outfit just about everyday. Like Einstein, every suit they own might look exactly the same in order to save time in making a decision Sometimes they even take the time to launder their clothes. Don't expect them to be wearing any designer outfits, except maybe something they found at Marshalls, Ross, or T.J. Maxx. Chances are on weekends they're wearing Kirkland brand jeans.
- They party and then the party is over by 9 pm, so they can go back to their room and look over spreadsheets. Secretly, they might be into some weird music like Yani, but you would never know, because they reveal NOTHING. They have the personality of a bar of soap, and don't expect to see them out past their bedtime of 10 pm.
- Their hero is Mark Hurd former CEO of Hewlett Packard who fired 24,600 employees in a span of 6 months, because he felt their jobs were "redundant".
If you have a CEO who is a combination of the two types, then you've got a winner. A leader who can bring in revenue and cut costs without jeopardizing the future of his/her employees.
All the companies I've worked with had CEO's but only 1 stood out to me, while the other's seemed to be utterly confused about their position and how they should proceed. In addition many of the CEO's were related to the founder of the company, so they were literally inheriting a position and they did not know how to lead. It is a huge responsibility running a corporation and unfortunately very few people are good at it. The average tenure of CEO's is now down to 5 years in 2012 from 10 years in the 1990's. Mainly because of the pressure to produce and the lack of ingenuity on the part of the latest crop of CEO's. They listen to management and not to their people. And when they're not successful they wonder why? This is why many CEO's have this naturally confused look on their face. Please refer to the photographs below as proof of this business phenomenon:
Goldman Sachs CEO ATT CEO
Confused or just clueless? Probably both...
Have a great day out there selling! Make it your best day of the year!
-M
