Hot Commodity

The end of August is one of my favorite times of the year. Not because it signals the end of the summer, but because it signals the start of football season! I just finished watching my Jacksonville Jaguars dominate the Atlanta Falcons, and I’m looking forward to some exciting upcoming games. During halftime and commercials I was also checking out other news in the NFL realm. Major highlights include the fact that Brett Favre just officially signed with the Jets as their new quarterback and how terrible it might be for the Colts that Peyton Manning has been out during their training camp (because he is recovering from a knee injury). Whether I go on NFL.com or flip to ESPN on TV, I see one of two images- mobs of reporters fighting to speak to Favre or mobs of reporters trying to speak to Tony Dungy (Colt’s head coach) and other members of the team.

I love Peyton Manning, so much so in fact that I wrote about him in my college admissions essays two years ago, but sometimes the celebrity status that QBs achieve is over the top, and worse, harmful to the team’s dynamic. Furthermore, it’s not always the QBs that attract the attention, but rather the media (who needs content to engage viewers/readers) that often creates too much hype.

Well, the same thing happens with celebrity CEOs. There is absolutely no doubt that a great CEO, or QB, is extremely important to the success and development of any company, or football team, but importing someone just because of their “celebrity status” can often be detrimental. In the case of the CEOs, one of several problems seems to occur frequently:

1) Celebrity CEOs come in feeling like they must immediately change or raise the stock price- but if they don’t recognize the environment within which they are working, they end up harming the long-term returns of the very company they set out to strengthen in return for ephemeral short-term gains. They are so intent on making their own mark that they forget the importance of conserving or nurturing key aspects of the organization’s culture.

2) Celebrity CEO’s all too often try to impose a copycat culture by attempting to replicate the strategies of a current market leader, their last firm, or a contemporary favorite (today’s include Google, Apple, Toyota, etc). They forget that the mission, values, and practices that form the core of an organization’s culture should be unique to afford competitive advantage and value creation. This may be a terribly shallow analogy, but to me this is similar to when girls see a sexy black dress on a celebrity or model and assume it will look just as good on them. In either case, the result is usually not so “hot”.

3) Some celebrity CEOs get caught up in the “fame” and find themselves interacting with the press more than the organization. Conducting a few town-hall meetings and being interviewed for business magazines and newspapers unfortunately does not lead to success for the company. They state and restate the “importance of” the company’s strategies and values so often for the media that employees end up thinking the speech is just for the sake of investors and analysts and not actually aimed at the people that make up the core of the organization.

These are just a few examples of how the CEOs themselves can wreak havoc. Other times, when something goes wrong just because of changes in market trends or macroeconomic factors beyond the control or predictive powers of the company, people find it easier to blame celebrity CEOs instead of focusing on the real problems at hand. Also, people begin to doubt the capabilities of the firm without it’s “fearless leader” even though there are often others who could do just as good a job if given the opportunity.

I’m not proposing that it’s bad for a company to find its CEO in the public eye often, but rather that too much idolizing can be harmful. There are several that I idolize myself; but as CEO, one must always be cognizant of this potential pitfall. Basically, if you can’t handle the heat, get out of the kitchen.

This entry was posted on Saturday, August 9th, 2008 at 11:35 pm and is filed under Management Musings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.