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August 29, 2006
L'Etat, C'Est Moi (The State, That's Me)
With these immortal lines, King Louis XIV of France provided a standard for those in government or in business, who believe that their individual leadership is the essential ingredient in the success of the enterprise. In keeping with this general line of thinking Saturday's edition of the (sub. req'ed) Financial Times featured an article by US business editor Francesco Guerrera titled "Forget the Salary Packages, Look at the Size of Their Egos."
Guerrara reports on a new study from Penn State professors Arijit Chatterjee and Don Hambrick titled, "It's All About Me; Narcissistic CEOs and Their Effects on Company Strategy and Performance." The professors argue that "corporate chieftains with super sized egos favor grandiose and higher-risk strategies...acquisitions, large-scale product launches and aggressive international expansion...they can hit big but they can also miss big." The professors claim that the size of the CEO photo in the annual report, the number of times "I" is used in the shareholder letter and even the CEO's entry in the Who's Who directory are key variables for determining ego.
Guerrara contends that in the current "gloomy" business environment, "new opportunities are hard to come by for established players in developed economies…that companies long admired for their strategic prowess (BP, Dell) suggest that being the darlings of management consultants is no protection against operational pitfalls...(this) calls for CEOs with steady nerves a willingness to do the boring bits and downsizeable egos; more bashfulness and less BHAGs(Big Hairy Audacious Goals)."
Despite Guerrara"s cogent argument about the dangers of the ego-driven CEO, companies need real leaders who communicate constantly, in a real tone (without the message triangles and staged settings), and are willing to listen to stakeholders. For CEOs and their harried PR directors attempting to offer counsel in a tumultuous and increasingly looking to strike the right balance, here are a few observations:
1) Nobody achieves true success by daring only modestly. Great companies continue to evolve and to take risk. Using a sports analogy, you cannot win unless you throw the ball down field in American football. Lee Scott's embrace of the environment as a potential competitive advantage for Wal-Mart is intelligent strategy daringly implemented.
2) Communicating the goals of the corporation can no longer be done by one person. The PR director should work against the tendency of the media to personalize the company culture in the form of the CEO. The dispersion of authority to employee bloggers, the baristas at Starbucks and other credible sources means that the company is secure in its values and able to share its successes.
3) Though Wall Street pushes companies to make short term numbers, the company's long term mantra needs to remain fixed. Look at P&G's A.G. Lafley's emphasis on serving the consumer; he fits everything from R&D to marketing under that rubric.
4) Companies need allies in the constant pursuit of credibility. The GE Eco-Imagination program was embraced by the company's former opponents in civil society, the NGOs, because they had input to the initiative and felt that it validated the "green can be green" thesis.
Mr. Guerra, it is the wrong message to tell CEOs to be more bashful. They should be out in the marketplace selling the company narrative. They should empower customers and employees to speak out. They should be passionate advocates on issues like intellectual property protection, catalyzing public support for their lobbying efforts with government. In a world of "continuous partial attention," this is what is required of successful leaders.
In this context, I want to acknowledge the (sub. req'ed) PRWeek editorial of Aug. 28th concerning Edelman's decision to stand down from the Council of PR Firms. We have the utmost respect for our competitors that remain members of Council. We have an abiding and shared interest in the issues facing the PR industry, from diversity to ethics. However, we disagree with the Council on a few fundamental points. Nevertheless, we will continue to be advocates for the PR industry to help all of us achieve the full potential of the business.
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CEO, PR, Public Relations
Posted by Edelman at August 29, 2006 10:51 AM |
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» The ego of a CEO: Noble Narcissist? from Ian Griffin's Blog
He that is proud eats up himself: pride is
his own glass, his own trumpet, his own chronicle;
and whatever praises itself but in the deed, devours
the deed in the praise.
Shakespeare: Troilus and Cressida: II, iii
The main task of a CEO is to c... [Read More]
Tracked on September 2, 2006 1:08 AM
Comments
You should rename your blog post, "The PR Industry, That's Me". Just like the egotist CEOs of old, the big PR agency honchos -- like you -- are also on their way out. As for your decision with the Council -- Edelman couldn't take the heat. It shows just how bankrupt your agency is when it comes to ethics.
Posted by: James Bruni at August 31, 2006 6:07 PM