23 May 2008

"Celebrity" CEOs can undermine performance

Lack of attention to conserving an organization’s culture is a common pitfall.

Interpreting the results of BlessingWhite’s research on the State of Employee Engagement 2008, BlessingWhite CEO Christopher Rice says “Despite their best intentions, celebrity CEOs can easily undermine performance because of all-too-predictable mistakes.”

The global research was conducted by the consultancy between December 2007 and February 2008 and includes responses from more than 7,500 participants and more than 40 interviews with HR professionals and line managers. The Hub covered the launch of the results back in April.

Steady approach pays off
Analysis of the results reveals that high-profile chief executives brought in to deliver rapid results often have an opposite impact, according to BlessingWhite.

“They come in bent on immediate change or raising the stock price. But if they don’t understand the culture they're working with, they end up harming the very organization they set out to strengthen in an attempt for short-term gains,” says Rice.

Get connected
While they make headlines, noted Rice, celebrity CEOs and their management team frequently find themselves disconnected from the organization.

“They’re so intent on making their own mark that they don’t pay attention to conserving key aspects of the organization’s culture. Our research has shown that a healthy organizational culture can serve as the foundation for workforce engagement. This is critical for sustaining a business through good and bad times.”

Rice identified 5 common pitfalls of celeb CEOs:

1. Copycat cultures: Mission and values form the core of an organization’s culture and should be authentic and unique in order to afford competitive advantage. Some CEOs make the mistake of trying to replicate the strategies of the market leader or recreate the culture of their last firm without regard to the culture already in place.
2. Communication breakdowns: Some CEOs think they can conduct a few town hall meetings and then call it a day. Leaders at every level must actually state and re-state what the organization stands for as well as the strategy and values. Otherwise the CEO risks being tuned out and the impact of the message ignored, with most employees thinking the speech is just for the sake of investors and analysts, not core to the organization’s mission.
3. Hypocrisy at the top: Actions speak louder than words, and a CEO’s failure to exemplify core values will not go undetected. And although BlessingWhite’s research indicates that most employees don't feel safe challenging their leaders’ decisions and behaviors, the findings also suggest that employees will take stock — and move on if they perceive hypocrisy at the top.
4. Forgetting the team: Culture can't be successfully changed and sustained without help from the front lines. But, frequently, mid-level managers are held accountable for business results only and culture issues are left the responsibility solely of senior leadership or the HR department. 

   Some CEOs make the mistake of trying to replicate the strategies of the market leader.

5. Empty labels: Integrity, Respect, Customer First, Innovation, Risk-Taking. Values like these are the core of organizational culture. New CEOs are sometimes unable to make these intangible terms real for employees throughout the organization. The definitions, not the labels, shape employee behavior.

Cultivate culture
“If cultivated around a compelling mission and core values, culture can be a CEO’s secret weapon. If ignored, an organization’s culture can undermine new ideas for growth, spit out the people who don’t fit and survive long past the celebrated leader who chose to misjudge its importance,” says Rice.

Have your say
Are you struggling to adjust your company culture? Do you need to modernize your communication methods but your "traditional" company culture is making this difficult?

Discuss these issues with other comms practitioners by joining the Internal Comms Hub members' group on the Communicators' Network.

Other recommendations:
Four ways to overcome cultural communication differences

Focus on your "almost engaged" employees for quick wins

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