Most league tables are confusing, but to me the rankings of the best CEOs are both confusing and highly suspect. CEO rankings seem to depend upon who is doing the ranking and more importantly the criteria used for judging. For example, if you look at long-term growth in market capitalization, Steve Jobs is the modern day winner, and Jack Welch probably the winner for a past era. And if you don’t like market cap growth, then rank them by compensation and you get a very different list, one where Warren Buffet isn’t even in the running.
In my mind most of the CEO ranking lists are based on things that don’t really matter, like media popularity, “most respected” by analysts, company size (not usually built by the incumbent CEO), public versus private, and any number of ways to carve up the list.
I’ve been thinking of a different way to rank, and rate CEOs, by asking the customer. And just who, you are probably asking, is the customer of the CEO? In my mind, it’s the management of the company. It’s no different between a shoe company and those who buy its products. The customer in this case is looking for many things; quality, service, consistency, value, a positive shopping experience, open and honest communications, openness to feedback and suggestions, etc.
The same in the relationship between the CEO and management. To be productive, motivated and creative, managers need a CEO who gives open and honest communications, is consistent in her behaviour and interactions, develops productive management processes, provides a motivating work environment, is open to new ideas and suggestions, engenders trust and respect. A CEO who is passionate about the wellbeing and productivity of his “customers”.
I’d like to see a scorecard where management does the voting. And while we are at it, lets make it a Balanced Scorecard. Not just financial elements, lets also rate the CEO on other elements of a Balanced Scorecard, like Learning and Growth, Internal Management Processes, Culture, Employee Satisfaction, Innovation and other meaningful elements of a productive and aligned workplace.
We call CEOs leaders and ask for better leadership, yet we tend to focus on financial results. We’ve recently witnessed the trouble that an obsession with profit, EBITDA and other one-sided metrics brings. If we hold CEOs to a higher and broader standard, we just might get better leadership at all levels.
You get what you measure. – Peter Drucker
Tight Lines . . .