The Biggest Problem With Being CEO

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Isolation is a problem faced by every leader, and the larger the organization, the greater the isolation. In an interview with McKinsey & Co., Richard Bracken, chairman and chief executive of Hospital Corp. of America, addresses this problem. “It’s common for CEOs to feel surrounded by people who filter negative information,” Bracken says.

“To get unfiltered information, I’ve found that you must spend significant and quality time in the operations environment,” Bracken adds, noting that he regularly talks to people across his 200,000-employee organization. “I get important intelligence directly from them. I can assure you I get very candid input. It is these relationships that can drive a better understanding of a new initiative or identify flaws early in the process.”

Peter Drucker wrestled with this same challenge. “The president of a company, whether large or small, is insulated by his position,” he wrote in The Practice of Management. “As soon as the business attains even modest size, everything brought to him for information or decision is of necessity predigested, formalized and abstract. It is a distillation rather than the raw stuff of life.”

Drucker did advocate leaving one’s office and walking around to see what was happening among associates in the organization. In later years, though, he came to be skeptical of this approach.

That was the right advice then; now it is the wrong thing to do, and a waste of the executive’s scarcest resource, his time,” Drucker wrote in a 1990 essay that appears in Managing For the Future. In fact, walking around might be dangerous, inducing a “false sense of security,” according to Drucker. “It may make executives believe that they have information when all they have is what their subordinates wanted them to hear.”

So then we’re back to square one—isolated, yet not necessarily better off from walking around.

What can be done? Drucker’s writings offer several ideas. The first is, simply, not merely to tolerate but to reward dissent in one’s subordinates—a theme we’ve explored before. The second is to forge chains of command that are as short as possible, because each relay “doubles the noise and cuts the message in half.”

The third is to get outside the company altogether (a tactic we’ve also discussed before). Finally, recognize that the very structure of a company “must be based on the upward communication of information” (another theme we’ve hit upon previously).

1 comments
SalingersGhost
SalingersGhost

The biggest problem of being a CEO is isolation and being perceived as being behind walls and not accessible - which is why it is important to stay in touch. I think one of the best CEOs is Khan Manka, Jr. - he maintains a company blog that keeps everyone informed of most of his decisions... and some of the thought processes involved...

http://mankabros.com/blogs/chairman/