Every Friday, the
Wall Street Journal features a
back-end section called “Mansions.” The slick editorial content that anchors
and bolsters the numerous real estate ads generally features stories and glamorous
photos of high-end estates of the rich and famous: movie stars and rock
musicians, hedge fund manages and, yes, CEOs.
Likewise, the ads feature more
eight-figure offerings than I knew existed – entire islands on the Georgia seacoast,
1,000-acre Montana ranches, and hilltop Napa retreats (complete with working vineyard).
One time a couple years ago,
“Mansions” ran a story accompanied by many photos about the home offices of a
few CEOs. Suffice to say, these lairs were large and pretty plush, complete
with massive antique desks, dark wood paneling, Oriental carpets, and
magnificent views.
The piece got me thinking about the
public face of high profile executives and the implications of that image inside
their organizations. Certainly leaders of successful and growing corporations
are entitled to the generous remuneration their hard work and leadership might
bring them. No one, least of all me, is going to begrudge them their well-earned
wealth.
Unfortunately, it’s the exceptions
to the rule that get the most attention, raise the public’s ire, give fodder to
grand-standing politicians, and impugn other CEOs’ personal lives: e.g., Bernie
Ebbers of Worldcom, and Jeffrey Skilling of Enron, to name but two.
And then there
are the Larry Ellison types who vulgarly wallow in their wealth publicly. Unfortunately, these bad apples cast aspersions on other CEOs.
Role models
Company leaders and
their behaviors on the job serve as important role models for how people within
the organization should operate and think of their companies. On the other
hand, CEOs’ private lives (and behaviors) off the job are out of bounds and not
a matter of concern inside the company –
that is, unless the multi-million-dollar birthday party he threw for his wife in
Tuscany is featured in mass media (i.e., Dennis Kozlowski, ex-CEO of Tyco).
In these kinds of cases, we’re in
different territory and a CEO’s private life is public, as they apparently
wished, and therefore open for critique.
Jet set behavior, high profile public
affairs and divorces, arm candy girlfriends, immense yachts, or palatial
mansions featured in places like Mansion,
Country Living, People, TMZ, Inside Edition, or the society pages of
major newspapers present to all the world images of people of substantial means
gleefully living life to its fullest.
But that kind of public behavior
also creates an image and effect inside the CEO’s company that may be less than
ideal. It should also give pause to all corporate leaders and boards. For
instance, imagine what life was like within Tyco for the other members of the leadership
team working to build a sense of common mission among all employees, while
their showboating CEO’s very public activities became the butt of late night
comedy jokes and, ultimately, Congressional hearings, criminal investigations,
trials and convictions.
The typical hard-working employee,
ardently striving to do his job well and meet or exceed his targets hopes for
an occasional “thanks,” “atta boy,” or perhaps even a bump in pay, bonus, or
promotion. What impact does a fast-living, high profile CEO have on his
attitude about the company and how he operates going forward? Should he care?
How does he feel about his modest 5% raise while his CEO is pulling down a $100
million salary, plus bonuses and stock options?
One could argue that the life being
led by a successful and highly visible CEO might serve as a model to which employees
can aspire: hard work and dedication to helping the company succeed might
ultimately pay off with such a life for themselves – after one dedicates years
of hard work contributing to the company’s success, climbing the corporate
ladder in the footsteps of the incumbent CEO.
The CEO’s burden
No one is kidding
anyone: the CEO bears a massive responsibility for which he/she is handsomely
rewarded. But, as already noted, the CEO needs to be ever mindful of how
his/her external public image is being perceived inside. A CEO’s involvement in
community organizations or charities is good, especially when such activities
underline and reiterate the company’s own choices for community outreach and
enhance its image in its markets.
And there’s nothing wrong with
enjoying the fruits of one’s success with one’s family in a large home in an
upscale community, with the kids enrolled in private schools, and Aspen ski
vacations – provided it’s done privately and not flaunted publicly.
It’s the plush home office or the
seaside summer estate paraded in mass media that creates a different and not
altogether positive aura inside the organization that the CEO would be wise to avoid.
And what’s worse is when that image is magnified and worsened internally by an
attitude of aloofness and indifference toward employees within the CEO’s
company.
That kind of disconnect between a
CEO and his company leads to disaffected employees. Eventually, the better ones
begin to migrate away from the company to competitors, while the remainder toil
away joylessly in the shadow of a showboating CEO. At the end of the day, that
company will not thrive. In fact, it’s on a fast track to self-destruction. Ask
yourself where Enron, Worldcom and Tyco are today.
