A Whole New Breed of CEO Runs the Big Businesses : Management: Listening to people, knowing what’s on their minds, and making them feel respected as individuals is essential, a CEO advises.
Autocrats, tyrants and eye-gougers are a vanishing breed on the American corporate landscape, according to top executives at several major firms.
The notion that a successful corporate chief must be a modern day Genghis Khan, as suggested by former Gannett CEO Al Neuharth in his book, “Confessions of an S.O.B.,” is simply not accurate, they say.
“It won’t work here,” says George B. Harvey, chairman, president and chief executive officer of Pitney Bowes Inc. “The employees would throw you out.”
Successful CEOs recognize that satisfying the needs of company employees can be just as important as satisfying the demands of stockholders and customers, Harvey says.
“You’ve got to listen to people, know what’s on their minds and what they worry about,” he says. To a greater degree than ever before, corporate employees “want to feel respected” as individuals.
The key to productivity at Stamford, Conn.-based Pitney Bowes, a company that reported $2.6 billion in revenues last year, is synergy, not adversity.
“I don’t like ‘creative tension,’ ” says Harvey, referring to a management style that pits employees against one another. “People ought to be free and willing to express their views. . . . Any manager that doesn’t solicit ideas from everyone is making a big mistake.”
James P. Schadt, president and chief executive officer of Cadbury Schweppes Beverages in Stamford, appears to take that philosophy a step further. Because his company competes with corporate monsters like Coca-Cola and Pepsi, Schadt encourages his managers to think creatively and act quickly. That’s the best way for a company like Cadbury Schweppes to score hits on its larger opponents in the marketplace, he believes.
“The only weapon we have is our people. . . . My job is to make people feel secure so they’ll be creative and open with their ideas,” he says. “In our company, no one ever gets punished for being open.”
The price of this freedom, however, is a heavier load of personal responsibility. “If I ever hear someone say, ‘I could have told you that would happen,’ I will do what I have to do and that person won’t be in the company,” Schadt says.
Like Harvey, he frowns on internal politicking. But that doesn’t rule out competition between managers. In fact, a degree of intramural competition is essential because the company owns several competing brands of soft drinks.
What prevents this sort of competition from turning ugly is a clear set of corporate values spelled out in a little white manual entitled “The Character of the Company.”
In addition to fostering a sense of fair play, the manual serves as a good recruiting tool for Schadt. The company’s size (it recorded $1.1 billion in sales last year, contrasted with $8.3 billion for Coca-Cola) prevents Schadt from offering prospective executives mega-salaries or huge departmental budgets to play with. “They come here because they want to be here, in our culture. It’s not just another job,” Schadt says.
Because today’s employees are better educated and more demanding than their predecessors, corporate leaders need a whole new set of skills to motivate them.
“The key things are communication and concern,” says David E. A. Carson, chief executive officer of Bridgeport, Conn.-based People’s Bank, a $6.3-billion, multiservice financial institution. “No organization that intends to be around for a while forgets its people.”
In an age of rapid-fire mergers and overnight acquisitions, a CEO’s reputation for honesty and sensitivity can prevent valuable employees from jumping ship when most needed. “The worst announcement you can make to employees is that nothing is going to change,” says Carson, noting that People’s Bank has been through six mergers in the last decade.
Candor is paramount when competing in a rapidly changing marketplace, many believe. In a recent article in the Harvard Business Review, John F. Welch Jr., chairman and chief executive officer of General Electric, stresses the importance of facing reality, rather than denying or hiding it.
“We’ve had managers at GE who wouldn’t change . . . ,” he says. “They wanted to sit back, to keep things the way they were. And that’s just what they did--until they and most of their staffs had to go. That’s the lousy part of this job.”
Welch, whose company reported revenues of $50 billion last year, says that many managers are still afraid to let go of the bureaucracy that cushioned them in the past. “Real leaders don’t need clutter. You can’t believe how hard it is for people to be simple.”
Gone forever are the days when a corporate boss could fly by the seat of his pants, relying on personal experience and gut instinct to safely guide his decisions.
Today’s CEO is “a professional manager, not a hip-shooter,” says William J. Alley, chairman of the board and chief executive officer of American Brands in Old Greenwich, Conn. A former U.S. Air Force captain, Alley now pilots a company that had revenues of $12 billion last year.
Alley believes that consistency is the prime ingredient in the recipe for modern CEOs. “If they’re going to be a tyrant or a nice guy, they’ve got to be consistent one way or the other,” Alley says, offering two successful generals, George C. Marshall and George S. Patton, as examples. “Marshall was a nice guy all the time; Patton was a tyrant all the time.”
The ability to play the role of a leader is also indispensable. “You can’t ask someone to do something you would not do yourself. It’s very difficult to set a standard you don’t maintain yourself. . . . If I want people to be on time, I’d better be on time.”
Setting appropriate standards of behavior and performance are part of the challenge of modern management, most executives agree.
