CEOs are faced with stressful work environments. The volume of different communications directed at them and the multitude factors they can feel pressurized to juggle, as well as the number of hours of work demanded, can result in overload and reduced effectiveness. A CEO’s attempts to cut down on the number of factors competing for his attention may in the process also lead to him deliberately or inadvertently blocking the views of others to the point of seeming arrogance – the blinkers syndrome. This reduces stress to manageable levels but in the process can result in a CEO leading the company down the wrong path. This article argues that Boards of Directors should free CEOs of excessive expectations in terms of time worked, insist that CEOs take time to stop and think and to seek advice, and require CEOs to spend a reasonable amount of time time away from the office.
I hypothesise that companies which require a CEO’s job to be all encompassing do not increase their chances of success but on the contrary risk their own demise. A natural survival mechanism for a CEO (or anyone) faced with a high stress situation is to dismiss or reframe criticism and contrasting points of view as nonsense or poor ideas or simply become impervious to them. That enables him to free his mind of doubt and fear of being called a “prevaricator”. It gives him peace and sanity and lets him proceed with his own vision. Unfortunately it may also lead to perceptions of arrogance and a lack of approachability. If the CEO by chance happens to be on the right track the company will still do well. However, on average and looking across all companies over time, and especially when industries are undergoing periods of rapid change, the chances are that this approach will send a company down the wrong track. Ultimately that can lead to market obscurity, takeover or even closure.
In this light I noted a report from Fortune entitled “How Hewlett-Packard Lost Its Way”, dated 8th May 2012 which describes how a contender for the CEO job called Ray Lane withdrew from consideration when he was told that the job was all consuming. Mr Lane had young children and other commitments, and did not want to work what he anticipated to be CEO hours or travel much. Presumably the job had been all consuming for previous CEOs and therein perhaps was an indication of one of the underlying problems. Hopefully the current President and CEO Meg Whitman will manage to carve out sufficient thinking space and time to reflect and to receive advice.
A factor which multiplies the impact of the blinkers syndrome is that as human beings we are attracted to leaders with a clear vision of the future path to follow. It appeals to our desire for clarity and simplicity when faced with the world’s complexity and uncertainty. Consequently Boards may be more likely to choose as CEOs persons with a tendency express great confidence in the outcome of future events. The irony of this is, based on 20 years of study by Phillip Tetlock in to the accuracy of forecasters, that it is those forecasters who are most certain about the future who are the worst predictors of it. This derives from the fact that such forecasters tend to be much narrower in their focus and range of experiences but can weave an entire storyline about the future for a given area as a result of their detailed knowledge of it.
That detailed knowledge also makes them more confident when talking about the subject. Human beings are drawn to a good story and confidence so these people get most attention when it comes to forecasts. Few people, if any, want to hear a story if the teller expresses uncertainty about the ending. Thus Boards may tend towards selecting individuals who are overconfident about how future events will unfold and who have a tendency not to encourage or consider alternative points of view sufficiently. This may arise in part from an excessive fixation by those individuals on work related and immediately pressing matters which narrows their focus excessively and reduces the chance that they will step back to think and consider deeply enough.
When it comes to assessing what kind of person will be a successful CEO it is also necessary to be on guard against distorted views of what leads to success in the world. People love to talk and read about successful people. You will not read or hear much if anything about CEOs who are deemed to be average or failures, but mountains of stories will be published about a single outstandingly successful one in the popular press. Consequently where a CEO takes an extreme gamble commercially which is based on what he thinks will happen in the future and which by mere chance pays off even if only in the short term, he will be lauded as a true visionary and someone to follow. Whereas you will hear much less or nothing about the vast majority of CEOs who took extreme gambles and failed other than perhaps the odd story in a business specific publication. Thus the greatest success, which may most commonly be associated with a very confident CEO who substantially ignored those around him, who “bet the farm” on his extreme prediction and who succeeded by chance, distorts our picture of what really works in most situations and can lead to an inappropriate choice of personnel.
In this light, it seems crucial that companies do give their CEOs room to think, should not expect them to work 12 hour plus days, should even demand that CEOs spend time away from work, and should look for balanced thinkers at the selection phase who do not express great confidence about how exactly the future will unfold. That may help to maximise a company’s chance of long term success.