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Executive Dilemmas

Organisation leaders have endured a rough ride recently.  Barely a day passes when business chiefs are not accused of greed – the banking crisis seemingly leaving all private sector executives exposed to vilification.  Senior public servants are not immune either; attacked for allegedly irresponsible spending or precipitating one crisis or another.  How long before charity bosses are also metaphorically hung, drawn and quartered?

Of course, this aggression was triggered by genuine examples of incompetence and corruption.  Much of it relates to pay, which is usually sufficiently high that public abuse seems a small price for leaders to pay.  But setting reward aside for a moment, are the expectations placed on leaders fair?

I’m not sure they are.  Senior leaders face a far more complex and challenging environment than they did a few decades ago.  But more than that, today’s leaders face a tide of seemingly irreconcilable demands.  Consider a few of these cruel dilemmas:-

  • Modern leaders must build strong teams for their organisations to succeed – but also hold individuals clearly accountable and gallantly recognise where the buck stops.
  • All organisations should be learning organisations, eager to change given experience – but execute flawlessly or face stakeholder wrath.
  • Great leaders engage their people and build motivated teams – but are expected to markedly differentiate followers’ performance at appraisals, and manage out the ‘C-players’.
  • Performance must be reported diligently and risks declared faithfully – but even a hint of a potential problem in an informal email might become ammunition for future adversaries in unforeseeable confrontations.
  • CEOs are expected to post spectacular results within months of arriving – but simultaneously build sustainably high-performing organisations in the long-term.
  • Senior teams must judiciously predict long-term future trends and position their organisations to exploit them – but remain opportunistically nimble at the same time.

Perhaps the labour market is operating as it should; taking on this mêlée is surely worth a pretty price.  But can we rely on the market and its sparkling reward packages to deliver the best leaders?

CEO turnover has risen steadily in recent decades.  Whether they jump or are pushed, many leaders are relieved to leave behind the muddled demands from shareholders, customers, regulators, governments, staff, advisors, auditors, suppliers, analysts, the media, pressure groups and others who watch their every move and fiercely tug them in opposing directions.  Lifestyle choice increasingly drives career decisions.  Some promising leaders are eschewing conventional ambition and leaving the gruelling top jobs to others.  It is a tragic irony that such talent is diverted elsewhere when we need fine leaders now more than ever.

I’m not advocating that the Royal Society for the Prevention of Cruelty to Executives be set up.  But we should care about whether leaders can be successful.  We all want our pension funds to grow and our hospitals to save lives.

It’s tempting to seek external solutions: government intervention, less-greedy financiers or better management research.  But such hopes are surely long-term ones, and unrealistic if they depend on changing market realities.  Perhaps the answer lies with leaders themselves.  They can say, loudly and clearly, what to expect from their organisations: the time horizon over which they aim to maximise performance, the risks they will take, and the trade-offs that will favour one stakeholder group over another.  In short, they must say what will be sacrificed in order to excel.  Choice kills dilemmas.

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