Over the course of my career, I’ve encountered literally hundreds of CEO / Presidents and other executives in organizations ranging in size from very small (less than 10 employees) to multi-billion-dollar, multi-nationals employing thousands. Many of these people have been excellent in their positions while others are long past their ‘best before’ dates. Others should never have been in a position of authority at that, or sometimes any, level. The impact of the CEO business decisions (timing and accuracy) and the CEO personality on the morale of employees and on the organization’s credibility with all stakeholders cannot be understated and often makes the difference between the levels of success or failure the organization will achieve.
In this world of constant change, the CEO must also be able to determine product, market and sales strategy and tactics as rapidly as the change is occurring. If the organization is in a growth or decline, the CEO must also be able to determine effective resource strategies to ensure continued success or survival. Therefore, a CEO could be faced with rapid changes to the competitive environment and changes in the rate of growth simultaneously…and the two may not necessarily be related.
The problem is determining whether the CEO can effectively work in the current environment as well as the future environments that the organization may find itself.
Management Types
My quite unscientific study and categorization of management types is to divide them into three areas: Operators; Managers; and, Leaders.
THE OPERATOR is the most basic type of boss. I characterize this person as reactionary, lacking basic knowledge capital in some areas of the organization and tend to use catch phrases that they’ve picked up along the way to try to show that they know what they’re doing. In other words, they appear to be large ponds of water when they are really shallow puddles. The Operator is not a manager at all…they are bosses and are likely to be very controlling. If this person has an ego or temper, watch out!
A MANAGER understands the continuum of “Plan – Action – Control” and has adequate knowledge capital to be able to know what the next logical action would be in terms of dealing with a gradual change in market or revenue. This person normally has the personality skill set to be able to direct people to meet end goals. They are tactical managers but do not necessarily have the vision that is required to lead change, get the most out of their resources or recognize sudden shifts in their competitive position.
A LEADER is very comfortable in their own skin and don’t have serious issues in letting people know that they don’t know everything. They know where their core competency is and, more importantly, where they need to surround themselves with others that have complimentary core competencies to form an effective management team. By surrounding themselves with talent, they make themselves appear stronger and give themselves the ‘thinking space’ to be able to manage the organization at both strategic and tactical levels. Few people mind working for, or with, a leader. If they ask you to jump, you’ll gladly ask ‘how high’ on the way up because you have confidence in their judgement and personality.
How They Got There
The other category that I apply to understanding the CEO is how they became executives in the first place. Again, I divided this into three paths: The Owner; The Peter Principle; and, The Promoted.
THE OWNER is the CEO because they either own, or co-own, the business. They are the boss because they sign the cheques.
THE PETER PRINCIPLE CEO has been placed into the position for a number of potential reasons. Nepotism (hiring a family member), being a friend of the owner, being promoted because you’ve been in the business forever (best before date is well past) or being the consummate politician (also known as kissing butt) may get this person the title but they are at least one level of authority higher than they ever should attain.
THE PROMOTED CEO is a person that started in business at a substantially lower point in an organization. They have been watched over, motivated, mentored and promoted up the ladder over a period of time when they have shown the aptitude and ability to handle the responsibilities of that next level.
How They Likely Perform
As with anything unscientific, there are exceptions to what I’ve observed. However, when I put the Management Type with the How They Got There into a matrix and then look at how they perform in terms of handling pace of change and growth changes, I come up with the matrix shown and can predict with some certainty how these people are going to perform.
The Owner Group
“OO” The Owner/Operator is going to be okay in a small organization that has very little probability of rapid market changes or changing volume in a hurry. These people are good at operating the corner store or small ‘boutique’ operations (e.g. organizations with less than 10 people). However, growing an organization or reacting to change will present major challenges unless they upgrade their knowledge capital and become effective managers of people and resources. As the business gets steadily larger, or has progressively faster change in market, this person could go from competent to unable to manage and then to the state of becoming a liability to the organization as they botch resource and product decisions.
“OM” The Owner/Manager is going to be okay with steady changes in the growth of an organization. The “Plan – Action – Control” and knowledge capital that they have in the business will stand them in good stead. However, they may mishandle rapid market changes or be unable to react quickly enough to a change in fortune. If they do recognize, or have planned for, change they will likely have considered utilizing outside assistance. If they have some good outside council, they should be able to weather short storms but would need to bring in permanent assistance if the changes continued to rock the boat.
“OL” The Owner/Leader is likely to be focused on the growth of their organization within their vertical. Controlling growth will not be an issue because they will have hired other management personnel that have skill sets that are complimentary. The potential issue for this person is rapid change to their marketplace if they haven’t also invested in outside counsel to assist in identifying change and the proper plans to survive and/or thrive with the changes.
Peter Principle Group
“NO” As long as the organization is in a stable environment, this person will muddle their way through short-term issues. However, this person will not handle growth or change well. They don’t have the knowledge capital or personality to be able to do much. Next to the OO combo, this is probably the worst combination in a CEO that I can imagine in an organization in rapid growth or change mode.
“NM” Due to their management capabilities, these people will be able to handle slow growth or market change conditions. Remembering that they are operating at least one level higher in the organization than they have a skill set to attain, they are likely to err when having to make a decision on rapidly changing situations.
“NL” If this person exists, they are a rare breed. They would only be here under the nepotism criteria of getting into this group and that means that it would be a stroke of good fortune for the person that hired/promoted them into the position for this person to truly be a leader.
Promoted Group
“PO” This is another of the rare breed type as a CEO or executive level manager. An operator, by definition, should not be promoted.
“PM” A person that has been promoted through the ranks and can, at least, follow sound methodologies for planning and controlling the enterprise should be able to manage the organization in times of changing markets and controlled growth. However, they don’t have all of the skills to take the organization to the upper level of its growth potential with the resources at hand.
“PL” Unfortunately, many of us never have the opportunity to work for a person that has the Knowledge Capital and people skills that a PL exhibits. This person knows their core competencies and has surrounded themselves with complimentary skill sets. Beyond understanding the continuum of “Plan – Action – Control”, they invest in continuous improvement of key performance indicators, technology and methodology and utilize organizational resources – internal and external – to ensure that outside influences to the organization are monitored and appropriate action taken when shifts occur.
Contributing Factors
There are some contributing base personality factors that can make the management type an extreme case. Anger management issues, inappropriate language, ego and pride can turn situations from bad to ugly. These people should not show up in the Promoted Group but regularly show up in the other two groups. The worst possible CEO situation I can envision is the “OO” type person in a growth or rapid change mode that has any or all of these attributes. This person would not just be incompetent they could easily become a legal liability to the organization as stress to maintain control mounts. Conversely, an “OO” that finally figures out that they are over their heads in managing the organization and does not have these negative personality traits could eventually become an “OL”.
Summary
As I’ve mentioned, the above observations at just that…an informal study that I’ve conducted over my career spanning more than three decades. It’s important to all stakeholders in an organization to understand that the type of person leading from the CEO/President position sets the tone for the entire organization because change, when needed, has to start from the top. It’s also important for employees to understand the type of person they are working for, the speed of the change and growth factors affecting the organization and understand the impact that these factors will have on their quality of life.
I’ve been an employee working for a few of these types of people and have observed most of the others as a consultant. I was fortunate to begin my career working with a “PL” and enjoyed the mentoring approach which helped me not only climb the promotional ladder, but also showed me how to get the best performance from people…there wasn’t anything that he asked that I wouldn’t get done. I have also worked for an “OO” who also had and ego and a temper in a high growth situation…he couldn’t pay me enough to stay.
To papa-phrase a quote from Confucius: “Choose a management style you can work with and you never be stressed a day in your life”. Your upper management’s type and personality will have a direct impact on how many days you feel stressed and underappreciated.
About the author
Ken Cowman is Managing Director of Emercomm Business Consultants Inc. of Mississauga, Ontario ( www.emercomm.com ) . Ken has over 40 years of business experience with over 25 years in C-level positions. He can be reached via email kcowman@emercomm.com and his career profile can be found on LinkedIn www.linkedin.com/profile/view?id=13440900&trk=tab_pro
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