Monday, September 8, 2014

Why CEOs are a less responsible person in the company

The main reason why a CEO gets a lot of money is usually because he is responsible. Responsible for the quarterly results, for the profits, for the employees, for nearly everything. And most would say that this is the biggest burden for them, to have all this responsibility.



But are they actually responsible? First of all, many CEOs, in particular those in big companies, try to hide them from any decision making based on actual facts. They have so many layers of responsibility in their management that they sometimes barley know what they actually produce. They have people who prepare the decisions, and the CEOs job is basically act as he (or she) did it himself.

When it comes to a crisis, the CEO is usually the first to run away from all responsibilities. He will cut jobs, to punish those who he thinks are responsible for the disaster. Or he blames the board, the shareholders, the banks. Rarely you see a CEO who says "I fucked up".

Responsibility in companies is on the shoulders of the ground staff. They make the money. They produces awesome products and they make sure they are shipped in time. They even know the customers. And yet, they are the first to go if something goes wrong.

The risk a CEO has these days is minimal. The bigger the company the more money you get, and thats enough for a hell lot of parachutes. You may loose a bit in stock options, maybe a big chunk when you company goes down at Wall Street, but this will seldom be life threatening.

And then look at average Joe in the warehouse. His risk everyday is not to loose some stock options. His risk is his income that provides money and food for a family and pays a home. If Joe does something wrong, his life will change, often in a bad way.

The CEO risks to be fired. So what? He will call his driver, get to the next bar, have a whiskey for 30 Dollar and starts calling some friends to tell them he is available. He doesn't even need to check his bank account.

And yes, of course there are CEOs who started the company they are working at, who are shareholders, who are dedicated and actually nice. But most of those I met aren't. They are far from what is actually going on in their company. Guess why Undercover Boss is such a success? Because even in middle size companies you have this problem that too many levels of hierarchy makes the CEO isolated. And isolated people don't have much information to make good decisions.

Since this is a blog, this isn't an article based on a survey or any scientific method. It is my opinion, and I might be wrong. Feel free to discuss and correct me.