A Culture Of Dependency
If one person supplies all of the critical decisions, then why should the other members bother to learn how to think for themselves? At the same time, this situation also discourages members from speaking out and challenging the approaches deemed necessary by the CEO. The culture creates a dependency by lower level staff members on the CEO and the top executive team. This weakens collaboration throughout the organization, which simultaneously weakens the long-term value that the corporation can add to current and future customers. As a result, the incredible compensation package for the individual CEO has a counterproductive impact on the overall value created by the organization as a whole. Look at the decline in value at The Walt Disney Company, Apple Computer, and many others as an example of this.
The ironic thing about these wildly rising CEO packages is they all began in the mid-1980s with the story of Lee Iaccoca and the financial crisis at Chrysler. He decided to appear on commercials discussing the way Chrysler would win back customers and save itself from bankruptcy in order to bring a human quality to the turnaround. As a result of this visual image, American businesses began to believe that one individual could and should drive corporate success. This fallacy in business thinking has run its course. Corporations are not great because of a single individual. They achieve greatness by the collective efforts of the members of the organization. Is the CEO critical to its success? Absolutely. Should the CEO be compensated well? Absolutely. Should the CEO be paid 5,000 to 10,000 times as much as the average employee at the organization? Absolutely NOT! The disease of the "The Superhero CEO" has run its course. Corporate boards and employees must have the courage to step up and remove this cancerous mindset before it wipes out the long-term value generated by the corporation.
Dan Coughlin is president of The Coughlin Company, Inc., a firm that specializes in enhancing the effectiveness of top performing executives, groups and organizations.
About Dan Coughlin
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Dan Coughlin teaches practical ideas on how to improve business performance. He is a business keynote speaker, management consultant, executive coach, and author of four books on leadership, sales, branding, and innovation. His books including Accelerate, Corporate Catalysts, The Management 500, and Find a Way to Win. His clients include GE Capital, McDonald's, Coca-Cola, Marriott, Boeing, Abbott, Toyota, Subway, Kiewit, Prudential, Denny's, and the St. Louis Cardinals.
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