Judging by news headlines — not to mention
convictions — from the last few years, it’s no surprise that
most Americans take a decidedly inglorious view of today’s chief executive
officer.
The rap: They’re egregiously overpaid. Or
incompetent. Or incapable of telling the truth. Or some truly loathsome
combination of all three. Even Whole Foods leader John Mackey, a “good
guy” CEO perceived to be America’s best-performing underpaid
chief exec, has been shown to have serious defects as a leader and isn’t
the hero figure that even corporate governance gurus thought he was. Mackey’s
recent fall from grace is only the latest example of how public faith in the
office has been undermined.
The Overall Report Card
CEOs got high marks for smarts and ethics, but low grades for accessibility and compassion
Of course, public perception often doesn’t
square up with the reality of running a business. That’s one reason
BNET recently commissioned an exclusive survey of 1,500 U.S. business managers
and executives — arguably the CEO’s toughest critics and those
whose opinions matter most — to find out what they really think of
the top boss: What are their CEO’s key strengths and vulnerabilities?
How well — or how badly — do they delegate, lead, inspire,
share credit, make decisions, handle crises, foster good ideas and
collaboration, and train future leaders?
The results, which we share and analyze in this
exclusive BNET report and accompanying survey results, show that senior managers and execs
don’t consider their CEOs to be the fools and ne’er-do-wells
that outsiders (and often shareholders) think they are. These leaders get high
marks in many categories. By the same token, there’s a gap in
perception even from inside a company’s management circle: The BNET
survey shows that CEOs aren’t doing nearly as good a job as they
think they are. Grading their head honchos on a list of attributes that
included ethics, leadership, and approachability, employees gave CEOs a
lukewarm C+ grade overall. When the CEOs graded themselves, their grade jumped
to a B+. CEOs got the worst marks from employees judging them on social skills
like the ability to inspire, be compassionate, and approachable.
The report card did hold some good news for top
execs. They got very high marks for the passion they had for their business,
ethics, and intelligence. They also got mostly As and Bs for delivering
results. By a large majority, both employees and CEOs agreed with this
statement: “CEOs and company presidents tend to be overpaid.”
Interestingly, in every criterion we asked about
— from ethics to communication — the CEO’s
self-assessment was far rosier than the appraisal of those who worked for them.
CEOs were almost twice as likely as employees to “strongly agree with
the statement: “Most CEOs and company presidents do a good job
leading there organizations.” Frequently, the high marks CEOs gave
themselves had little relationship to the scores given by employees. For
example, CEOs and employees dramatically disagreed on whether the CEO was
listening to innovative ideas from lower-level staffers. Nearly three-fourths
of CEOs said that good ideas “always” or “often”
percolated up through the organization, while roughly a third of employees
agreed with that assessment. More disturbing still was that nearly 25 percent
of the rank and file thought good ideas “never” or “rarely”
made their way up the food chain.
BNET reviewed the survey with a number of business leaders,
academics, and experts to get to the bottom of the results —
particularly that troubling gap between the CEOs’ self regard and the
opinions of their employees. Do CEOs have blind spots that make it impossible
to get an objective view of their own performance? Are subordinates judging the
CEO unfairly? Does a CEO have to be well-liked by his or her employees to do a
good job?
CEOs might dismiss the evaluation of employees as inherently
unfair. After all, employees don’t see everything a CEO does, and
chief execs often are held accountable for problems entirely out of their
control. If a storm in Timbuktu disrupts the supply chain, the CEO is likely to
take the hit. Well-meaning CEOs may fall under suspicion simply because so many
other unethical execs are making front-page headlines. Regardless, all of the
experts we talked to warned against the natural tendency to explain away bad
news.
“It doesn’t matter who’s right
or wrong,” says Michael Abrashoff, a former Navy captain and the author
of “It’s Your Ship: Management Techniques from the Best
Damn Ship in the Navy.” “Negative perceptions about the CEO
are a signal that not everyone is aligned with where the CEO wants to take the
company. That is a problem worth taking seriously.”
“The issue here is not whether the evaluation of
the CEO is fair or not,” adds William Wallick, who spent two decades in
corporate human resources and now teaches business management courses at the
University of Scranton in Pennsylvania. “The employees’
perception of the CEO is a reflection of the employees’ reality. When
an employee gives low marks to a CEO, it means that the boss is not meeting
their needs. It is not about whether the evaluation is fair or who is to blame.
The issue is how do you fix it?”
Behind the Numbers
BNET's CEO Report Card was culled from over 1,500 completed surveys among BNET registered users. Respondents came from a wide range of industries including health care, finance, and manufacturing. The majority work for large companies: nearly half of respondents worked in organizations with 1,000 people or more. And the vast majority — over 75 percent — listed themselves as senior managers or higher.