The myth of the celebrity CEO

2008

They might make great newspaper copy, but high-profile "celebrity" CEOs brought in to deliver rapid results often have exactly the opposite impact.

Far from being great for a company's bottom line, celebrity CEOs can often be a triumph of superficial glamour over real results, according to global consultants BlessingWhite.

"Despite their best intentions, so-called celebrity CEOs can easily undermine performance because of all-too-predictable mistakes," said BlessingWhite CEO Christopher Rice.

"They come in bent on immediate change or raising the stock price. But if they don't understand the culture they are working with, they end up harming the very organization they set out to strengthen in an attempt for short-term gains."

While they make headlines, argued Rice, celebrity CEOs and their management teams frequently find themselves disconnected from the organization they are meant to be turning around.

"They're so intent on making their own mark that they don't pay attention to conserving key aspects of the organization's culture. Our research has shown that a healthy organizational culture can serve as the foundation for workforce engagement. This is critical for sustaining a business through good and bad times."

And while – despite all the media hyperbole that often surrounds them – no one person can ever be responsible for the success of an entire organisation, that same individual can certainly cause more than their fair share of damage along the way.

According to Christopher Rice, there are five common pitfalls that befall celebrity CEOs – with ego and a failure to listen a common theme connecting them.

First, he said, celeb CEOs often try to impose a copycat culture, making the mistake of trying to replicate the strategies of the market leader or recreate the culture of their last firm without regard to the culture already in place.

What they forget is that mission and values form the core of an organization's culture and should be authentic and unique to afford competitive advantage.

Compounding this, many also seem allergic to communicating. They think they can conduct a few town-hall meetings and call it a day. But by failing to state and restate what the organization stands for, as well as their strategies and values, they risk the impact of their message being ignored, with most employees thinking the speech is just for the sake of investors and analysts, not core to the organization's mission.

Also guaranteed to undermine a CEO is any hint of hypocrisy at the top. Actions speak louder than words, and a CEO's failure to exemplify core values will not go undetected.

And while most employees do not feel safe challenging their leaders' decisions and behaviors, they will certainly move on if they disapprove of goings-on the boardroom.

Another common mistake is forgetting that success and culture change can only come about if the whole team is engaged and behing it. But frequently, CEOs view mid-level managers as being responsible for business results only, with culture issues left to senior leadership or the HR department.

Finally, Rice said, some CEOs place too much faith in empty labels and are unable to make these intangible terms real for employees throughout the organization.

It's all very well taking about things like integrity, respect, customer first, innovation and risk-taking, he said, but it is the definitions, not just the labels, that shape employee behavior.

"Every organization has a culture, whether leaders actively shape it or not," said Rice.

"If cultivated around a compelling mission and core values, culture can be a CEO's secret weapon. If ignored, an organization's culture can undermine new ideas for growth, spit out the people who don't fit and survive long past the celebrated leader who chose to misjudge its importance."