Here is what Henry Kissinger, former United States Secretary of State once said: “The nice thing about being a celebrity is that when you bore people, they think it’s their fault.”
People Management Issues with Robert Mandeya
Many a time when we hear the term celebrity, thoughts of actors, sports stars and musicians conjure up in our minds. Now let us explore the term “celebrity” in the context of a chief executive (CE) of an organisation. Here we would like to understand the benefits and costs of CE celebrity status to the organisation. Further, we will also attempt to define some types of CEs based on differences in fame and reputation.
In the world today, we have some CEs, such as Bill Gates, Oprah Winfrey, Martha Stewart and Donald Trump, who have achieved celebrity status. Therefore, celebrity CEs are not a new phenomenon. In the early twentieth century, industrial barons such as Henry Ford, John D Rockefeller, and Cornelius Vanderbilt were household names. However, in the current digital era of mass and instant media, celebrity CEs have become more prevalent and visible.
Benefits and costs of CE celebrity
There are both benefits and costs associated with CE celebrity. As the quote from Kissinger suggests, celebrity confers a mystique and reverence that can be leveraged in a variety of ways. CE celebrity can serve as an intangible asset for the CE’s firm and may increase opportunities available to the firm. Hiring or developing a celebrity CE may increase stock price, enhance a firm’s image, and improve the morale of employees and other stakeholders.
However, employing a celebrity CE also entails risks for an organisation. Here is the catch; Increased attention to the firm via the celebrity CE means any gaps between actual and expected firm performance are magnified. Further, if a celebrity CE acts in an unethical or illegal manner, chances are that the CE’s firm will receive much more media attention than will other firms with similar problems.
There are also personal benefits and risks associated with celebrity of being CE. Celebrity CEs tend to receive higher compensation and job perks than their colleagues. Celebrity CEs are likely to enjoy increased prestige power, which facilitates invitations to serve on the boards of directors of other firms and creates opportunities to network with other “managerial elites”. Celebrity also can provide CEs with a “benefit of the doubt” effect that protects against quick sanctions for downturns in firm performance and stock price.
Inversely, celebrity also creates potential costs for individuals. Celebrity CEs face larger and more lasting reputation erosion if their job performance and behaviour is inconsistent with their celebrity image. Celebrity CEs face increased personal media scrutiny, and their friends and family must often endure increased attention into their personal and public lives. Accordingly, wise CEs will attempt to understand and manage their celebrity status.
Types of CEs
Icons are CEs possessing both fame and strong reputations. The icon CE combines style and substance in the execution of his or her job responsibilities. Mary Kay Ash, Richard Branson, Gates and Warren Buffett are good examples of icons. The late Ash founded Mary Kay Cosmetics Corporation. The firm’s great success was partly attributed to Ash’s unconventional motivational methods, such as rewarding sales. Partly because she emphasised helping other women succeed and ethical business practices, Mary Kay Ash also had a very positive reputation.
Gates, founder and former CE of Microsoft, also has fame and a largely positive reputation. Gates is a proverbial “household name” in the tradition of Ford, Rockefeller, and Vanderbilt. He also is routinely listed among Time magazine’s “100 Most Influential People” and has received “rock star” receptions in India and Vietnam in recent years.
Another type of CEs are those who display high levels of relative fame, but low levels of reputation and these are in the group called scoundrels. These CEs are well known but vilified. The late Leona Helmsley was a prototypical scoundrel.
Helmsley’s life was a classic rags-to-riches story. Born to immigrant parents, she became a billionaire through her work as the head of an extensive hotel and real estate empire.
While certainly famous, her reputation was anything but positive, as reflected by her nickname: the Queen of Mean. During Helmsley’s trial for tax fraud, her housekeeper quoted her as proclaiming: “We don’t pay taxes. Only the little people pay taxes.” Helmsley’s apparent arrogance, combined with her cruelty to employees and her reputation as the ultimate workplace bully, cemented her position as a scoundrel.
In Zimbabwe, the corporate governance scandals of late 2010 to date revealed several CEs as scoundrels. We have men and women who rose to prominence as their firms’ success and stock prices soared but were undone by dubious activities. Further afield, Lay was once revered as the son of a poor minister who founded Enron and built it into a giant in the energy business.
In 2001, however, he became the face of corporate abuses in the US after Enron’s collapse led to scenes, captured on television, of employees left jobless and with retirement accounts full of worthless Enron stock. Lay was convicted of fraud in 2006 but died before sentencing.
Then we have the hidden gems type of CEs who lack fame but possess positive reputations. These CEs toil in relative obscurity while leading their firms to success. Their skill as executives is known mainly by those in their own firm and by their competitors.
In many cases, the firm has some renown due to its success, but the CE stays unknown. For example, consider the case of Anne Mulcahy. Mulcahy, CE of Xerox, started her career at Xerox as a copier salesperson. Despite building an excellent reputation by rescuing Xerox from near-bankruptcy, Mulcahy eschews fame and publicity. While being known for successfully leading Xerox by example and being willing to fly anywhere to meet a customer, she avoids stock analysts and reporters.
Lastly, we have the silent killers type of CEs. These CEs are overlooked and ignored sources of harm to their firms. While scoundrels are closely monitored and scrutinised by the media, it may be too late before the poor ethics or incompetence of the silent killers is detected. In this sense, silent killers are sometimes worse than scoundrels.
Mandeya is an executive coach in human capital development and corporate education, a certified leadership and professional development practitioner and founder of the Leadership Institute for Research and Development (LiRD). — email@example.com, firstname.lastname@example.org or +263 772 466 925.