Why do CEOs keep getting put in a box?

I have just finished two days of meetings discussing Founder’s MentalitySM with founder-led companies throughout Bangalore and am writing this late at night in a small coffee shop in the Bengaluru International Airport. My flight to Mumbai is delayed: The monsoons have hit India hard this year. 

In the discussions of the past two days, a frequently raised topic was how CEOs are increasingly coached to stay in their box—to work through the organization structure and not directly with the front line. While this empowers others in the organization, it also can lead to a lack of direction within the company and a loss of any sense of what is truly important.

A central theme in our work on Founder’s Mentality is that leaders implicitly accept a trade-off as their companies grow. To gain the benefits of scale, they allow the company to lose its Founder’s Mentality—the insurgent mission, the owner mindset, the maniacal focus on the customer and the front line that defined the early years of the company. This raises some fascinating questions: Why do the founder and the leadership team accept these trade-offs?  What forces cause this? We refer to these forces as the westward winds.

westward winds

“Lost voices from the front line” and other forces push companies to accept harmful trade-offs as they grow. Learn more at foundersmentality.com

One of these winds is called “Lost voices from the front line” and here’s what happens: As the company grows, its priorities begin to blur and its focus on the front line begins to wane. Discussions about customers stop focusing on the needs of real customers as reported by the frontline employees who truly understand their needs and instead shift to pleasing the “average customer” (who exists only as a mathematical abstraction). Instead of choosing among priorities, companies begin to balance them. Instead of focusing overwhelming resources on the places in the front line where customers can truly be delighted, the company instead spreads those resources fairly and evenly across multiple initiatives, so that everyone feels valued and important.

The executives I spoke to in Bangalore have seen how easy it is for companies to begin drifting in this direction, and they know what it’s like to have advisers tell them to stay in their box. Such coaching is always well-intended, but it ends up emasculating CEOs. The conversation always begins with the need to make the organization more professional. Advisers tell the CEO to hold regular management meetings, to manage to an agenda, to work directly with direct reports and trust those leaders to communicate with the rest of the organization. They tell the CEO to balance his or her time and to make sure every part of the organization feels valued, feels important.

So what’s wrong with that? Isn’t it important to professionalize the management structure as a company grows? The answer is yes, it is, but these steps come at a cost: The CEO is muzzled and the organization loses the benefit of a clear voice describing what is essential to the company mission. It loses the voice that reminds everyone all the time about the customer who matters above all else and about what cannot be compromised. The sense of urgency, the owner mindset and the maniacal focus on the customer and the front line are lost in a misguided quest for balance.

A balanced view is seductive, but it is wrong. Balance prevents the leader from focusing and overwhelming problems with his or her undivided attention. It prevents the CEO from signaling to competitors that the company won’t tolerate any further investment by them in its businesses.  Balance prevents CEOs from signaling to their own organization that market share loss won’t be tolerated and that the CEO will do absolutely anything it takes to prevent one customer defection.

Balance says everything matters, but when that’s the case, it won’t be long before nothing matters. To avoid that, CEOs need to get out of the box all those well-meaning folks want to stick them in. They need to stir up a little trouble, create some waves and remind folks of who’s in charge. As long as they are acting on behalf of their customers, that is no bad thing.

This entry was posted in The paths to Great Repeatable Models, The westward winds by James Allen. Bookmark the permalink.

About James Allen

James Allen is a senior partner in Bain & Company's London office and recognized as a leading expert in developing global corporate and business unit strategy. He is co-head of Bain’s Global Strategy practice and a member of Bain & Company's European Consumer Products practice. He is co-author, with Chris Zook, of Repeatability (HBR Press, March 2012) and Profit from the Core (HBR Press, 2001 and 2010).

2 thoughts on “Why do CEOs keep getting put in a box?

  1. { To gain the benefits of scale, they allow the company to lose its Founder’s Mentality—the insurgent mission, the owner mindset, the maniacal focus on the customer and the front line that defined the early years of the company. This raises some fascinating questions: Why do the founder and the leadership team accept these trade-offs? What forces cause this? }

    To a founder it is not work . . . it is life.
    You don’t go on vacation, you buy a new printer.
    You don’t go out on the weekends, you sit at home and try to figure things out.
    You are not regulated by normal business hours.
    If you figure out an answer at 3:47 am , you can get right to work on it.

    To an employee, it’s not life . . . it’s just work.
    Monday thru Friday. 8 am to 5pm.
    On Saturday we are going to Disneyland .
    On Sunday we are going to the football game.
    3:47 am , I’m sleeping, don’t wake me up , I have to get up and get ready for work in 2 hours.

    Why do founders and the leadership team accept the trade off ?

    It’s easier for a founder to come to the realization that work . . . is just work.
    Versus trying to convince an employee that it’s not just work . . . it’s more then that.

    In theory, a CEO is supposed to close the gap.
    Be the bridge between, founders/owners and employees.

    To many times though, CEO’s never acclimate or transition away from work becoming anything more then just work.
    To them it’s a paycheck, it’s a stock option, an opportunity to take a turn being ” The Leader “.

    Large, well established companies , counter this measure by treating their CEO’s like guest at a 5 star hotel.
    Check them in, stick them in the presidential suite, give them unlimited room service, and then when a sacrificial lamb is needed , check them out, and send them on their way.

    To employees and the viewing public it looks like decisive and affirmative action is being taken.
    We fired our CEO, what more do you want ?

    Under these terms, there is a longterm strategy involved when keeping the CEO in a box.

    • [“It’s easier for a founder to come to the realization that work . . . is just work.
      Versus trying to convince an employee that it’s not just work . . . it’s more then that.”]
      Great insights!
      I wonder, though,m if there isn’t a missing piece: if perhaps “purpose: is what closes the ‘strategy–resources–work’ loop, and makes passion contagious. If so, then to the degree that Founders are “put in a box”, they are unable to effectively articulate that purpose–nor are they able to personally share their passion. The relationship between the Founder and the organization (originally described by their passionate purpose) becomes stale, until eventually, it can eventually only be approximated by the objective, quantifiable measure of profit.

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