The CEO as Leader – SAGE Business Researcher

Is taking charge a teachable skill?

Executive Summary

To an ever greater degree, CEOs are being judged on their leadership abilities as well as their managerial skills – and are being held accountable for the health of their company’s culture. Some, such as Starbucks’ Howard Schultz, are celebrated as success stories. Others, including Travis Kalanick of Uber and John Stumpf of Wells Fargo, bear the brunt of corporate scandals. This view of the CEO as leader, not just manager, is a relatively new phenomenon in the history of U.S. business – it was first articulated by Harvard business professor Abraham Zaleznik in 1977 – but it has taken hold to the point where few question it today. “The organization reflects the behavior and characteristics of the CEO, and that establishes the culture,” wrote venture capitalist Peter Levine in summing up the prevailing view.

Here are some key takeaways:

The differences between leaders and managers are so great, according to Zaleznik, that leaders have “more in common with artists … than they do with managers.”
The common element among successful business leaders, said management consultant Peter Drucker, is not charisma but rather a capacity to diagnose needs and develop plans to meet them.
Many business schools teach leadership, but there are great variances in how they approach the subject, and some question whether it can be taught at all.

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Resources for Further Study

Bibliography

Books

Finkelstein, Sydney, “Superbosses: How Exceptional Leaders Master the Flow of Talent,” Portfolio / Penguin, 2016. A Dartmouth College professor of management details how leaders find, lead and lose talented employees.

George, Bill, et al., “HBR’s 10 Must Reads on Leadership,” Harvard Business School Publishing, 2011. Ten classic Harvard Business Review articles on leadership issues.

Grove, Andrew S., “Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company,” Doubleday, 1996. The founder and former CEO of Intel examines his corporate failures as well as his successes in an autobiography that is still recommended today by scholars of leadership.

O’Boyle, Thomas, “At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit,” Alfred A. Knopf, 1998. A veteran business journalist offers a critical evaluation of the CEO whom many consider one of the greatest in history.

Welch, Jack, with John A. Byrne, “Jack: Straight from the Gut,” Warner Business Books, 2001. The CEO recounts his two decades running General Electric after starting there as an entry-level engineer.

Articles

Collins, Jim, “The 10 Greatest CEOs of All Time,” Fortune, July 21, 2003, https://tinyurl.com/mv3fhs. A leading writer on management shares his list of top corporate leaders and explains the four criteria he used to evaluate them.

Hough, Jack, “The World’s Best CEOs: An Exclusive Barron’s List,” Barron’s, March 25, 2017, https://tinyurl.com/y8f4r84d. A leading source of investment news outlines what makes a great CEO.

Katzenbach, Jon, and DeAnne Aguirre, “Culture and the Chief Executive,” strategy + business, May 28, 2013, https://tinyurl.com/ybhpzysb. Two Booz & Co. consultants say becoming an “effective cultural chief executive” requires more than acknowledging the importance of culture at a company, instead engaging in it and even creating it.

McDonald, Duff, “Can You Learn to Lead?” The New York Times, April 7, 2015, https://tinyurl.com/ya8cp65d. A journalist surveys the landscape of leadership education at America’s top business schools.

Zaleznik, Abraham, “Managers and Leaders: Are They Different?” Harvard Business Review, May/June 1977 (reprinted January 2004), https://tinyurl.com/q3vc73s. A Harvard professor produced the seminal article that changed the view of CEO from manager to leader and outlined the differences between the roles.

The Next Step

Company Practices

Carmichael, Sarah Green, “Microsoft’s CEO on Rediscovering the Company’s Soul,” Harvard Business Review, Sept. 28, 2017, https://tinyurl.com/y75r9az3. Microsoft CEO Satya Nadella revitalized a company that was struggling to compete with Google and Apple through his focus on changing the company’s culture.

Fessler, Leah, “We tracked Jeff Bezos’s use of ‘we’ versus ‘I’ over 20 years to see how he’s changed as a leader,” Quartz, April 17, 2017, https://tinyurl.com/y9y67qka. An analysis of Amazon CEO Jeff Bezos’s yearly letter to shareholders reveals that his use of “I”instead of “we” has increased, illustrating that as the company grew, so did his sense of responsibility for it.

McGregor, Jena, “Elon Musk is the unusual CEO who says his stock is overvalued,” The Washington Post, May 22, 2017, https://tinyurl.com/yavxp8t8. Tesla CEO Elon Musk, displaying what some analysts call his “unscripted style,” said his company’s market capitalization might be overvalued. He also pushed back against reports that conditions in a Tesla plant were unsafe.

CEO Scandals

“Equifax CEO steps down amid hacking scandal,” The Associated Press, New York Post, Sept. 26, 2017, https://tinyurl.com/y9shs5bd. Equifax CEO Richard Smith’s departure came in the wake of a data breach that exposed the personal information, including Social Security numbers and birthdates, of millions of people.

Popper, Nathaniel, and Katie Benner, “‘It Was a Frat House’: Inside the Sex Scandal That Toppled SoFi’s C.E.O.” The New York Times, Sept. 12, 2017, https://tinyurl.com/y7dhxl4h. The chief executive of online lending startup Social Finance, Mike Cagney, will leave by the end of 2017 following allegations of sexual harassment.

Rucker, Patrick, and Dan Freed, “Senators grill Wells Fargo CEO over scandal, forced arbitration,” Reuters, Oct. 3, 2017, https://tinyurl.com/ybu2qb7o. Members of the Senate Banking Committee challenged Wells Fargo CEO Tim Sloan to allow customers affected by the creation of unauthorized accounts to sue the bank rather than submit disputes to arbitration.

Organizations

Council of Institutional Investors
1717 Pennsylvania Ave., N.W., Suite 350, Washington, DC 20006
1-202-822-0800
www.cii.org
@CouncilInstInv
Coalition of corporate, public and union employee benefit funds and endowments that has advocated for improved corporate governance standards and shareholder rights since 1985.

Drucker Institute
1021 N. Dartmouth Ave., Claremont, CA 91711
1-909-607-9212
http://www.drucker.institute
@DruckerInst
Formed in 2006, the institute used the archives of management thinker Peter F. Drucker to create “a social enterprise” that aims to help executives “move quickly from ideas to action to results.”

EY Think Tank for Business Performance & Innovation
5 Times Square, New York, NY, 10036-6530
1-212-773-3000
http://performance.ey.com
@EY_Performance
This business think tank, started in 2008 by the company formerly known as Ernst & Young, publishes articles and case studies on current management challenges.

Manhattan Institute for Policy Research
52 Vanderbilt Ave., New York, NY 10017
1-212-599-7000
www.manhattan-institute.org
@ManhattanInst
Free-market think tank founded in 1977 that maintains Proxy Monitor, a database of shareholder proposals, and publishes regularly on corporate matters.

University of Chicago Booth School of Business
5807 S. Woodlawn Ave., Chicago, IL 60637
1-773-702-7743
www.chicagobooth.edu
@ChicagoBooth
Booth says its Leadership Effectiveness and Development (LEAD) program was one of the first experiential leadership development programs at a major business school.

U.S. News & World Report
1050 Thomas Jefferson St., N.W., 4th Floor, Washington, DC 20007
1-202-955-2225
www.usnews.com
@US_14062207466
The digital news source and former weekly news magazine offers an annual ranking of U.S. business schools.

DOI: 10.1177/237455680330.n1