Who’s the best CEO in America?
Given its current bankruptcy, it might be easy to forget that General Motors was once the Colossus of the business world, and that Alfred P. Sloan (that’s him on the cover of TIME) was regarded in his own day not merely as a great executive, but as one of the greatest business leaders of all time. This has me thinking of a question that I’d like you to answer in the comments:
Who’s the best CEO in American business?
Related questions come to mind thanks to the Atlantic Monthly’s recent article, “Do CEOs Matter?”:
How much do the best CEOs matter to their businesses?
Why?
When do they matter most?
I look forward to having your thoughts on these questions.
~
Image via Beth Kanter, shared under a Creative Commons license.
Category: Executives, ManagementIf you liked this post, please consider subscribing to the RSS feed so you can receive future articles delivered to your feed reader.
10 Comments so far
Leave A Comment
I’ll submit Steve Jobs, Jeff Bezos, and Warren Buffett.
I can’t articulate why CEOs matter, except to say that every company seems to have one, and that the good ones are able to keep their companies relevant and successful over the long haul.
Good choices, Geoff. I’m on record here as a big Buffett fan, and Bezos may be the ultimate model of a geek building a business that adapts & scales.
Jobs, to me, offers a much less replicable model than the other two.
If you haven’t already read it, the Atlantic article I cited in the post is worth a read in terms of how good and bad CEOs affect their companies’ fortunes.
Ah, two questions. First, who’s the best CEO? Beats me. The fact is that there are no clear criteria for “best” and there are thousands of CEOs toiling in relative obscurity compared to the few who get covered in the business press.
Heard of Charles Koch? He’s CEO of Koch Industries. It’s the largest privately held US firm and one with an enviable growth rate. But Mr. Koch is more interested in running his company than publicity and toils in Wichita where there aren’t a lot of reporters for the mainline business press.
Do CEO’s make a difference? The Atlantic article tried to answer that question. It’s the wrong question because it assumes that there is a single answer. Some CEOs have important impact by creating systems that allow their company to function without the need for a genius CEO. Think Toyota. A CEO who leads a successful turnaround probably has a major difference. Think Lou Gerstner at IBM. And there are CEOs who make a negative difference. Think of those GM CEOs who agreed to the labor agreements and strategic choices that everyone now decries as “foolish.”
Thanks for the thoughtful comment, Wally. I’m very much in agreement about the CEOs who toil in obscurity. (Or relative obscurity — I knew who Charles Koch was, but then again I’m a business geek.) One of my favorite examples: James Morgan, who built Applied Materials into the top chip-equipment firm in the world. He’s a legend in that world, but hardly known at all outside of it.
I don’t agree that “Do CEOs make a difference?” is the wrong question. Yes, there are many answers based on different situations — turnarounds, regulations, market conditions, size of firm, etc. But many fruitful inquiries in the sciences and social sciences (including management “science,” such as it is) begin with intentionally simplified/simplistic questions like that. So long as you don’t get stuck on the idea that there must be a single answer to the question, you’re fine — and I think the Atlantic piece achieved that.
Thanks, Tim. I disagree with you on whether the Atlantic article comes to that conclusion, but I don’t mean that to imply criticism of the article which well-researched and well-written.
As long as we’re playing, Name-the-Obscure-CEO, I’ll throw in the name of Norman Asbjornson, CEO of Aaon, a manufacturer of heating and cooling gear based in Tulsa. He’s been there since the late 80s and overseen steady growth.
Wally, please bear with me as I look back through Collingwood’s article and think this through. Doesn’t the last section of the piece reflect the variety of potential answers arising from his central question?
Earlier in the piece, he makes clear that he thinks we’ve become too obsessed with the role of the CEO, and that in many cases managers may be interchangeable. Up to that point, he is stuck on one central question, and suggests a single basic answer to it.
But in the last section, he introduces (beneficial) compexity by augmenting his original question with “When does leadership matter?” — and then unfolds the distinction between “Figureheads” and “Unconstrained Managers.” And although he addresses it only briefly, he does indicate the range of difference in executive leeway that exists across industries.
In sum: it seems to me that he *does* leave room for multiple answers to his original question. You don’t agree? (And what am I missing?)
OK, Tim. I need to start by saying that I think there are often no right answers to things like this and there are often differing interpretations of the same data. That may be what’s happening here.
Collingwood’s article is excellent because he covers a broad range of issues. But I take his core argument to be that evidence does not support the idea that CEOs make a dramatic difference. He selects his evidence based on that.
The “evidence” in question turns out to be mostly academic studies. He has to go back 37 years to find his core study. That study only covered 167 firms and has been questioned by many scholars, which Collingwood notes.
The problem is that social science studies, even the best of them, are constrained by time, sample size and metrics. Consider the 1972 study. It deals with the performance of American firms forty years ago. The economy was vastly different then. American companies had totally different global and regulatory landscape to deal with.
Even so, there are no clear metrics for “success” or “difference.” So the researchers have to do some mathematical voodoo to come up with their findings. That’s fine as far as it goes, but it can’t reach the situation such as GE’s under Welch. The major impact of Welch’s tenure may result from the changes he brought to leadership development. Those won’t show up for a while.
To his credit, Collingwood does ask the “when does leadership matter” question. There are two things he doesn’t do that I think he should have.
First, he doesn’t give credit where it’s due. To select quotes that imply that Jack Welch didn’t do much at GE or that a dog could have run GE is ridiculous. To discuss the environmental factors that made Welch’s job easier without discussing the real challenges he faced and dealt with is simply not fair.
The other thing that’s missing is real discussion of times when the CEO clearly made a difference. Take almost any successful turnaround. Lou Gerstner’s work at IBM is a good example. Larry Bossidy’s work at Honeywell would be another.
On the negative side, my blog post today chronicles the tenure of Ron Allen at Delta Airlines, where in a decade he managed to turn a great airline into an ordinary one.
http://blog.threestarleadership.com/2009/06/16/lessons-from-the-rise-and-fall-of-delta-airlines.aspx
The fact is that if you’ve been in the workplace, you know that bosses, right up to CEO’s can make a difference in either direction. Not all of them do, but the fact that no academic has come up with a definitive study to prove it doesn’t mean leaders don’t make a difference.
[...] Sunday I asked “Who’s the best CEO in America?” Although a number of folks weighed in on my question via Twitter, “only” two readers [...]
[...] Mr. Walker starts out referencing Atlantic Monthly’s recent article, Do CEOs Matter? in this post titled; Who’s the best CEO in America? [...]
I have to be honest and say I have no clue who the best CEO is, and to be even more honest, does it really matter, when all is said and done, these are the people at the top of the company earning the big bucks for not really doing much, and when something big goes down in the company, they are not the ones who usually get blamed.
Once again a great post, i really enjoy coming here and reading through the posts.