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I don't buy the oft-repeated claim that you can re-make a company simply by replacing the CEO. I don't believe that CEOs in large companies have much influence

I don't buy the oft-repeated claim that you can re-make a company simply by replacing the CEO. I don't believe that CEOs in large companies have much influence on the company's direction, except in terms of decisions to downsize/outsource, how to use money, and who's on the board. There's only so much one person can do (and accordingly, I think all big-company CEOs are vastly overpaid). Moving the deckchairs in the boardroom isn't going to solve systemic problems in a company.

twh270 3y ago
You can't "re-make" a company by replacing the CEO/CxO, but I wouldn't be too quick to dismiss the influence of the c-suite either. What they care about and talk about filters down, often through unofficial channels of communication, and it does have an impact on how front-line employees do their work. Of course, this does take time and often involves some changes in management as well.
- denton-scratch 3y ago
  I've been watching the Post Office Horizon Inquiry sessions, and reading transcripts. From what I've seen, a completely new board would have no noticeable effect on the PO; they'd have to remove most of the management. It looks as if the company ethos is driven by line management. Well, that really means tearing the company up completely. I can't see how a new board could effect reform. And replacing all the middle management would destroy the company. And as you say, it takes time for a new culture to move through the layers; but the PO doesn't have time. Does Boeing? I realize the companies are very different, but both have marinated in an unhealthy culture for a long time.
  - kelnos 3y ago
    If replacing all of middle management to effect an essential change will destroy a company, then that company maybe needs to be destroyed. Because that's how the CEO makes big change happen: management -- from the C-suite down to line managers -- needs to get on board with that change. If they refuse, they get fired and are replaced by people who will carry out the change. If this process will take too long to save the company, then... again, maybe the company needs to fail.
tjmc 3y ago
What about Apple?
kelnos 3y ago
Company culture is a top-down sort of thing. Take a simpler thing: if a new CEO sets an example of taking a decent amount of time off and promoting that as what people should be doing, because they value mental health, then that will gradually trickle down into upper and middle management, and down to the rank-and-file. Management types who resist that will be replaced or marginalized, because this aspect of culture matters to the CEO and this is something they want to promote. It won't happen overnight, but ultimately management will be filled with people who are taking solid amounts of vacation and push their reports to do the same. A CEO that wants to push an engineering-first/safety-first culture will be firing executives and management types that try to hide problems or push through things that don't meet the quality bar that the CEO is looking for. This sort of shift will not happen overnight. It can take years. Whether or not a company like Boeing can survive this sort of change, and if they even have years left to make that change, is another question, of course. But I argue the opposite: the CEO (critically, with the unwavering support of the board, which requires the support of shareholders) is the only person who can make this sort of shift.
squokko 3y ago
"Replacing the CEO" isn't a panacea because most CEOs are pretty average, but when an exceptional CEO does take the helm, they can pull off some amazing feats (e.g. Satya Nadella).
- denton-scratch 3y ago
  I agree that most people are "average" (truism?), and that some are exceptional. And I agree that exceptional people sometimes achieve amazing feats in their field of endeavour. But what's so special about CEOs?
  - squokko 3y ago
    The scale of their impact when they are exceptional

twh270 3y ago

You can't "re-make" a company by replacing the CEO/CxO, but I wouldn't be too quick to dismiss the influence of the c-suite either. What they care about and talk about filters down, often through unofficial channels of communication, and it does have an impact on how front-line employees do their work. Of course, this does take time and often involves some changes in management as well.

denton-scratch 3y ago
I've been watching the Post Office Horizon Inquiry sessions, and reading transcripts. From what I've seen, a completely new board would have no noticeable effect on the PO; they'd have to remove most of the management. It looks as if the company ethos is driven by line management. Well, that really means tearing the company up completely. I can't see how a new board could effect reform. And replacing all the middle management would destroy the company. And as you say, it takes time for a new culture to move through the layers; but the PO doesn't have time. Does Boeing? I realize the companies are very different, but both have marinated in an unhealthy culture for a long time.
- kelnos 3y ago
  If replacing all of middle management to effect an essential change will destroy a company, then that company maybe needs to be destroyed. Because that's how the CEO makes big change happen: management -- from the C-suite down to line managers -- needs to get on board with that change. If they refuse, they get fired and are replaced by people who will carry out the change. If this process will take too long to save the company, then... again, maybe the company needs to fail.

tjmc 3y ago

What about Apple?

kelnos 3y ago

Company culture is a top-down sort of thing. Take a simpler thing: if a new CEO sets an example of taking a decent amount of time off and promoting that as what people should be doing, because they value mental health, then that will gradually trickle down into upper and middle management, and down to the rank-and-file. Management types who resist that will be replaced or marginalized, because this aspect of culture matters to the CEO and this is something they want to promote. It won't happen overnight, but ultimately management will be filled with people who are taking solid amounts of vacation and push their reports to do the same. A CEO that wants to push an engineering-first/safety-first culture will be firing executives and management types that try to hide problems or push through things that don't meet the quality bar that the CEO is looking for. This sort of shift will not happen overnight. It can take years. Whether or not a company like Boeing can survive this sort of change, and if they even have years left to make that change, is another question, of course. But I argue the opposite: the CEO (critically, with the unwavering support of the board, which requires the support of shareholders) is the only person who can make this sort of shift.

squokko 3y ago

"Replacing the CEO" isn't a panacea because most CEOs are pretty average, but when an exceptional CEO does take the helm, they can pull off some amazing feats (e.g. Satya Nadella).

denton-scratch 3y ago
I agree that most people are "average" (truism?), and that some are exceptional. And I agree that exceptional people sometimes achieve amazing feats in their field of endeavour. But what's so special about CEOs?
- squokko 3y ago
  The scale of their impact when they are exceptional