ÜBERCEO

A study by Harvard Business School found that exposure to perks has a negative effect on decision makers. Living and working in luxury leads individuals to put their self-interests over the interests of others. Furthermore, it makes them indifferent and, as a result, their actions may be harmful to others. 

Researchers Roy Y. J. Chua and Xi Zou studied the psychological consequences of living in luxury. In their research paper, "The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making,” they explain that “luxury-primed individuals tend to make decisions that are self-interested and arguably unethical.”

What’s more, “luxury-primed” individuals are more likely to make decisions that are harmful to others. Roy Chua explains that “self-interested behaviors are often conflated with those that do harm to others (e.g., selling low-quality products that might be harmful to consumers). Luxury does not necessarily induce one to do harm to others, but simply causes one to be less concerned or considerate toward them.”

So does this mean that if our CEOs held their meetings in humble conference rooms, instead of five star hotels, they would be making better, more responsible decisions? Does this mean that if they flew business class instead of by corporate jet and if they hailed a cab instead of a chauffeured limo, their business choices would be more considerate?

“The Devil Wears Prada” is a study and not real life, so it is hard to tell. Is your CEO impacted by her access to luxury goods and perks. Do you think they cloud his judgement? Let us know.

According to a China Daily article published yesterday, Asia-Pacific CEOs are confident that there is light on the other side of the global downturn. Eighty-two percent of Asia-Pacific CEOs are confident revenues will rise during the next 12 months.

Seventy-five percent of surveyed CEOs reported that leadership and talent development are key to their long-term investment decisions. 

“Talent remains a top priority for CEOs. The crisis taught us a few things—one of which is that organizations that are able to balance people retention and development against cost reduction measures will be well positioned for taking on the upswing. With the Asia-Pacific region poised to be an economic powerhouse, having the right people in place is more urgent than ever," said Frank Lyn, China Markets Leader of PricewaterhouseCoopers (PwC).

Eighty-four percent of CEOs, however, indicated that cutting costs is their top priority in the next 12 months

Last week we asked you what you thought makes a CEO an über CEO? Is it attention to details, focus, expertise, or vision? Or is it something else altogether?

NBC Universal’s Jeff Zucker has an interesting answer. Hands down, it’s leadership.

What’s more interesting is that he believes that he is the archetype of this executive virtue in spite of the complete breakdown of leadership at NBC that we have all been witnessing in the last two weeks.


To make the long story short, Conan O’Brien is being forced to step down as the host of the “Tonight Show” and Jay Leno is being brought back in from his 10 o’clock spot. All this is happening although NBC made a clear-cut succession agreement with both Leno and O’Brien five years ago.

Zucker, trying to explain just how all this hoopla happened, put his hand in his pocket and pulled out “leadership.” According to him, this entire mess happened because he’s a leader.

In an interview on “Charlie Rose,” PBS’s late-night interview show, he explaind what executive leadership really means. “Leadership is about taking chances and taking risks and also leadership is about acknowledging when they don’t work.”

That’s a great definition, but that does not mean that it applies to Zucker himself. Nancy Franklin of The New Yorker is first to say that it does not. She wrote a scathing critique of Zucker in this week’s issue saying that instead of leadership, “spectacular failure has been the wind beneath [Zucker’s] wings.” Ouch!

Last year our research on chief executives showed that Fortune 100 CEOs are social media slackers. To recap: Only two had Twitter accounts; 13 CEOs had LinkedIn profiles; and less than 20 percent had a Facebook page. While some 75 percent had Wikipedia pages, many were seriously outdated. Our research also showed that not a single CEO had a blog.  

We still say that CEOs need to make their own decisions about their personal and company’s social media strategy.... But at the very least they need to be aware of the Web 2.0 tools their customers are using to communicate and share information.   

One former CEO has already taken the plunge. Founder and former CEO of Microsoft, Bill Gates, opened up a Twitter account on January 19, 2010. His first words: "Hello World. Hard at work on my foundation letter–publishing on 1/25.” One day later he announced on Twitter that his blog—The Gates Notes—had gone live.  

Since that big-bang Tuesday, Gates has been regularly posting tweets on his page. They mainly reference the difficult situation in Haiti, Bill & Melinda Gates Foundation and his hot-off-the-press blog. 

On Twitter he already has 365,862 followers and is following 43 people. In the first eight days, he has mingled with celebrities and exchanged ideas with nonprofits. He retweeted Ryan Seacrest as well as OneCampaign’s tweets about urgently needed aid for Haiti. 

His blog, on the other hand, is a full-fledged Web site. It’s obvious that his intention was to make the site as personable and personal as possible. The navigation tries hard to be and succeeds at being simple, friendly and inviting.  

It seems that Gates is really trying not to be disconnected, disengaged and disinterested—the three Ds we coined to describe last year’s batch of anti-social Fortune 100 CEOs. Maybe we’ll see other CEOs follow Gates’ example as they realize the marketing and brand-building potential in social media.  
 
  

Last week in an article titled “Meet the Top Three Women CEOs” we mentioned a study by Harvard Business Review that found that women CEOs still have one major obstacle to overcome as leaders: their superiors, peers and subordinates believe that women, compared to men, lack vision.

Anne Dumas, the CEO of a leading services company, whose name was changed by HBR, disagrees.   When asked what, in her opinion, makes her an effective leader and CEO, she said it was attention to detail:

“I think strategy comes naturally from knowing your business and the forces that influence your market, clients, and suppliers—not at a high level but at a detailed level. Intermediaries kill your insight. You obviously can’t monitor everything, but nothing should keep you from knowing in detail the processes on which your company runs—not supervising everything but understanding at a detailed level what is going on. Otherwise, you are hostage to people who will play politics. At best you don’t have full information; at worst you’re vulnerable to hidden agendas. My job is to go to the relevant detail level.”

What do you think? What makes a CEO an ÜberCEO? Is it attention to detail, focus, strong command of the technical elements of their jobs or is it vision? Or is it something else altogether?

We wrote about the world’s best-performing CEOs in our December 2009 article titled Steve Jobs: The Best CEO in the World. In this follow-up article, we offer a brief profile of Mukesh Ambani—billionaire, Indian celebrity and number two best-performing CEO in the world according to a recently published survey by Harvard Business Review.

Mukesh Ambani is number 2 best performing CEO in the world
Mukesh Ambani heads Reliance Industries, India’s largest private sector company. Reliance is engaged in the production of textiles, synthetic fibers, fiber intermediates, petrochemicals, and oil and gas and refining. India is Asia’s third-biggest energy-consuming nation, so it’s no wonder that oil has made Mr Ambani the richest person in India and a household name even in the most remote hamlets of that vast country. His fortune is estimated in the tens of billions of dollars.

Reliance Industries was established in Mumbai in 1958 by Mr Ambani’s father, Dhirubhai. He started exporting spices to Yemen and then entered the yarn business. By the time he died in 2002, he had built a multimillion-dollar empire.

After his death his two sons fought for the control of the company. According to Anand Giridharada of the New York Times, “their mother, Kokilaben, also a major shareholder, ended the squabble in 2005 by giving Anil [the younger brother] control of Reliance’s newer service businesses like telecommunications, electric power and banking. Mukesh got the portfolio of industrial businesses. Each half now operates independently.”

Both Ambani sons are extremely successful CEOs today.

Mukesh Ambani is a shrewd, strict and demanding CEO who works hard and expects his employees to keep up. Most nights he stays in his office until midnight, and many of his employees follow his example. 

Giridharada reports in his article that the two pillars of Reliance’s staggering success are the Indian government and the press. Mr Ambani invests a lot of his company’s resources and energy to lobbying government officials and to keeping impeccable relations with the press. The reporter explains that Reliance hardly ever receives negative press.

According to Business Week, 2009 revenues at Reliance Industries Ltd. totaled 29.1B, while annual earnings equaled 1.02 per share.


According to a study released yesterday by Chicago outplacement firm Challenger, Gray & Christmas, last year’s turnover rate among our nation’s CEOs was the lowest since 2004.
 
Whereas in 2008, 1,482 CEOs moved on, in 2009 only 1,227 CEOs left their companies.

Health care industry boasts the highest turnover rate with 203 CEOs who resigned. This does not come as a surprise; health care industry has been the leader in CEO turnover for the last five years.

In 2009, health care industry had the highest CEO turnoverChief executive of Challenger, Gray & Christmas, John Challenger, explained the findings:

"The 17 percent drop in CEO turnover this year may be due partly to efforts by some companies to try to keep top management stable until the status of the economy became clearer. The economy may have turned a corner around mid-year, but it is still in a fragile state, which helped maintain this stability through the second half of 2009.”

For those whose initial reaction to this news is assuming that many of these CEOs were fired for underperforming in this difficult economy, the statistics show otherwise. Out of 1,226 departing CEOs, only 15 were fired, seven of them for underperformance.