Archive for the ‘Leader’ Category

Are CEOs several hundred times more important than frontline people? Their salary says they are

January 2, 2008

Organizations are social entities, and people are social creatures.  What this means for leaders is that social relations are important.   People compare themselves to others and derive feelings of worth and status from that comparison.  Consequently, pay differences have not only substantive but symbolic meaning.

Take the most notorious example [of pay differences], CEO pay.  CEOs who make several hundred times more than what the average employee in their company makes send the signal that what they do is several hundred times more important.  Is that really the right signal to send?  If frontline people think that what they do doesn’t matter very much for the organization’s success or in the opinion of senior management, why bother worry about how well they are doing their job?  It is not by accident or coincidence that many of the most successful, consistently best-performing companies have CEOs who are not outrageously overpaid – Amazon.com, CostCo, and Southwest Airlines are a few current examples.  By sending a signal that performance is a collective, not just an individual, endeavor, those companies are more likely to induce thought, creativity, and effort on the part of their people.

Hard Facts by Jeffrey Pfeffer and Robert I. Sutton

See this related blog:  Paradox: Embracing Decentralization while Hailing the CEO as Corporate Savior

“When two people always agree, one of them is unnecessary”

September 10, 2007

“Selecting leaders — avoid at all costs the people who think they know everything. They don’t. But worse than that, they are unlikely to embrace any facts that disagree with their perceptions.”

“When two people always agree, one of them is unnecessary”

Hard Facts by Jeffrey Pfeffer and Robert I. Sutton

Are you a traditional leader or a catalyst?

September 2, 2007

“In chemistry a catalyst is any element or compound that initiates a reaction without fusing into that reaction.  For example, take nitrogen and hydrogen, two of the most common elements on earth, put them in a container, close the lid, come back a day later, and … nothing will have happened. But add ordinary iron to the equation and you’ll get ammonia, an important ingredient in fertilizers, polymers, and glass cleaners. The thing is, ammonia doesn’t have any iron in it — it’s made solely of hydrogen and nitrogen. The iron in this equation remains unchanged, it just facilitates the bonding of hydrogen and nitrogen.”

“In an organization a catalyst is a person who initiates an activity and then fades away into the background. In a decentralized organization a catalyst gets the decentralized organization going and then cedes control over to the members. For example, Jimmy Wales started Wikipedia and then allowed the members to take over – content and administration. Another example: Craig Newark started craigslist, and now the users of craigslist decide which categories to list on the site.”

“In letting go of the leadership role, the catalyst transfers ownership and responsibility to the group. A catalyst isn’t usually in it for praise and accolades. When his or her job is done, a catalyst knows it’s time to move on.”

The Starfish and the Spider by Ori Brafman and Rod A. Beckstrom