Some CEOs command celebrity status in the business world. But their companies’ performances show fame doesn’t always equal fortune.
Can you name the chief executive officer of Siemens or Matsushita? Or the man who is about to succeed Joachim Milberg at BMW? The answers are at the end of this article.
But I doubt if any reader of this newspaper would fail to identify the CEO of Vivendi Universal. Jean-Marie Messier, moi-meme, maitre du monde, abbreviated in France to J6M. A nickname Mr Messier likes so much that he used it as the title of his autobiography.
As a rule, only sports and pop stars have written autobiographies by the age of 44. But that is how Mr Messier sees himself. For the head of France’s biggest water company to use that position to launch himself as an American media mogul is probably the most brazen feat of self-promotion in business history.
But Mr Messier is not the only business leader to seek the limelight. Jack Welch’s public relations advisers had barely finished dealing with his book tours when they had to cope with the news of his affair. Richard Branson’s face is ubiquitous. We are all holding our breath before this week’s announcement of the Veuve Clicquot award for business superwoman.
This publicity consciousness is new. A television production company recently planned to feature great business figures of the 20th century. When they sought advice, they arrived with mock-ups of Bill Gates and Mr Branson. But as I reeled off a list of great business figures of the 20th century, it became clear that the idea would never make it to the screen. There was no name recognition for Alfred Sloan, who invented the modern corporation; for Thomas Watson Jr, who created the computer businesses; for Henri Deterding and Marcus Samuel, who built the first global company; for Alfred Mond, who put together a company synonymous with British manufacturing industry for half a century. The eyes of the television people lit up only when we got to executives who had the same name as their company, such as Henry Ford and Simon Marks.
It has always been the case that many successful people suffer from delusions of self-importance. Gerald Ratner’s taste for publicity was so great that he could not resist telling the world that the products he sold at his jewellery chain were crap, and so engineered his own downfall. But the public relations industry brings professionalism to the job of getting names into print. And business has become personalised. If you read US business journals, you would suppose that every Microsoft product was the personal invention of Mr Gates, every action at General Electric an expression of the will of Mr Welch.
This personalisation extends to cases taught in US business schools. They routinely begin with a CEO pacing his roomy 38th-floor office as he wrestles with the future of his business. It is not surprising that MBA students who leave these schools aspire to similar roles for themselves.
But the achievements of businesses such as GE owe far more to depth of organisation than to heroic individuals. When Mr Welch took over from Reg Jones at GE, Mr Jones was the most admired chief executive in the US. As was his predecessor, Ralph Cordiner. These were remarkable men. But when a company is always run by remarkable men, what is truly remarkable is the company itself.
There are big cultural differences across the world’s large economies. In Japan and Germany the chief executive is still seen as the servant of the organisation rather than its master. Few top business people in these countries are public figures. The press relations officers of companies are more often concerned to keep their executives’ names out of the papers than to put them in.
France is very different. The tradition of the grand patron lingers. The very title president directeur general (PDG) implies the focus on a dominant figure. This can allow matters to spiral out of control, as they did a decade ago at Credit Lyonnais, whose losses make Enron’s collapse look small change. J.Y. Haberer, its PDG, did indeed have the power to say “yes”, as the bank’s advertisements emphasised. But French taxpayers, like Vivendi shareholders and employees, must be wishing that someone else had enjoyed the power to say “no”.
The development of corporate governance in Britain and the US has helped restrain excessively powerful individuals. Jacques Attali was pushed out of the European Bank of Research and Development by the English-speaking members of the board. It is less likely today that Ross Johnson of R.J.R. Nabisco would find golf partners by putting America’s leading sportsmen on the corporate payroll, or send a corporate jet for his dog. Mr Branson had to take Virgin private and Stelios Haji-Ioannou has just discovered that his new institutional shareholders at EasyJet will not tolerate his public style.
And this is how it should be. Jim Collins’ recent study of corporate transformations* picked out humility as a characteristic of his most successful leaders: people who built up businesses rather than themselves. Mr Collins’ hero is Darwin Smith, the uncharismatic CEO who made Kimberley Clark an effective competitor to Procter and Gamble. And Heinrich von Pierer of Siemens, and Kunio Nakamura of Matsushita, run pretty good businesses. We should wish good fortune and continued low profile to Helmut Ranke when he takes over the top spot at BMW next month.
* Jim Collins, Good to Great, Random House, 2001