Do We Celebrate the Wrong CEOs?

A good friend of mine just sent me an interesting article from another blog that I want to share. As a follow-up to my Leadership series, have a look at what Professor Morten T. Hansen from UC Berkeley and Herminia Ibarra, Professor of Organizational Behavior at Insead, have to say about the myth of celebrity CEOs. There are two key issues for me - the first is the article's point about CEOs that perform and those that don't. The second is a deeper issue we have in America of turning certain profiles into celebrities. I have already commented on how in America we turn our politicians into celebrities, a practice the rest of the world do not adhere to, even if they are married to celebrities and models, but what the article below highlights is that some CEOs have latched on to the media's thirst for creating celebrities and are riding the wave of their star status to stay in the job far too long when they haven't performed. Have a look at this article and tell me what you think.

Do We Celebrate the Wrong CEOs?

5:00 PM Monday December 14, 2009
by Morten T. Hansen and Herminia Ibarra

If we asked you to make a list of the top 50 performing CEOs in the world, who would you name? Jeffrey Immelt? Jamie Dimon? Carols Ghosn? They're on your list? They shouldn't be.

What about Bart Becht? John Martin? John Lau? Not on your list? They should be. Becht, of Reckitt-Benckiser, Martin, ofGilead Sciences, and Lau, of Husky Energy have had strong performance year after year, but yet they're not well known outside their industries. They're among the "quiet CEOs" getting the job done, and well. Immelt (GE), Dimon (JP Morgan Chase) and Ghosn (Renault-Nissan) get lots of attention in the business press. CEOs like them are often labeled as "most admired" or highest paid. Typically, they're charismatic leaders, but seldom are they actually measured on overall performance.

This matters. After all, where do our leadership models and leadership lessons come from? We may just be learning from the most admired, but not the best-performing leaders.

We believe performance matters most, but how do we know who are the best-performing leaders? How do we know Becht has outperformed Dimon? We set out to create our own list, compiled from data on nearly 2,000 CEOs around the globe over the full length of their tenure to date. We measured performance based on hard metrics — the objective, cold reality of shareholder returns and changes in market value.

It's a long-term metric that gets us away from the excessive focus on short-term performance. (Granted, it is not the only metric for measuring CEO performance and we are not suggesting that the CEOs single-handedly created the performance — the team they led had a great deal to do with it).

When you look at the top 100, you will find some well-known CEOs, including Apple's Steve Jobs (#1) and John Chambers (#4). But what's striking about the 100 best is the proportion comprised of less well-known, sometimes unknown CEOs. Equally striking is the fact that exceptional performance seems to rise above industry and circumstance. Some of the top CEOs come from high-growth sectors like tech (Eric Schmidt at Google, #9), others from low-growth like retail (Robert Tillman at Lowe's, #11).

The list is beautifully varied and surprising. And yet, we still flock to the same few big-time celebrity CEOs for our wisdom on leadership and growth. What does that say about us as a business community? Maybe we're over-valuing things that well-known CEOs do well (getting on magazine covers, talking about their next big moves, explaining short-term results) and over-looking what less headline grabbing but better-performing CEOs do well which is focus on building value long-term. Maybe it's time to redirect our attention and start celebrating and learning from a different crop of CEOs, starting with the ones listed here.

We invite HBR.org readers to read the article on the Top 50 CEOs, see the list of the Top 100 (and see the Top 200 on Insead's web site) starting Thursday at the new HBR.org.

In the coming weeks we'll post more blogs about specific cross-sections of data from the list and invite you to join the discussion. Do you know what some of the less-well known CEOs on our top 50 or top 100 lists did to create such exceptional performance?