03 Sep 2014  What Do YOU Think?

Who Should Choose Your Boss?

The employee-led battle to reinstate the fired CEO of Market Basket has riveted the business world. But Jim Heskett asks, who really should hire the CEO? The board? Company leaders? Rank and file employees? What do YOU think?

 

Recent events surrounding the walkout of many of the 25,000 employees at Market Basket, a Massachusetts-based supermarket chain, in support of their unseated CEO raises interesting questions about how leaders are chosen.

It appears the employees have engineered the return of company President Arthur T. Demoulas by nearly putting their organization out of business. It was a remarkable move, especially by a group of workers who were not represented by a union. They had to organize themselves. And they have apparently chosen their boss.

Often, an organization's board chooses at least the top executive. It's a board's most important responsibility, a task delegated to it by the organization's shareholders. Judging from outcomes, many boards are not very good at it. They don't put enough effort into the task. They subcontract much of the hard work, at least the most difficult job of winnowing candidates down to several, to headhunters. They often favor those applicants they know personally, whether they are insiders or outsiders. When they do participate directly in the process, they don't ask the right questions.

Leaders most typically choose members of their teams. There is a large body of literature that concerns a tendency of many leaders to choose those who have human qualities like their own. Not cherishing the task, many leaders leave it up to a human resource department to carry out all but the final stages of the process. And like board members, research has shown that they rarely ask questions that would enable an understanding of whether or not their interviewee will be an effective contributor to the organization in the tasks needed to be done.

Still other organizations give potential employees some latitude in choosing their bosses. At Google, reporting relationships are sufficiently pliable that a new employee has a significant voice in the choice, moving from one job to another with considerable frequency. In this case, the entire organization has been structured to create a kind of talent marketplace in which employees are "buying and selling" ideas, jobs, and associates. At W. L. Gore & Associates, manufacturer of Gore-Tex, "there are no ranks or titles … associates become leaders when their peers judge them to be such," according to management writer Gary Hamel.

Theoretically, the idea of employees choosing their bosses sounds attractive. There is little evidence, however, to support the impact of this practice on performance. It remains to be seen how well Market Basket will bounce back from a near death experience after what should be an initial fanfare around the return of Demoulas to the chief executive's office. But few organizations are structured to accommodate this practice. Perhaps most important, it assumes a level of mobility and personal security that few employees feel they have.

Some research suggests that the perceived quality of an employee's boss has a significant influence on job satisfaction. This underlines the importance of the most recent Conference Board study results showing that, for the eighth straight year, less than half of United States workers are satisfied with their jobs. Other data suggest that the malaise extends far beyond the US. It lends importance to the question: Who should choose your boss? What do you think?

To Read More:

Ben Cheng, Michelle Kan, Gad Levanon, and Rebecca L. Ray, ob Satisfaction: 2014 Edition, The Conference Board, June, 2014.

Gary Hamel, with Bill Breen, The Future of Management, (Boston: Harvard Business School Press, 2007).

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Comments

    • Gerald Nanninga
    • Principal Consultant, Planninga From Nanninga

    Today's workforce is evolving ever more closely to a "contract employee" model:

    A) Shorter tenure at a company B) Brought in for projects rather than a position C) Frequent shifting of responsibilities and reporting relationships

    Even if you are a real employee, it feels more like being an independent contractor. And for an independent contractor:

    1) You are your own boss. 2) The traditional boss becomes your client.

    So, if you think of yourself as your boss and your supervisor as your client, then the question becomes a little irrelevant.

     
     
     
    • Richard Belloff, DBA, FACHE
    • Assistant Professor, Des Moines University

    The Board represents the owners of the corporation (shareholders). Thus, they act as agents on the behalf of the owners.

    The Board should choose the CEO of the company and it is their fiduciary duty to do so. The Board may choose to consider the input of other "stakeholders" if that is their process.

     
     
     
    • Allen

    While I am not convinced that employees will make good long term decisions, as stake holders they certainly should have some input into the process if only in an advisory role. Many years ago my HR department told me they couldn't find any candidates for open positions in my department. By relegating HR to their proper role of vetting candidate and scheduling appointments AFTER I had reviewed the all the applicants and selected those to interview I never had any trouble again finding highly qualified candidates. HR is not looking for the best candidates, but the best that are easy to find.

     
     
     
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited

    The thought of me (or my peer group ) selecting or even having a say in the selection of my/our boss is not practical. There will be a chaos if every employee goes on to decide who the boss needs to be. Yes, a selection process may be evolved where stakeholders' general expectations are kept in view eventhough these cannot be the final selection factors. A CEO/ Managing Director needs to be chosen by the Board of Directors with ratification by the shareholders in a General Meeting. After all the company's foremost stakeholders are the shareholders and their directions must be heeded to. We must also understand the present working scenario where employees' tenure in any one company has shortened quite a bit. Hence employees do not have a long-term relationship which used to result in loyalty in the past. For them, there is not much to dwell on such issues as they are more on a learning spree and then proceeding elsewhere. Yes, in the interest of any company's growth we need to have able result-oriented leaders and selecting such people properly must be a serious execrcise for the Board.

     
     
     
    • Yadeed Lobo

    A dual board structure would go some way towards alleviating the considerable uncertainty around choosing an authentic leader.Germany has such a structure but the context of German culture should also be factored in.

    Another way would be for employees to have employee voting (with no benefits attached) along side board voting to decide who to appoint as the next leader. Almost like a democractic business model. But hand in glove with this would be that only those who have worked in the organisation and risen through the ranks would be eligible for such elections.

    This solution has its own complexities as it would mean that the traditional accompaniments of democratic protest and special interest lobbying could be the unintended consequences of such forays.

    Family feuds in business sometimes carry on for generations.And this rings true for any country where families run businesses.From India to China to South Korea to Australia to New Zealand to the United States. Whilst an independent board could work in some instances, it still is difficult as the emotional facet of familial interactions is so pervasive. And when it comes to family the rational gives way to the emotional especially when it comes to decision making , authority and monetary gain.Sometimes carve outs of entities could work as this gives each side a semblance control over the heritage but this does not always work!

     
     
     
    • John Parikhal
    • Partner, Breakthrough Management

    If I understand the article correctly, the most important job in an organization is chosen by a board who is "not very good at it" or leaders who "rarely ask questions that would enable an understanding of whether or not their interviewee will be an effective contributor to the organization".

    At first glance, this looks illogical and ridiculous. Yet, it's unfortunately true. Which is why so many companies handle succession so poorly.

    And, it all starts with this reason for business failure. http://www.btmgmt.net/the-biggest-cause-of-business-failure/

     
     
     
    • Mike Flanagan
    • Purchasing Manager

    Broad question...for the CEO is picked by the board of directors and with input from all stakeholders. A department or Divion head by their superior with input from equals and other stake holders. Decisions should not be made quickly but as a joint effort. The person will have an impact on the company and its future.

    The more buy-in from a broader range of people the better choice and the easier for the chosen one to get consensous on later on decisions.

    The "boss" should have the respect and integrity of all around him and the ones that are picking him.

     
     
     
    • Tom Moudry
    • CEO/CCO, Martin|Williams

    Company leaders, provided you have the right company leaders.

     
     
     
    • Joel M.Koblentz
    • Senior Partner, The Koblentz Group

    Having been directly involved in selecting CEOs as a board member and as "sensitive matters" search advisor to Boards, my experience suggests that the key for deciding on the best qualified for consideration depends principally on the upfront inclusion of inputs from the various constituency stakeholders ie employees, suppliers, customers and of course, The Board representing the shareholders. This planning phase and information gathering should be ongoing so that The Board can act as necessary to appoint effective leaders efficiently, with "open ears", regardless of the circumstances that may require changes at the top.

    If framed accordingly, the decision on "the who" becomes one of an ongoing process/ program carefully executed.

    It should be noted that if "parties" participate ie are included in providing input/insights to the Board, they must accept the duty of responsibility and support of The Board's decision. To undermine it, creates chaos and rarely leads to value creation.

    The bottom line is that The Board is ultimately responsible but in carrying out its fiduciary duties, it is wise, as part of its selection process, to seek inputs from those who will "live" daily with the next leader.

     
     
     
    • Atul Guglani
    • Director, Mantex Technologies

    I had once proposed a Secret Ballot polling by the middle management up, for CEO after the last one was retiring and there were 3 internal candidates. Did not get tried, but it would have been, one of the possible ways to see, whom the employees love and would like to see as their leader. Also, CEO can be be a 2-3 years fixed term, before being re-elected or booted out. However in all cases need to be endorsed by the Board.

     
     
     
    • Philippe Gouamba
    • Vice President of Human Resources, Skyline Windows, LLC.

    I have sorely missed this great forum!! Thank you, Professor Heskett for challenging us on a monthly basis.

    It was great to hear about what happened at Market Basket. Too many times, employees are just satisfied with putting in their 40 hours and subsisting on meager wages as the months and years of their lives pass them by. It is the odd occurrence that employees speak up and show appreciation for a good boss or voice displeasure with a bad one. I find that employees in general are too complacent in the feedback, good and bad that they have for their bosses. I work as a VP of HR. My boss should be the owner of the company. In the event that it is not the owner of the company that hires my boss, it should be someone who has a very clear vision of the company's mission and goals and has the acumen to accurately articulate said vision and goals. Anything less than that is a recipe for failure.

     
     
     
    • Mason Oghenejobo
    • Strategy and Portfolio Adviser, Seplat Petroleum Development Co. PLC, Lagos. Nigeria.

    I believe we need to reframe the question to address the cardinal problem or issue that needs to be solved, which is, how should organizations choose CEOs or bosses that can satisfy the aspirations of their key constituents - the Board, the Corporate Leadership Team and workers? Irrespective of the process or persons used to select the CEO, if the outcome is unable to satisfy the key stakeholders and improve the organization, the organization will drift and atrophy. Overall, I would argue that the solution lies in developing and implementing a set of criteria and processes that attract the right candidates and subsequently selects the leader that will meet or surpass the aspirations of the key stakeholders of the organization. I believe the responsibility for ensuring that this is properly done flows from the Board but Board members need not be the only persons involved. The degree to wish the leadership team and workers are involved wil l depend on the type or nature of the organization. For example, research fellows may have a voice in who leads a research organization but this may not be applicable in a military organization.

     
     
     
    • WALTER P. BLASS
    • President, Strategic Plans UnLtd; also Board of trustees at a 4-year College

    I am interested that no one suggested what Prof. Heskett must know from Academia. The search for a new Dean, VP is usually run by a Search Committee which may contain both representatives of those whom the Dean would supervise ( Faculty, Students, Staff ) but the nomination needs the approval of the next level to that position ( Provost/ President, etc.) That way, you get input from affected constituencies, but allow the selectee's boss to choose from the recommendation(s) the person (s)he can work with. It doesn't always work out, but thorough vetting helps, as does a culture of less rather than more hierarchy.

     
     
     
    • Karen Caswelch
    • Board Member, Indianapolis Airport Authority

    In a large organization, it's very difficult to get a coherent voice about the needs of the working level. I think the Market Basket case was very unique - they felt they were treated fairly by the existing management and the new management was clear that too much money was going to the workers, so things were going to change and the workers decided that they didn't like to potential new trajectory.

    When I was VP of Purchasing for an organization, I always asked my staff to interview when I was hiring a direct report. We had a strong team oriented culture, and it was critical that I kept that culture.

    We just hired a new leader at our airport. Our current leader was retiring after a very successful career. The board asked the senior staff to identify characteristics of the new leader. The nominating committee interviewed all of the candidates (we worked with a headhunter), identified the top ones and then invited the top 3 to come for an in person interview. They met with both the board and the senior staff. Both entities were unanimous on the top candidate.

    Bottom line, I think it's very hard to have workers choose middle manager bosses - I think there is a bigger gap in terms of the understanding of strategy when you get to a certain level of the organization. That gap is a lot smaller when you are talking about entry level supervisors, and you would hope that the gap is a lot smaller when you are at the CEO direct report level. I think that the person that the board likes the best as the CEO isn't necessarily the best team leader, because a lot of board members don't value the team leadership aspect of the position.

     
     
     
    • Aim
    • Drilling Supervisor, Crescent Petroleum

    Who should choose your boss? - I should, and I choose whoever pays me well.

    You see, everything has a price.

     
     
     
    • Clifford F. Baker
    • Chair, Neffel Corporation

    Having worked for a living as a participant in the actual creation of both a product and a service, as well as having sat in a corner office of a corporate ivory tower; completely removed from the real world; I've come to conclude that business leadership would be wise to push past pride and the false sense of self importance, and include within the decision making process, those in the enterprise who know the actual nuts and bolts of the business. If not practical to do so, these people should at least be informed as to the why a decision was made. I would also include that the ideation of the "good old boys mutual admiration and back scratching society" method of appointing people to positions of leadership, does not serve business or, for that matter, government, at all well. Pride and arrogance seem always to precede a fall.

     
     
     
    • Hugh Quick
    • home, none

    I do not claim any business acumen but as an ordinary observer it seems to me that the researchers have got it wrong. Entrepreneurs create businesses because they are Entrepreneurs, nobody chooses them. I do think that the legislation under which the resultant businesses have to work needs revision but that is quite a different topic.