Summing Up
Is The Question of Who Should Choose Your Boss Becoming "A Little Irrelevant"?
The remarkable events at grocery chain Market Basket over the summer stimulated a range of responses to this month's column about who should choose a boss. Several reminded us that in many parts of the world choosing a leader for an organization is a primary responsibility of a board of directors. But others tempered that judgment with a variety of cautions.
Richard Belloff made the base case by saying "The Board should choose the CEO of the company and it is their fiduciary duty to do so." Carl Meyer added, "Clearly the board! … The danger of favoritism among employees would be far too dangerous."
Others figuratively said "not so fast." As Joel Koblentz put it, "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." Mike Flanagan commented: "The more buy-in from a broader range of people the better (the) choice and the easier for the chosen one to get consensus on later … decisions." Mason Oghenejobo said that the solution lies in selecting the leader who will meet or surpass the aspirations of key stakeholders. "Board members need not be the only persons involved."
According to Karen Caswelch, "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." Clifford F. Baker put it this way: "Having worked for a living… 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."
Several respondents described alternatives designed to widen the range of inputs to the decision-making process. For example, Yadeed Lobob commented that a dual board structure that included workers' representatives would help alleviate uncertainty around choosing an authentic leader. "Germany has such a structure but the context of German culture should also be factored in." Walter P. Blass noted that in academia the search is usually run by a search committee, but the nomination needs the approval of the next level to that position. "That way, you get input from affected constituencies, but allow the selectee's boss to choose from the recommendations…."
Gerald Nanninga posed an interesting question: "Today's workforce is evolving ever more closely to a 'contract employee' model…. So, if you think of yourself as your boss and your supervisor as your client, then the question becomes a little irrelevant."
Is this where we're headed? If so, is the question of who should choose your boss becoming "a little irrelevant"? What do you think?
Original Article
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).
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.
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.
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.
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!
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/
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.
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.
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.
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.
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.
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.
- I should, and I choose whoever pays me well.
You see, everything has a price.
Typically the question is not so personal as in this instance but we certainly ask ourselves "do I want to work for this company (as managed by the current CEO)" and it is often very personal at the immediate supervisor level.
Admittedly it is very rare that rank and file workers feel the CEO matters and it is also rare that employees are motivated to risk their current jobs because of a change at the top.
Nevertheless, I believe we all make the decision "for whom am I willing to work" as part of our job search, even if it has vanishingly small weight.
The danger of favoritism among employees would be far too dangerous....
Best regards,
Carl M. Meyer
Choosing a new Boss should be the responsibility of those the future Boss is going to serve.
Hence the employees,management and the Board all have a steak at this task. However, the level of these share responsibility should vary depending of the size of the company.
A strategic formula should be design where the prospective Boss will have an opportunity to address and meet representatives of each of the above mentioned groups.
Time: It could consume some time but it could lead to
better feedback from those the Boss is going to lead.
At the end,a score card is keeping trace of how each group viewed the prospective Boss is added and the Candidate with the highest score should be given the job.
Conclusion: This is a worthwhile suggestion that could lead to employees satisfaction,management and board members satisfaction. There is no secret that employees satisfaction boost morals and increase productive that
could propel costumer satisfaction. Costumer satisfaction translates to increase market share . Increase market share affects the bottom line of the company.
The end game is that corporate shares will go up and share holders will be happy with increased dividends.