If It’s Not from the Front, It’s Not Leadership

The CEO, writes management expert Peter Drucker, is the only person in an organization who can mesh the external forces operating on a company with the internal day-to-day production and operation pressures.  Only the CEO has the perspective to judge what is most important, relevant, and actionable, because the CEO has a unique perspective that no one else in the organization has. This panoramic, 360 view is the CEO’s invaluable contribution to the company.

If he or she chooses to utilize it, that is.  If not, incidents quickly become crises.  And crises quickly become disasters.

Micky Arison, CEO of Carnival, has followed a hands-off approach to the Costa Concordia disaster.  It hasn’t helped the company’s stock one bit.

Rupert Murdoch used the same approach as Arison a year ago, when making the decision whether or not to become personally involved in the News Corp. phone hacking scandal.  At the time, top advisors urged him to play a far more visible role in resolving the crisis.  He chose to leave the resolution to his London management team, headed by Rebekah Brooks.  Now Brooks is gone and News Corp is struggling to rebuild after closing News of the World, paying almost $80 million in damages to victims, its brand and repute tarnished.

I suppose the impulse to distance oneself from scandal as a CEO is understandable to some degree.   And such an approach might have worked in an earlier age, when news traveled far more slowly, the public was less well-informed, and leaders weren’t scrutinized as closely by the media and various stakeholders.

But it is simply never a good idea.  Because real leadership comes from the front of an organization, not the back.