Here’s a perspective on human capital from the CEO’s vantage point to help understand how to make the case that a strategic and systematic approach to human capital can create better experiences for all stakeholders, including the CEO.
Nearly everyone acknowledges that most CEOs lack a strategic and systematic approach to engaging all stakeholders. Some people
even say that someone has to be a sociopath to be a CEO. To convince the CEO of the sustainable benefits of a strategic and systematic focus to human capital in terms of profits, better stakeholder experiences, and risk mitigation, the answer is not to blame the CEO, but to understand the job. Here’s an overview of the issue from the perspective of the CEOs to address some skeptics who have asked why ESM only highlights CEOs who focus strategically on people and don’t call out the many who countenance practices antithetical to the interests of customers, employees, distribution partners, vendors and communities.
The answer is simple: the job of the CEO might be among the most difficult and often unpleasant jobs of all in terms of seeing the best and worst of human nature, and the traditional paradigm for CEO success has not provided a sound reason for most CEOs to embrace a more strategic and systematic approach to human capital management. Human capital is not measured on balance sheets, is generally not subject to disclosure to the public, and some believe a focus on other stakeholders at the expense of shareholders can expose CEOs to potential legal action. So, whose side is the EEA when it comes to the CEO? The answer is: the person willing to take on this job and most of all those CEOs who seek to lead a more sustainable path to success in which all stakeholders benefit. Anyone who advocates for an enterprise approach to engagement to a CEO should focus on how a strategic process not only achieves better and more sustainable results and experiences for all stakeholders but for the CEO as well.
By Bruce Bolger
The Enterprise Engagement Alliance’s objective is to educate CEOs on a more sustainable way to enhance performance while maximizing experiences, not to discourage anyone from taking on what is one of the most challenging of all jobs. For while much of what makes the job unpleasant might occur, in some cases at least, in the comforts of the corner office, a corporate jet, or penthouse suite, the day-to-day reality almost always is dealing with everything no one has the authority to address and in most cases is happy they don’t have to. Thankfully, it has its good days as well. To convince the CEO of the opportunity for a strategic and systematic approach to engaging all stakeholders, it’s necessary to understand the job.
I have run small businesses or had direct financial accountability for independent business units for bigger companies since I was 25 years old, but I would not call myself a CEO because no organization ever had sales above $5 million a year or more than about two dozen employees. Over the years, I have had lengthy interviews with many CEOs at large companies and have gotten to know a few quite well, including at very large companies. Based on these personal accounts and assuming that the issues I faced at the relatively small businesses I have run related to customers, employees, investors, vendors, and communities is but a microcosm of what is faced by CEOs at larger organizations, I can only imagine what real CEOs endure. So, the EEA will not take pot shots at anyone willing to take the job, any more than we would at a nurse practitioner, sales manager, flight attendant, etc. or anyone. Just like we need great craftspeople, health practitioners, engineers, janitors, we need great CEOs. That is why the focus of the Enterprise Engagement Alliance is on educating CEOs on a strategic and systematic approach to achieving results that creates better results for all stakeholders and more sleep at night for CEOs, not a new way to tax or abuse the minority of people willing or able to take on the job.
The CEO’s Perspective
Someone once said it’s important to put one’s self in the shoes of others, and this pertains as much to the people willing to take on the job of CEO. Some achieve the position by working their way up the ranks in an organization or industry; some through anointment in a family business, others by starting their own organization. The path might be based on extraordinary sales, engineering, legal, or organizational management skills, or in some cases it’s based on nepotism or sheer luck. Few people are trained to be a CEO or grow up thinking they wish to be a CEO. More often, people grow up wishing to create something that requires a CEO for which the creator considers herself the best-qualified CEO.
For any reader who seeks to be a CEO, beware of what you wish for. While in the best of times, it can be among the most rewarding of all jobs, it can require nerves of steel. Yes, in the good times, the job is like a dream. Many CEOs experience the great satisfaction of:
Launching or running worldwide, regional, or local businesses that create new opportunities for customers, employees, vendors, and communities, and which are the basis of careers for people who go on to have very successful lives or for distribution partners that profit from the product or service.
Enjoying long-term relationships with dozens or more of customers, employees and independent contractors, vendors, investors, and even competitors, sometimes in places around the world from many different walks of life, sometimes at events or dinners, and who support new ventures, even after one that failed.
Delivering dividend checks or distributions to investors.
Feeling the joy of running a business with year-after-year of growth, high customer retention and low employee turnover.
Knowing that the organization is helping families put many kids through college; that a community has been helped by its donations, and that even former employees remain in touch because of the camaraderie they had formed at work.
Helping give employees the time to take a special vacation or recover from a devastating accident, or a birth with full pay, or, in some cases taking on difficult personal challenge for an employee, like the CEO I worked for who helped repatriate the body of an employee who had died on vacation in a distant land because his wife of course was overwhelmed by the tragedy and complexity of the process.
A Day in the Life
That’s the rewarding side, what a business leader signs up and hopes for. Here’s the other side of the ledger that almost any CEO with a decades-long career will experience at one time or another:
Financial and competitive pressure. Whether at a large or small company, CEOs must provide forecasts oftentimes amid considerable uncertainty and generally with one or more competitors in the market that would like to see the company out of business. If it’s a startup or new product, they almost must guess what will happen. The CEO often must forecast not only what sales will look like in the next 12 months, but how they break out month by month; at what costs broken out the same way, and how about a projection for three to five years? The CEO must anticipate market conditions, the economy, staff morale and resource needs, intellectual property and technology risks, balanced against the financial needs to meet year-round cash flow needs and distributions to investors, if any. The CEO must continually watch for and anticipate cash flow to meet payroll or other needs during slow seasons, if any. Add to this the fact that, generally speaking, overall organizational performance is monitored at least quarterly, and that the business leader must answer to someone, maybe a bank or financiers, and always to him or herself, the obvious questions that arise if numbers either fall short or exceed expectations. The pressures grow exponentially when you run your own company and it is you who is financing the cash flow.
For most CEOs, human capital is a “warm and fuzzy.” It isn’t accounted for on the balance sheets, it’s generally not part of their compensation, and in fact, some legal experts believe, a company can technically be sued by a shareholder who feels that his or her interests were subordinated to those of other stakeholders. See: New York Times, Ex-Corporate Lawyer’s Idea: Rein in Corporate Sociopaths
The stakes. No matter what the organization, from the smallest to the largest, the stakes are high, because in most cases the CEO is in a position to either help the entity thrive or destroy it, with the cost of jobs, incomes, disappointed and potentially damaged customers, vendors, and communities growing bigger with the size of the organization. Rarely can a CEO legitimately blame anyone else when an organization fails, and rarely can a CEO with a long history in business come away with only success.
The decisions. What few employees can comprehend is what it’s like even in a small business to be the person everyone looks to for the solution to a problem, and the bigger the problem, the faster it lands on the CEO’s desk. Whether it’s a major customer’s request for additional services without paying more, a vendor who hasn’t delivered the desired product or service, a customer who didn’t pay, a valued salesperson who made a promise a company couldn’t keep that infuriated a major customer or who is threatening to quit without a big raise, and, of course, in the worst of times, for a startup or small business, figuring out how to deal with vendors the company can’t pay without holding up someone’s pay check, let alone his or her own. Even in the best of times, the CEO’s job is at least 50% dealing with problems of one kind or another or, if not that, the biggest challenges, such as: navigating the strategic direction of the organization, raising money, recruiting top talent or finding partnerships, negotiating an acquisition or sale, supporting a major customer or investor presentation or negotiations, planning a succession plan or exit strategy that addresses the interests of all stakeholders, working to retain a major customer, distribution partner, or talented employee. So many times, the choice is a lesser of two evils. Every CEO who sees the movie “Argosy,” about the clever CIA strategy to extract Canadian hostages from Iran, understands the question asked by the CIA operative played by Bryan Cranston. After hearing the proposed plan, he asks: “Is that the best s**tty solution?
Management. The larger the organization, the more complex the components, the more far-flung the people, the more difficult it becomes to hire trusted leaders and front-line managers, great employees at every level, make sure everyone is on the same page and is properly equipped to do their jobs, and that opportunities and challenges get quickly into the hands of people who can do something about them, let alone making sure everyone in a large organization proactively lives the values or complies with ethical practices and respect for diversity and all genders. It is literally impossible for a large organization to 100% hire the right people for every job; a certain percentage of hires will fail no matter how much anyone tries, and the larger the number of employees, the greater the chances for a mistake. In the meantime, the larger the company, the more ideas get flung at the CEO each day; the more assurances that such and such is the next best thing.
Failure and hard times. Over a decades-long career, even the most well-meaning and successful CEO is apt to face failure or hard times, and, as with politicians, there are so many ways to make enemies of people one thinks are friends. Because the job of most leaders is to innovate and create new ventures, they will over the course of their careers take stances or launch products that some will consider disruptive or will launch a new product or service that fails to live up to expectations. Like politicians, the more a CEO makes noise in a marketplace, the more mistakes and enemies he or she is apt to make, manifested at the very least in snide comments that inevitably get back to them. Most will experience at one time or another the impact of a Great Recession and/or market disruption and must make painful decisions to reduce staff or defer or even in the worst of circumstances default on financial obligations to keep the business going, not only for themselves, for the benefit of all stakeholders, sometimes at great personal financial cost and risk to the CEO. The consequences of all these decisions becomes part of the brand of the CEO. Almost no other job puts people in such a spotlight in whatever sphere or community they function except for jobs in entertainment and sports, etc.
People. If CEOs sometimes appear sociopathic, it might be based on how much they have to compartmentalize to get through the day. Employees wonder why CEOs often seem skeptical of employee engagement tactics and, in many cases, seem somewhat aloof or not fully engaged in their people. What employees don’t realize is that in their position CEOs see both the best and worst in people and as a result can become hardened, cynical, and skeptical. Because, invariably, if a CEO has run businesses for any time, he or she has seen it all: people who they thought would turn out successful failed; others they thought would fail, succeeded. People whom they thought had great ideas couldn’t execute, or people with bad ideas who spoke too often but could execute. People they trusted, who later betrayed them, usually with a one-sided justification, or people they distrusted who turned out to be true. Why? Because the CEO's dynamic with employees and customers is such that people often act differently than they would as family and friends because, to varying degrees, their employment and source of income and sense of purpose and well-being are tightly connected with the CEO or the organization. This makes people act in unpredictable ways that they might regret later in life, and this applies as much to employees and customers as it does to CEOs.
Based on what I have seen or experienced, even the most well-intentioned CEOs might face the pressure of:
Customers, local community activists, employees, unions, even organized crime seeking to extract or extort money or curry favors in inappropriate, unethical and sometimes illegal ways.
Legitimate or arbitrary dissatisfaction of investors or owners for failure to perform as forecast.
Competitors seeking to undermine your organization’s credibility with false claims.
Spurious legal suits used for the purpose of constraining the organization’s activities or by employees exploiting local state statutes on dubious premises for the purposes of negotiating a “settlement.”
Bad-mouthing by a disgruntled employee, whether merited or not, for self-rationalized aggrievements.
Unexpected changes in zoning, tax laws, regulations, insurance, technology requirements, office rent, a nutty and litigious customer, etc. can at any time fall into the CEO’s email or voice mail box, wherever they are and whenever.
Multiple requests for investments, donations, favors; to help out someone’s child, a charity, get someone a job, etc., and the more successful the CEO, the more numerous, large, and organized the requests.
A sudden death or illness of stakeholder or loved one, fire or flood or threat of one, infrastructure issue, squabble between key employees or board members, etc.
An unexpected and particularly ill-timed resignation or loss of a big customer due to unforeseen circumstances.
A sharp market or marketplace downturn or disruption.
Most people in most organizations can pass the buck on the worst of these issues, and we know where all of them end up. If all crumbles, in many cases the CEO is the last one on hand to sweep up the mess.
Why We Take the Side of CEOs
Until we see evidence that an organization without a CEO can thrive, or that there is even the economic basis for such a model, we think the focus should be on helping CEOs master the new strategic and systematic approach to addressing the interests of all stakeholders, rather than bash individual CEOs or do away with the role—even in a socialist society. A strategic and systematic approach to engagement and addressing the interests of all interested parties offers perhaps the best advantages of all to CEOs, and nothing is to be accomplished by bashing people if the goal is for them to see the light.
In my youth, before starting a business, I worked as a camp counselor; night-time bathroom cleaner in an office high rise; a painter for a real estate developer, overnight gas station attendant, a newspaper reporter, ad sales person, and copy editor, magazine editor and publisher, both in and mostly outside a union, and not one of those jobs came close to the pressure of being responsible for a business and people. I didn’t like every job, but for the most part the only person I had to worry about was myself and family.
In pointing out the failure of the current paradigm for CEO success, the goal of the EEA is not to disparage and criticize anyone willing to take on the job, shame people about their legitimate right to run their organizations lawfully as they see fit, any more than we would criticize on our web sites the many employees we all encounter who fail to do their jobs well. The goal of Enterprise Engagement and ISO human capital standards is to provide for CEOs a more strategic, systematic, sensible, and sustainable path to success that makes life better for everybody, including themselves.
A vigorous executive coaching industry has thrived for decades, and yet employee engagement and customer satisfaction remain at historic lows. What’s new? We believe that by addressing human capital management strategically, systematically, and sensibly across the enterprise, CEOs can achieve greater, more sustainable results, reduced risk, and an enhanced experience for all stakeholders and shareholders--not to mention a better night sleep for themselves, their significant others, board directors and employees.
Master the Principles of Enterprise Engagement to Achieve Organizational Goals and Enhance Your Career
Profit from a new strategic and systematic approach to engagement to enhance your organization’s brand equity; increase sales, productivity, quality, innovation, and safety, and reduce risks.
Get trained to become a Chief Engagement Officer for your organization.
Achieve ISO 10018 Quality People Management Certification to demonstrate your organization’s strategic commitment to people to your customers, employees, distribution partners, vendors, communities, investors, and regulators.
Learn how to create Sustainability or Integrated Reports for Your Organization or Clients.
Get up-to-speed on ISO human resources standards and guidelines to enhance HR performance.
Live Education: Enterprise Engagement in Action. Take advantage of scheduled monthly live webinar preparation courses for the Certified Engagement Practitioner designation consisting of three one-hour classes and of quarterly Advanced Engagement Practitioner courses consisting of three one-hour webinar classes. The AEP course is for individuals or teams seeking preparation ISO 10018 professional certification status. ICEE periodically runs regional one-day workshops on ISO 10018 Quality People Management principles and certification.
Resources: The Brand Media Coalition, the only guide to the story-telling power of brands and where to source them for business, event, promotional gifting, and rewards and recognition. 2019 Enterprise Engagement Solution Provider Directory. The only directory of engagement solution providers covering all types of agencies and tactics as well as insights on how to select them.
Communities: The Enterprise Engagement Alliance and Advocate and the Brand Media Coalition free resource centers offering access to the latest research, news, and case studies; discounts, promotions, referrals, and commissions, when appropriate to third-party solution providers from participating coalition solution provider members.
Written specifically to provide CEOs and their leadership teams a concise overview of the framework, economics, and implementation process of a CEO-led strategic and systematic approach to achieving success through people. (123 pages, $15.99)
Enterprise Engagement: The Roadmap 5th Edition
The first and most comprehensive book on Enterprise Engagement and the new ISO 9001 and ISO 10018 quality people management standards. Includes 36 chapters detailing how to better integrate and align engagement efforts across the enterprise. (312 pages, $36.)
• 10-minute short course: click here for a 10-minute introduction to Enterprise
• Engagement and ISO standards on Coggno.com.
• 5-minute Audiopedia summary of the Enterprise Engagement field.
• The International Center for Enterprise Engagement at TheICEE.org, offering: ISO 10018 certification for employers, solution providers, and Enterprise Engagement technology platforms; Human Resources and Human Capital audits for organizations seeking to benchmark their practices and related Advisory services for the hospitality field.
• The Engagement Agency at EngagementAgency.net, offering: complete support services for employers, solution providers, and technology firms seeking to profit from formal engagement practices for themselves or their clients, including Brand and Capability audits for solution providers to make sure their products and services are up to date.
• C-Suite Advisory Service—Education of boards, investors, and C-suite executives on the economics, framework, and implementation processes of Enterprise Engagement.
• Speakers Bureau—Select the right speaker on any aspect of engagement for your next event.
• Mergers and Acquisitions. The Engagement Agency’s Mergers and Acquisition group is aware of multiple companies seeking to purchase firms in the engagement field. Contact Michael Mazer in confidence if your company is potentially for sale at 303-320-3777.
Enterprise Engagement Benchmark Tools: The Enterprise Engagement Alliance offers three tools to help organizations profit from Engagement. Click here to access the tools.
• ROI of Engagement Calculator. Use this tool to determine the potential return-on-investment of an engagement strategy.
• EE Benchmark Indicator. Confidentially benchmark your organization’s Enterprise Engagement practices against organizations and best practices.
• Compare Your Company’s Level of Engagement. Quickly compare your organization’s level of engagement to those of others based on the same criteria as the EEA’s Engaged Company Stock Index.
• Gauge Your Personal Level of Engagement. This survey, donated by Horsepower, enables individuals to gauge their own personal levels of engagement.
For more information, contact Bruce Bolger at Bolger@TheEEA.org, 914-591-7600, ext. 230.
[return to top]