One of my overarching arguments is that, in general, leaders are weaker than they used to be and followers stronger. This seems to me to be so easy to see in politics, it’s little short of obvious. But, arguably, it’s less obvious in business. After all, for a constellation of reasons, strikes, boycotts, protests and the like are less frequent than at other points in history, certainly in the U. S. So, since employees at least seem on the surface to be relatively quiescent, leaders seem on the surface to be relatively secure.
But, as I wrote in the current issue of The European Business Review (EBR), while examples of encroachment by followers on leaders in the corporate realm may be less apparent, they are no less real.* Like their public sector counterparts, private sector leaders and managers are obliged in this second decade of the 21st century to tend to their various followers, stakeholders, in ways that historically are unprecedented.
In my particular parlance, “stakeholders are all those whom leaders need to align if they are to accomplish what they want and intend.” In this category are a range of players including, in addition to employees, shareholders, customers, competitors, and activists. As I put it in EBR, “Never before were CEOs told (implicitly or explicitly) to be so considered and considerate of their different stakeholders – followers. Never before were CEOs tasked with managing the web, social media, and other (present and future) mobile and interactive communications and information technologies. Never before were CEOs instructed to ‘orchestrate co-creative engagement’ … and to ‘support a participatory culture.’” Never before, in short, were so many corporate leaders rendered so anxious by so many cautions concerning corporate followers.
If you look – that is, if you train your lens not on leaders, but on followers, on those who once went meekly along – you’ll see what I mean. CEOs are more vulnerable than before, particularly perhaps to big shareholders, institutional investors, who, as Bloomberg Businessweek put it, had long been “dutiful supporters of management,” but who now “aren’t keeping quiet anymore.” (11/26-12/2)
Even when things are good, investors and analysts are at CEOs in new and different ways, demanding their time and attention, insisting they explain themselves and defend whatever their decisions. According to the Wall Street Journal, C-level executives are attending 64% more private investor meetings than they did just one year ago. Why? Because they feel they “cannot afford to decline a meeting request.” ** Moreover, when things are bad, the pressure on CEOs is that much greater. When WellPoint missed analysts’ earning estimates for the second time in three quarters, a group of investors promptly demanded the ouster of CEO, Angela Braly.
Boards have gotten into the act as well. When as it became clear that Groupon was in trouble, the pressure on founder and CEO Andrew Mason was on. Apparently the board had no compunctions about signaling its willingness to shift Mason’s role, even potentially to replace him. This was in spite of the fact that as Groupon’s founder, Mason and his company were until now one and the same.
Whatever the corporate veneer, beneath it lurk roiling waters, with leaders vulnerable to changing cultures and technologies in business just as they are in politics. As Harvard Business School professor Rakesh Khurana recently put it, “We’re seeing a radical transformation in corporate control and the relationship between management, directors, and investors. It used to be shareholders pushing against boards who were buffering the CEOs. But now investors are telling directors who should be the CEO and how management should run the company.”
** Leslie Kwoh, “Investors Demand CEO Face Time,” 11/28.