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The Very Model of A Modern CEO Spouse

HR Magazine, October 2004Women in leadership roles may be set up to fail; middle managers’ skills surpass those of their bosses; CEOs cite challenges in 2004; more.

CEO spouses receive no salary and have no formal role, but they can have a tremendous impact on the success of their CEO partners and, therefore, on the success of the organization.

Should companies create a job description for the CEO’s spouse? Corporate psychology consulting firm RHR International suggests that, just as new CEOs negotiate a contract that defines their role with the company before they begin the job, husbands and wives should consider negotiating an agreement about the spouse’s role with the company.

Grant Levitan, managing director at the Chicago-based firm, describes the process as “more like a menu than a job description.” He suggests that the CEO and a trusted adviser—usually an HR professional—should sit down and draw up a list of “all the things a spouse could do, and maybe some things they shouldn’t do.”

The next step is to discuss the possibilities with the spouse. No one could do everything well, Levitan says, nor should that be expected. The key is to identify some things the spouse enjoys, some things he or she is good at, and some things the person enjoys but doesn’t feel that he or she does well. The company can provide training as desired.

Levitan says it may be helpful to offer spouses a personality inventory such as the Meyers-Briggs test to help them assess their strengths. The bottom line is that “there are no ‘shouldisms’ here” says Levitan. “A spouse shouldn’t be forced to do anything he or she doesn’t want to do.”

CEO spouses also can choose to disassociate themselves from the company and play no active role at all, says RHR senior consultant and psychologist Henry Tufts. “You can have the Laura Bush model, the Hillary Rodham Clinton model or something in between,” he says.

Because the demands on a CEO’s time are enormous and the boundaries between personal and professional life can be blurred, a healthy marriage is critical, says Tufts, who has worked with CEOs and their spouses for 23 years. “A dysfunctional marriage is a major distracter that affects the company negatively,” he says.

In an age when two-career families are common, the spouse also may have a high-power job. Overall, a spouse’s influence may be less today than in years past, but it may be more informed because the marital partner brings the perspective of another career professional; for that reason it may be more helpful, says Tufts.

The Glass Cliff

Women who succeed in smashing through the glass ceiling and achieving leadership roles in British organizations may find themselves perched precariously near the edge of a “glass cliff,” says a British psychologist.

A recent study from Cranfield University ranks FTSE 100 companies in Britain in relation to the percentage of women on their boards of directors. Of the five companies with the highest percentage of female board members, three underperformed the FTSE 100 in 2003, while the five companies with wholly male boards of directors outperformed the FTSE 100 during the same period. University of Exeter psychology professor Alex Haslam says the study has been interpreted by some as evidence that women were “wreaking havoc in the boardrooms.”

But Haslam found evidence that women are being hired to leadership positions only once a company is doing badly. The precarious position of women in these jobs is “the next wave of subtle discrimination,” Haslam believes.

Not only do women face greater challenges than men in climbing the corporate ladder, but those who reach the top receive greater criticism than men and less positive performance evaluations for performing the same leadership roles, Haslam found. “Positions on glass cliffs … [are] exceedingly dangerous for the women who hold them.”

CEO Challenges In 2004

The greatest concern for CEOs around the world this year is “sustained and steady top-line growth,” according to a Conference Board report, CEO Challenges 2004: Top 10 Challenges. Other challenges on the overall top 10 list, in order, include the following:

  • Speed, flexibility and adaptability to change.
  • Customer loyalty and retention.
  • Stimulating innovation and creativity and enabling entrepreneurship.
  • Cost and ability to innovate.
  • Availability of talented managers and executives.
  • Tight cost control.
  • Succession planning.
  • Seizing opportunities for expansion and growth in Asia.
  • Transferring knowledge, ideas and practices within the company.

The New York-based think tank’s report identified some global differences. CEOs of Asian companies are more concerned with people issues such as stimulating innovation and acquiring top talent, while U.S. and European CEOs are focusing on sustaining top-line growth as their economies recover. Kyung H. Yoon, vice chairman of Heidrick & Struggles, which co-sponsored the report along with PeopleSoft, says, “Asian cultures are risk averse as to losing face so that they are less likely to take on projects which might be ‘out of the box.’ The fear of failure is a large inhibitor to risk-taking, creative thought and behavior.”

Among other findings: vigilance on ethics issues ranked among the top 10 concerns only in the United States, and employee loyalty ranked high in the United States and Asia, but didn’t make the top 10 list among European CEOs.

Go to the Head of the Class

Your middle managers may be moving ahead of you in terms of business-related skills. “Middle managers are becoming smarter than their bosses,” says David Silverstein, president and CEO of Breakthrough Management Group, a Long-mont, Colo.-based business performance improvement and training consulting firm. As companies invest in manager training, many of their middle managers are learning new skills, including decision-making skills that may be better than those of the bosses.

Over the past few years, Silverstein has seen a “generation gap” among different levels of management when it comes to training. Silverstein says the executive education market tends to target employees who are being groomed to become executives. Those already in the top ranks “aren’t accepting the need to refresh their own education. Attending conferences and two-hour seminars isn’t enough,” says Silverstein.

“Executives need to develop their own skills by getting into a classroom,” Silverstein maintains. This might mean enrolling in an executive education program at a business school or attending specialty education classes customized for the needs of the executive’s particular situation. “For example, if you are trying to drive innovation as a core competency for your company, you might need to tailor a course that is specific to your company and its innovation needs,” says Silverstein.

Some CEOs also need to be more hands on and less quick to delegate. Silverstein says many executives have been taught that it’s good to delegate, but “the pendulum has swung too far.” Important strategic problem-solving and decision-making may get delegated too quickly. The most senior-level executives should be the best problem-solvers, he says, but some CEOs simply lack these skills.

“Formal education once in a lifetime is no longer sufficient. In light of all the technology and globalization and legal changes we’ve seen in the 1990s, I think formal educational renewal should be happening every 10 years to 20 years,” Silverstein says.

Time To Renew Outsourcing Contracts

Many first-generation benefits and HR outsourcing contracts negotiated five to seven years ago will be up for renewal during the next 12 months. “Industry consolidation and changes in service needs make this a great time for companies to negotiate their next outsourcing contracts,” says Robert Crow, a senior consultant at Watson Wyatt who advises large companies on their contract renewals. “But lowering costs and improving service quality isn’t automatic. Companies must be proactive in their contract renewals to get the most competitive deal,” he says.

Original outsourcing contracts were set up without much information on such things as usage levels. Many employers wound up with higher than expected outsourcing costs because locking in long terms in the original contracts prevented them from negotiating lower rates after a few years. Vendors also profited when an employer’s population size changed dramatically and the contracts did not include reasonable transition fees.

Today, employers have several years’ worth of data available, and they should take advantage of the opportunity to reduce costs and improve customer service, Crow says. Advances in technology and the growing use of web-based transactions, for example, mean fewer calls to customer service call centers, which can cut staffing requirements and costs. Companies also should solicit input from employees to get a better perspective of actual service quality and cost savings and take this information into account when revising the contract.

Crow suggests that companies consider shorter contracts or contracts that allow for mid-term renegotiation. “We have seen a continued reduction in various service charges over the last six years,” he says. “Because we expect this trend to continue, locking in to a long-term contract may not provide the best deal.”


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