When Picking a C.E.O. Is More Random Than Wise - NYTimes.com
Deal Professor 7/24/2012
About Board selection of CEO's: James Rodgers at Duke Energy and Marissa Mayer at Yahoo
EXCEPTS:
There is little solid research on what makes an effective chief executive, which makes choosing a candidate the product of a board’s vision and personalities rather than one of careful contemplation.
"I’m reminded of an exercise I once did at an old law firm retreat run by a group of consultants...
This result is in accord with research on small-group dynamics and decision-making. The selection of executives is influenced by directors’ own biases and backgrounds... This is influenced by a group negotiation process that depends on the people and personalities involved. In the end, these boards tend to pick people who reflect themselves and the world they already know — something that psychologists call the confirmation bias.
The decision to pick a chief executive is often steered by flocks of high-level recruitment consultants. Recruiters are paid millions to have a stable of candidates that they feed to boards, steering the process in pursuit of the board’s sometimes ill-defined wishes. This inherently limits the pool of candidates and further pushes boards to confirm their own biases in any selection.
Ms. Mayer and Mr. Rogers may do terrific jobs at their companies. But their appointments do not necessarily mean that they are the best candidates. Rather, their selection is a result of random and nonrandom factors."
Access Article And It's Insights: http://dealbook.nytimes.com/2012/07/24/when-picking-a-c-e-o-is-more-random-than-wise/?smid=pl-share
No comments:
Post a Comment