Alien CEO- Should a CEO be homegrown or from external world

This article debate about whether a company should look for a CEO from internal or should look for external CEO- An Alien CEO who is not aware of the company DNA and work culture (Generally re-organize to ensure company working aligns to his thought processes) . Company Board often debates whether the top post should be given to internal/external person. Similar discussion has been in sports whether the nominated coach would be a player who has served the country or outsider. I have tried to debate pros and cons in this article and put across a few case studies which are part of the organization struggling to survive through an Alien CEO. All companies’ wants a HEAD of the company who become a face to the world and internally should manage the trust among the employees, customer and other stakeholders. As this being important position, companies tend to search for a perfect man to run an organization. A home grown individual understands DNA of the organization or an outsider who bring fresh thought process to target growth story of the organization. These are debates which are done in the closed room in the board meeting.

Homegrown CEO

In defense, we have never heard Head of services is from outside of the serving field. Never heard any of the serving soldier complaining about the leadership skills. They had served unknown territory and completed their task. However main reason is acceptability within organization. Soldiers take pride in working in the organization and motivated to sacrifice their life for nation. Also process and grooming HEAD has gone through during his tenure in ARMY. Head of the ARMY doesn’t need to spend 1 year taking transition for fit for the job. He knows that country’s CURRENT/FUTURE survival depends upon his action. Army has a rule that each person should be groomed to perform duties atleast for next level. In one of the TED conference, an ARMY was explaining reason for doing this was to ensure during combat operation, they have leaders who take decision and other oblige to the command. I have used above connotation to emphasize organization look to services for innovation in technology and they should learn how service organization work.

Companies groom and make leaders to perform next level leaders who would take organization to growth and profitable growth. Decision of these leaders would ensure survival for next decade or so. Large organizations (Like GE) have track records of identifying group of high performing individuals who are groomed within the organization and one of them is alleviated to the top position, others are given senior position in eth organization. Homegrown leaders, understand the DNA of the organization. What are area which have worked in the past and they apply their skills, this knowledge to take company forward. They act as pillars to make foundation for others in the organization to grow. Individuals are aware of the nitty gritty what/why things have worked (or not worked). They are aware of the expectation from all stakeholders. Another advantage of homegrown CEO is that he would be an expert in the businesses and also had made his hand dirty would be polished person in the business area. This person had dreamt while working of making a place better and profitable way to do business.

An Alien CEO

Company’s board try to find CEO within to get growth target set by the companies. However always tempted to hire from outside with capabilities to put the company in growth trajectory where it can grow beyond industry standards. New blood brings new ways to look to existing problem and solve in the way which might not be thought through by existing management. Management believes new CEO will bring a magic wand which would solve existing problem and move the companies to the next level. One thing management should understand, new blood which is brought should mix with others and create better product. Person should reduce friction which could be accepted, not management impose on the company. New Head starts bringing new structure of the growth which he things (generally inspired by his previous organization). He bring external consultancy agency to sell his idea of change where his close aide gets the hire position. This leads to ignore people who understand the DNA (organization RISK losing those resources, as good people always get job, people who are lazy struggle and continue the organization). Consultants and Head continue to transform without taking key inputs of DNA (why the organization exists) into account. New Head should understand that things which work in his previous organization would not work if that is copied (if copying of things worked, there would atleast 100+ Google or 100+ Microsoft companies). Each organization has a unique value with competency which include Humans which they should exploit to maximize their business. They should understand people are not switches where software could be downloaded and organization changes. However need to ensure they are motivated so that they are ready to accept the change and work for growth of the organization.

Before getting into few short war stories, would like to emphasize Head should take care of customer which bring revenue to the investors however need to ensure that ARMY who works at the frontier is united, motivated and work for satisfaction for the customer to retain and along with customer business. We need to ensure CARROT and STICK at work. Too much of stick or carrot spoil the coordination. Quick check for any CEO, if employees say that they are not motivated, it clearly shows organization is brink of downturn. If the number grows of demotivated guys is in the range of 5-10% person, it shows end of division and add another 10%, it would mark end of the organization.