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| Bernd Pischetsrieder at the St. Gallen Symposium in May 2005 |
Imagine that your
CEO secretly goes for a test drive on a Formula 1 race car (627 PS) and
crashes the Deutschmark 1.5 million-object on a Bavarian country road, hurting
his wife, a friend and himself. Imagine that he doesn’t tell the details of the
accident, tries to cover it up and even gets investigated for negligent injury.
Sounds ludicrous? Well, Bernd Pischetsrieder, the former CEO of BMW, probably wouldn’t
think so: the story retells exactly what he did in 1995. While nowadays the media
and the internet would be all over him, in the 1990s Pischetsrieder got away
with his improper behavior and nobody really seemed to care about the motor misdemeanor of the head of one of Germany’s biggest car companies. However, four years later, Pischetsrieder was fired after his deal with Rover resulted in billions
of losses for BMW.
Now fast
forward to 2006. Pischetsrieder has become CEO of Volkswagen by now and is
performing, numbers-wise, brilliantly. Nevertheless, due to personal quarrels with
chairman of the supervisory board, Ferdinand Piëch, and stakeholders’ loss of trust in
his vision and decision-making abilities after he revised some of Piëch’s choices, Pischetsrieder
is again ousted. The
circumstances had changed. While in 1995 he could rely on his strong
performance, in 2006 he was relieved due to perception problems that wouldn’t have mattered
ten years before.
A CEO not
only needs to perform well, he or she also needs to be the company’s guiding light, an
integral person who leads the way and provides orientation,
conveys a clear and strong vision and is trusted by his stakeholders to make
the right decisions for the company.
Interconnectivity,
Web 2.0, unknown unknowns: the circumstances leading to
being that symbol of
strength, confidence and assertiveness have become increasingly unreliable and
challenging.
VUCA – four
simple and innocent letters that denote the dense and difficult complexity of
today’s business world. VUCA is a concept that defines a CEO’s surroundings: Volatile,
Uncertain, Complex and Ambiguous. The conditions of a CEO’s job are now more
unpredictable than ever. Shitstorms come and go and stability can only be
reached through constant and active management of one’s public image.
The new media
landscape is a reason why the CEO’s world is ruled by uncertainty and
complexity. Just think about the sheer increase of media channels from the
1990s to today: a top-level CEO crashing a Formula 1 car would be grilled by journalists and bloggers within minutes nowadays. Top managers are in
the limelight 24/7 and must act as their company’s guiding light in a VUCA world –
and yet they can’t control half of what is produced and
written about them in the increasingly social and interconnected media with
the constant 24/7 news cycle. All kinds of minority opinions find their way
to the top through Twitter, Facebook or YouTube and can seriously harm a CEO’s image. The
media were never as tough a watchdog over CEOs as they
are now. That also has
to do with a change in focus as business journalists, too, live in the VUCA world
and try to break down new complexities into familiar and comprehensible
patterns. While in the 1990s media channels mainly scrutinized the companies, today the subjects are the CEOs themselves, including their behavior and personal lives.
In order
for that guiding light to shine, perception, not merely performance, needs
serious attention and management.
You can
read more about the study here.
Image credits: commons.wikimedia.org, flickr.com
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