Star CEOs: Benefit or burden?

Abstract

magine that one day you get a call from anationalnewsmagazinesayingthey wantto write an article proÞling the great job youare doing as CEO. They might even make thearticle the cover story! In encouraging you toparticipate, they tell you the article willincrease the visibility and reputation of bothyou and your Þrm and is likely to lead tomore recognition in the future.How should you feel about this impend-ing wave of media attention? Should younonchalantly recognize this as part of whatit means to be a successful CEO? Should yoube excited and embrace your new fame, per-haps writing a book to elaborate on yourrecipe for success and mounting a speakingtour? Or, should you be leery that fame maybring withitthe burdenofincreasedscrutinyand higher performance expectations thatyour Þrm may or may not be able to meet?At one time or another, these questionsare likely to confront any CEO of a large,high-performing corporation. Given thepressure put on media outlets by 24-hournews cycles, coupled with our celebrity-obsessed culture, it is little wonder that thebusiness press has turned the powerful butheretofore largely anonymous CEOs ofAmericaOs most successful corporations intocelebrities in their own right. Thus, top man-agers would do well to consider these ques-tions, because more and more researchsuggests that media attention and adorationbrings with it both beneÞts and burdens. Onthe one hand, certain CEOs are recognizedand gloriÞed by the media and are given adisproportionateshareofthecreditforfavor-able Þrm outcomes during their tenure. Butbeneath the surface of the mediaOs glare is atangle of burdens that can make it difÞcultfor star CEOs to stay on top. And when acelebrity CEO falls from grace, the fall can berapid and complete.Before the collapse of Enron Corp., forexample,KennethLaywashailedasavision-ary who was revolutionizing how the publicutility industry did business. In less than afew months time, however, these accoladesturned to jeers and Lay was cruciÞed in thebusiness pressfor hiscompanyOsshoddyandmisleading accounting practices. Similarly,Dennis Kozlowski was widely praised for