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September 23, 2006
Rockstars and Corporate Scandals
This morning I read an interview with a rockstar that was famous during the 1980s. In the interview he describes what fame meant to him. As of his childhood he dreamt of fame, and wondered how it would be. It turned out to be more beautiful than he had hoped, and more horrible than he had feared.
In the interview he particularly describes the drawbacks of being famous. You dont control your own life and your own destiny anymore. Other people determine who you are, and that makes you loose yourself. The way you perceive yourself starts to drift more and more in the direction of the image the world has of you. But the world puts you on a pedestal, thinks you are a hero. And you are not a hero, something you know deep down. Over time the gap between who you are and who you are supposed to be widens. You thought youd become independent, but you become dependent. You thought all the money would bring you freedom, but eventually being rich becomes a trap.
Let these words sink for a second...
Wouldnt this phenomenon be the most obvious reason for all the corporate scandals we have seen -- and the ones we will undoubtedly see? Many have commented that celebrity CEOs feel they are invincible, that everything they touch turns into gold. But isnt the opposite more likely? These CEOs know they are no hero, they know they dont control everything? That might be the reason why, in desperation, they turn to the one thing left they can control, what they can turn into gold all the time: the numbers.
The problem with fiddling with the numbers is that it widens the gap between reality and how the organization perceives it. It then creates an even higher expectation from the outside world, and that gap widens too. And at one moment you fall into that gap. Unavoidable. It happens within companies, trying to live up to the expectations of our boss. It happens with complete companies needing to live up to the expectations of Wall Street.
How can we prevent this from happening? I think we need to redefine one of the most important success factors in business: alignment. This is often defined as the extent to which we all focus on the same goals. But that exactly is the reason for the phenomenon to kick in!
In my mind, alignment is the extent to which an organizations self, self-perception and external perception closely match. How honest the management thinks about its own performance, and manages the outside world accordingly. Business Performance Management (BPM) can help. Today it is often used inside out, how to optimize our objectives. And where they dont meet the objectives of the outside world, we create strategies to conceal or explain the difference. BPM should also be seen as an outside in initiative. We should understand the different requirements our multiple stakeholders have, and be brutally honest in how we can fulfill as many as possible.
It might seem just a semantic difference, but thats not the same as maximizing shareholder value.
Posted by Frank Buytenkijk at September 23, 2006 3:23 AM
