We maintain that Welch ushered in the phenomenon of the "imperial" celebrity CEO and the aura he and other celebrity CEOs created has contributed to a culture in the executive constellation where image and appearance takes precedent over substance
The "I want to be like Jack" mantra was so pervasive in corporate America and B-Schools that many executives came to believe that achieving celebrity status was an integral part of being an executive and such status would increase their managerial prowess and wealth.
Following Welch and other contemporary CEOs the new corporate strategy was simple; quickly build the corporation's profitability by "cutting costs" (this means mass terminations), make the shareholders happy, obtain millions in compensation, hire people to make one a celebrity CEO, get the golden parachute, write a book, and go on the lecture circuit telling others how they did it. And if you are too young to go to the lavish CEO graveyard (country club) you may get to go to another company. In the 1970's, 15 percent of CEOs were external hires and, in the 1990's, that number grew to 26 percent (McLean and Elklan (2003). Today 25 to 30 percent of all CEOs are brought in from the outside. The increase in the numbers of external CEO hires results from Corporate Boards infatuation with these "sexy" corporate stars. This begs the question: What is the function of all this money and perks?
Macho Culture
Many executives, junior executives and B-school students and their professors believe that a key element in the CEO role is to take on characteristics of a Welch and other celebrity CEOs. Consequently, a set of expectations associated with the ideal CEO type is firmly imbedded in the culture of American corporations. CEOs are surrounded by executives who expect them to behave in a certain way and possess the accoutrements of the role. In addition they are taught in B-school the demeanor and behavior of an ideal executive. Training, education and value system adopted by contemporary executives is a way of protecting oneself against an array of feelings and fears: failure, inadequacy, fraud, and anxiety.
If we consider the climb up the corporate ladder there may be elements of narcissism at play for one to be able to engage in this long and difficult endeavor. One must be visible and stand out and be continuously successful and avoid failure. Also, the higher one moves up the ladder the more narcissist elements are at play. It may also be that the higher one moves up the social and economic ladder the more one tends to take on narcissistic characteristics. It is important to remember when a CEO goes to the office he is the king, the celebrity. In the corporate world, employees play into the idea that the top executive is vastly more important than other people, and this can trigger a narcissistic condition that might have been only a tendency, or latent. Being in the catbird seat may cause a person with some mild narcissistic characteristics developing into acquiring a full-blown narcissistic personality disorder. This is referred to as an Acquired Narcissistic Condition (ANC) and we will discuss this condition in depth later.
We know that narcissists have very different needs than non-narcissists. We know they have greater needs for celebrity status and to show off to colleagues, friends, family and those at the country club. We know that big compensation packages are important. We also know they have little empathy and they are primarily concerned with themselves and "feathering their own nest." Consequently, they have the capacity to terminate employees as if they are using a "remote control," they press the button and the channel (employees) disappears.
This is one reason many CEOs follow Welch and create what is called in Spanish the "pelotazo" (or hard ball) culture. Symbolically this means tough, strong and powerful as opposed to weak or limp. This leads to the creation of an executive constellation "culture," where success is measured exclusively in meeting the numbers and success is reduced to a mathematical issue. High fives are given to those who meet numbers and those who do not break out in "cold sweat" with the knowledge their days may be numbered. This is a "macho" culture where toughness is paramount. The only overt displays of emotions are for "winning," achieving, and celebrating. Hitting a "home run" is the common metaphor used in the executive suite.
Meanness and plotting is necessary if one hopes to survive. These cultures can quickly turn into "gotcha cultures" where the wolves gang up on those who are either threatening or weak, especially in a company that uses a "forced ranking" performance review system. If one thinks bullying is an epidemic in Middle schools, hang out in a corporation. What function do these cultures serve? From a psychodynamic perspective they function as a defense against feelings associated with weakness; like caring, showing concern, or having empathy. These are dangerous feelings especially in the era of "downsizing," "reengineering," and "cost cutting" where terminations are weekly occurrences. We now see why "spreadsheet or dashboard management" is in vogue and accepted practice among these executives. If one manages by the numbers it serves a distancing function and lessens emotions that evolve as terminations abound. In addition employees keep their heads down and noses to the grindstone, working longer hours, never complaining, always "kissing up," hoping they will not be next.
What we have is an array of practices and actions that serve as a defense against the feelings that arise when one is running a corporation. If one considers the complexity of leading a corporation the job is wrought with so many uncertainties and potential calamities that most people in this position would have many sleepless nights. An executive came into treatment complaining his marriage was falling apart and uncertain if he wanted to save it. It appeared in the news and blogs that he had terminated 4,000 employees in a cost-cutting move, and was planning more actions. It seemed that the unhappiness he experienced in his marriage was a function of his inability to experience pleasure. He was racked with guilt.
We have established that greed serves several functions -- (1) It is a method to defend against angry, frustrated, bad, and destructive feelings that evolve when one feels helpless and impotent, (2) it serves as an act of replenishment when one feels guilt and shame associated with failure, and (3) it also serves a protective function among those executives who suffer from a type of paranoia that is typically associated with intense ambition, and compounded by feeling they are surrounded by angry people. Wealth serves both a psychological and physical protective function. In their psychological world they become mother's "good boy" and in their physical world they are insulated and away from the hoi poli, and protected from real and imagined danger.
But there is a down side. Like the infamous Gordon Gekko from the movie "Wall Street," these CEOs consume but are never filled. Like Gekko, these characters cannot engage in the finer differentiation between the needed, vital, or pleasurable acts. Gekko surrounds himself with beauty, but cannot see it. All he sees is value. When showing off a work of art Gekko states: "This painting here, I bought it 10 years ago for $60,000, I can sell it today for 600 [$600,000]; the illusion has become real, and the more real it becomes, the more desperate they want it -- capitalism at its finest." For Gekko the illusion is not the beauty in the painting, the illusion is himself as an admired, successful, and lovable man. For Gekko, this only becomes real when worth is articulated. His greed creates a rupture between the pursuit and consumption of the object, and the pleasure and satisfaction it is supposed to bring. Like Gekko these CEOs are the numbers people who see joy in metrics, dashboards and spreadsheets. For these executives "worth" is the new beauty and worth is found in the numbers. These executives do not like to use the word "numbers" they use the term "metrics" as a form of measurement, and success is a function of meeting the metrics and it did not matter how they the metrics are met -- outsourcing, terminations, closing factories, even destroying the company.
The question is how did this measure of success evolve? It became an institutionalized defense against the difficulties these executives experienced as young ambitious and eager managers. These managers found a way to manage without having to understand or deal with the softer underbelly of the workplace; namely its employees, their families and community. One no longer had to deal with the uncertainty of decisions. One could manage from a spreadsheet and from a distance. Two metaphors were commonly taught and used by executives; one was "numbers don't lie" and the other "numbers don't have feelings." The spreadsheet served as a way to see employees as "resources" reduced to a number with their worth to the company calculated and put into formulas. Where did they learn the value of this "bottom line" over simplified, cold and calculated form of management? In Business school.
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