#011 - Why a CEO Stepped Down so an Intern Could Take Over /w Hermann Arnold

 

Show Notes

Episode Contents

 

In this episode we will answer some of the following questions:

  • Why my guest voluntarily stepped down as a CEO in order to give a former intern his position
  • How his successor and customers reacted to this decision
  • How a manager recognizes the point where he or she is not the right person anymore to continue to lead the company
  • What it felt like coming back to the company and working under the new CEO
  • How he handled the conflict of his successor implementing his ideas with success
  • Why more companies should think about limiting the terms of their CEOs
  • What he learned from letting his employees vote for managers and why he believes this might not be the solution for the future

 

Summary

 

  • Despite all the talk about agile and other forms of organizations, there are still very few that dare to try new things out. But in these uncertain times, we desperately need pioneers all over the world to have the courage to try new things.
  • Sadly, we still have this idealised view of CEOs and managers that they should be all-knowing, free of faults, essentially the perfect leader at any growth stage of the company. That‘s not only unrealistic, but harmful for the managers, the company and thus its employees. No one is good at everything. So why don‘t recognize this fact and apply it to companies at well. The stakes not to apply this is so much higher in corporate environments than elsewhere.
  • In order to apply this thinking we also need to get over this societal stigma that stepping down is regression in ones career. And having term limits makes a lot of sense too. Nobody would argue that successful leaders in politics are failures when they step down after their term limit is up. Why don‘t we apply the same to the corporate world?
  • When we think about how companies are structured today, we can clearly see that they haven‘t fundamentally changed since the industrialization? The most common type of organization we find in companies today is the functional hierarchy - the same organization Frederick W. Taylor postulated in his management theory.
  • But with todays challenges this type of organization will fail, irrespective of modern technologies. Companies can automate and digitalize whatever and how much they want, this will not lead to a fundamental change in how companies operate and adapt to changes. The powers at play are culture, beliefs, values and many others. And these are far more powerful than any buzzword like „digital transformation“ that gets thrown around these days.
  • Also, you can‘t expect employees to work in cross-functional teams and think laterally, if you still have silos or departments in your company and compensate your employees based on these silos.
  • But this requires that managers give up power and control. Power and control are essentially a myth, because even in a functional hierarchy you always some interconnectedness. Power also provides managers with a status quo and that‘s hard for most managers to give up.
  • Today, more than ever, we need to solve problems across disciplines. Yet, todays organizations are setup in a way that contradicts what the leadership of corporations are claiming: Work in cross-functional teams and be creative, but incentives its employees based on their silo. How has that ever worked?
  • Our world has become too complex and is moving faster. Yet the organizational structures of companies (those pyramids) have not changed. By the time the information about the market, competitors and others are channeled up to authority, where it is then analysed, proceed and pushed back down with a decision the market has moved on. What we need instead for companies to utilize the subsidiarity principles. Let those who have the information decide. This is something David Marquet a former nuclear submarine captain states: “Don’t push information up to authority. Push authority down to information.”
  • Another aspect that is extremely valuable for managers and especially CEOs, is stepping down (even if it‘s just temporarily, say for a month a year) to work under the people you were managing. There‘s a lot of insights and personal growth to be had in this way.

 

Links & Resources Mentioned

 

Links Mentioned

 

Articles Mentioned

 

Books Mentioned

 

Videos Mentioned

 

Companies Mentioned

 

People Mentioned

  • Jitske Kramer
  • Stanley A. McChrystal, retired United States Army general (best known for his command of Joint Special Operations Command (JSOC) in the mid-2000s)
  • David Marquet, former Commander of the nuclear submarine Santa Fe)
  • Ricardo Semler, CEO and majority owner of Semco Partners, a Brazilian company best known for its radical form of industrial democracy

 

Follow/Add the Podcast Host/Guest on:

David C. Luna:  LinkedIn | XING |

Hermann Arnold: LinkedIn | Demokratie21


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#011 - Why a CEO Stepped Down so an Intern Could Take Over /w Hermann Arnold

This podcast looks at innovators and companies that are changing the game and how they took their initial idea and created a game-changing product or service, while giving you unique perspectives and insights you’ve probably haven’t heard elsewhere.

David and his guests discuss real-world practical advice on how to best harness the creativity of your employees and go from idea to product or service that has the potential to radically transform your business.

They also share lessons they’ve learned along the way to effectively accelerate, incubate and scale innovations within small, medium and large enterprises, all while separating hype from reality and replacing bullshit bingo with common sense.

The show is hosted by David C. Luna, author, keynote speaker and founder of GAMMA Digital & Beyond.

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