I just finished reading a post by Jennifer Miller that pointed out the benefits of MBWA (Management By Walking Around – classic Tom Peters) where Jennifer provided 8 valuable tips for making walking around more productive. MBWA is both a practical and productive use of time for a CEO. I respect Jennifer’s work and find no flaw whatsoever in her encouragement to CEOs to spend more time with their employees and directors. What I take great exception to is the research study conducted by Harvard Business School that was cited in Jennifer’s post. The HBS research is laughable, and lends credence to the old axiom “don’t believe everything you read.” While I find more than a few flaws in logic with the HBS study, let me be clear, none of the flaws I identify below have anything to do with the 8 points referenced in Jennifer’s post with which I agree.
Having a sample pool of CEOs that I’ve worked with which is far larger than that of the 94 CEOs tracked in the HBS study, I can tell you with great certainty that my experience differs from the conclusions drawn by the professors who authored the study. In fact, I’d be willing to bet that if I interviewed the 94 CEOs tracked in the study they would agree with my conclusions more than those produced by the study itself. The following statement exposes either an extreme bias or a very healthy naïveté: “the time CEOs spent with outsiders had no measurable correlation with firm performance.” The aforementioned statement is utterly ridiculous and patently false.
To be fair, CEOs who squander their external facing time don’t get much of a return on said time, but then again, they don’t typically remain in the C-suite for very long. However my experience with CEOs is that engagement with external constituencies is highly productive. Following are a few questions for you to ponder – When a CEO meets with a prospective customer and generates a huge contract, does that not impact performance? What about when a CEO favorably negotiates a contract dispute that both saves an existing account and avoids costly litigation – no value here either? How about when a CEO improves credit accommodations which result in substantial reduction in interest carry? I guess that doesn’t count as productive either. While I’m at it, I guess an accretive acquisition, lowering manufacturing costs by making supply chain enhancements, making key external hires, or opening new distribution channels or geographic markets probably didn’t get on the radar screen of the faculty either.
The study had other flaws such as viewing CEOs as predominantly management types as opposed to leaders, inaccurate allocations of how CEOs spend their time, and other fallacies that could only surface in the halls of academia. The point I want to make here is just because research is produced at a business school, shouldn’t automatically qualify it as good research. Bottom line – just because this study found no correlary between CEOs spending time with constituencies outside the company and gains in performance doesn’t mean they don’t exist. It just means that the study was biased, flawed or both.
Thoughts?
…but your commentary on it is even more flawed, and based on your own limited (and statistically biased) sample. If you understood the nuances of research, you would realize that in the context of philosophy of science that the HBR study represents n=1, and your observations can perhaps — if we are generous — qualify as the 2nd observation. This 2nd observation is equally biased and flawed, if only because of your personal self-interest.