A Tale of Three CEOs


by Maria Simpson

September 2013

Maria Simpson

This is a story about three CEOs who made whopping mistakes in managing both up and down, and as a result, nearly ruined their companies.

We know a lot about managing down, about supervising people who report to us and leading a team. We know we have to make our goals and standards clear, we have to oversee the work without becoming micromanagers, and we have to manage in a variety of styles that best suit the needs of staff members. For those who like lots of structure, we provide that structure at the beginning of the project and save time later by avoiding the mistakes and false starts because we missed a detail that took a staff member down an expensively wrong path. For the independent types, we provide outlines and guidelines, stay in touch, and leave them to work on their own, trusting that they know when to ask appropriate questions. Some people learn by doing, some by talking, some by reading, so we accommodate all those differences as best we can to keep everyone on the same path working toward the same goal.

But what’s managing up and how are we supposed to manage people over whom we have no control? Shouldn’t they be managing themselves? Once you hear the story of these three CEOs, the need for managing up will become very clear.

The company in question is a holding company with corporations and divisions of those corporations among its holdings. The CEOs are the CEO of the holding company, CEO-H; the CEO of the corporation, CEO-C; and the CEO of the division, CEO-D.

The CEO-C was told by executives at the holding company (not the CEO-H) that the corporation was being sold and would have to move, so the building the corporation was in had to be sold, too. Although he had reservations about the deal, CEO-C began the work necessary to sell both the corporation and the building. He signed a document saying that he agreed with the decision to sell the company, began the necessary due diligence, and found a buyer for the building. Of course all this took months and about half a million dollars in legal fees, realtor fees, time from several corporate staffs, and everything else that goes into a major change in organizational structure.

About six months into this process but before the sales were finalized, CEO-C was called to a meeting with CEO-H and her executive staff to review the plans and progress. This meeting was the first face-toface meeting he had had with CEO-H since well before the plans for the sale were explained to him. The two CEOs hadn’t met or talked much about anything in the three years that CEO-H had been in place. Instructions and decisions from CEO-H were conveyed to CEO-C through executive staff members.

At this meeting, CEO-C was asked for his opinion, and much to everyone’s surprise, he said he was against the whole thing. When asked why he had signed the document agreeing to the sale in the first place, he said that a member of the CEO-H’s staff had instructed him to do so on the orders of CEO-H, who looked surprised to hear that he thought he was following her instruction.

When CEO-C also said that selling the building was a bad idea, the CEO-H’s jaw dropped. CEO-H knew nothing about selling their building and had approved no such action. Suddenly everything stopped. The sale was put on hold, the building taken off the market, many hundreds of thousands of dollars were lost, and several very senior holding company executives were fired.

Why had CEO-C changed his mind, or at least not said anything against the proposal in the first place? Hard to know since the actions were confidential, but we can guess at several reasons. Maybe the sale would have made it difficult for the corporation to succeed with a new owner. Maybe neither the newly restructured holding company nor the new owner would have been able to accommodate senior staff from the corporation, including CEO-C, so the prospect of losing all those jobs was suddenly a reality that needed to be addressed. Maybe the financial details had become so clear and so negative that the looming reality forced an honest statement. Hard to know, but easy to understand the fallout.

CEO-H made classic mistakes in managing down, that is managing CEO-C. First, she never really established a working relationship with him. He was firmly in place when she became CEO of the holding company, and she failed to learn from him about the company and about him. With no established relationship and with messages being conveyed to him by executive staff at the holding company, there was no relationship to build on that would have prompted him to go to CEO-H and ask what the plan was and why she wanted to sell the building. That single question would have changed the course of the sale, but it wasn’t possible given the lack of relationship.

In addition, CEO-H clearly had no control over the executive staff who communicated decisions that were made and instructions that were never given. Lax or nonexistent management of executive staff put the responsibility for the potential disaster clearly on her shoulders. With no oversight, the executive staff simply gave instructions they thought best, perhaps because there was some outside, vested interest to be met, especially related to the sale of the building which had never been approved by the CEO-H.

The CEO-C didn’t manage up very well either. He took no initiative to establish a closer relationship with his new boss so that he would be included in decision-making and influence the outcome. Without developing his credibility with the new CEO-H, he had no role on which the CEO-H could count and had not demonstrated his value to her and the holding company, so he was essentially run over in the sale process by the executive staff. His early agreement made him unimportant.

The holding company bought the corporation, everyone stayed in their positions, and the CEOs managed their own organizations. But really, neither managed anything very well. With no ongoing communications between the two CEOs, there was no precedent, context, or trust for raising sensitive issues, and because instructions had often been communicated by the senior staff, there was no reason or process to question the instructions about the sale.

It’s hard to image not wanting to make an appointment with the CEO when you have just discovered that your company is being sold and you had no say in the decision. Had CEO-C managed up more effectively, a better relationship would have allowed him to go directly to CEO-H and ask about this sale. He would have been more comfortable talking directly to her about selling the company and could have asked about selling the building, too. The bad decisions could have been spotted earlier, but the relationship wasn’t strong enough to allow this kind of conversation. Should CEO-H tried harder to establish a better relationship? Should COE-C? Sure, but neither did, and this was the result.

How can we manage up effectively?

1. Be clear that managing up means managing a relationship, not necessarily a person or task or process. You can’t control the actions of the manager, but you can control aspects of the relationship that foster trust and good communications.

2. Stop being afraid of managing up and getting the manager mad at you. Demonstrating respect for the manager’s position and institutional authority, something you would want for yourself, is the first step in not generating hostility or resentment.

3. At the beginning of a new relationship, establish a pattern of regular communications to check-in, bring someone up-to-date, ask a few questions. The purpose is to establish a relationship based on trust so that difficult questions can be asked when they need to be.

4. A comfortable relationship will make your opinion and insight valuable to your manager, and thus, welcomed when it is offered and requested when it is not.

5. Ask the new manager what works best for that person: formally scheduled meetings? phone calls? emails? Identifying someone’s preferred communications format will support the dialogue, and being accommodating will make for smoother communications.

6. Demonstrate support for the manager by being honest and thoughtful. When there are problems, raise the issue and offer some insight or help in solving it. Managers need people they can depend on even to get bad news. And if the decision goes against your recommendations, don’t sulk or complain. Your opinion was considered; now get on board with the decision. In working toward the established goal, you may be able to influence the process since you are still in good standing with the manager.

7. Don’t take advantage of trust, and don’t brag about the relationship. That behavior will generate resentment among people with whom you have to work.

8. Remain respectful of the position and title no matter what you think of the person, and use the best communications and conflict resolution skills you have to explore difficult issues or disagreements when they occur, and they will. This might be hard, but it’s good practice.

9. Recognize when your own staff members are trying to manage up, and see how you can respond to their efforts successfully. Apply your knowledge about managing up to understanding how you can better manage down.

And the CEO-D?

She led a regional division of the corporation and really had no input into the decisions or control over the outcome, so the strategy was to fulfill all requests for information, do the best job possible, try to stay in touch to get as much information as possible, and roll with the punches. Because this was the second time the division was going through a sales process, having been sold once before, CEO-D now had valuable experience she could provide to the people doing the audits and examining the business. She was more assertive in her communications and reservations than she had been the first time and more confident in providing the information. In addition, the CEO-D had tried many times to manage up and was pretty much ignored by CEO-C, so the best course of action was simply to do the best possible job. Since this experience, the two corporate CEOs are talking much more frequently.

The bottom line? Think of managing up as managing relationships so that you are a recognized partner in that relationship and can contribute appropriately to decision-making. If the manager is not open to including you, then remain respectful, at least to the office and title, and do your best work. In the long run, it will be recognized. And if you’re left out of the decision-making, then at least you can demonstrate that you were not responsible for the mistakes, as these two CEOs were.



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Biography




Maria Simpson, Ph.D. is an executive coach, consultant, trainer and mediator who has worked extensively with the corporate, non-profit and conflict resolution communities to promote incorporating conflict resolution into organizational systems and training people in the skills and approaches of mediation.

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Website: www.mariasimpson.com

Additional articles by Maria Simpson



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