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Published: October 1, 1996

 
 

Why C.E.O.'s Succeed (and Why They Fail): Hunters and Gatherers in the Corporate Life

There is no hierarchical organization; it is a camp. He cannot delegate; he must work by consensus.

Conclusion

The literature and techniques of anthropology and cultural evolution can be used to understand business organizations at different scales. We have explained three familiar failure modes of chief executive officers, derived from studies of primitive societies and their leadership. We have shown that these failure modes can be avoided if the C.E.O. and the company's employees understand and conform to the deep structure of their organization.

We have also shown that the board of directors of a modern corporation is a more primitive and intrinsically different structure from the organization it serves, and that C.E.O.'s must use fundamentally different techniques to work with their boards and with their companies.

Many failures of companies and their C.E.O.'s can be avoided by supplementing graduate business training, which now deals largely with the structure and management of hierarchies, with training in consensual organizations such as boards, "skunk works" and small companies. The goal is for the new C.E.O. to have the training to understand the differences between the organization he is entering and the one he is leaving.

In the absence of knowledge, people do the things that have worked for them in the past, and when they fail to work, simply do the same things more intensively, like a tourist in a foreign country who just shouts louder if he is not understood.

But new C.E.O.'s have staked everything on their new jobs and they desperately want to succeed. When they arrive in an unfamiliar organization, they are receptive to guidance they believe may keep them from failing. A man or woman who is entering a small company for the first time, and whose work has largely been in hierarchies, would be wise to find an insightful friend who has successfully run a small company, or a person with extensive board experience, to act as an adviser.

Venture capitalists, executive recruiters and board members of young companies who have a stake in the success of the people they fund or recruit can reduce their risks considerably by discussing consensual organizations with their candidates.

One of the authors of this article has made a recent habit of exploring the central issues that have been discussed here with company founders (who are frequently pro-consensus and anti-hierarchy) and with experienced candidates for top management jobs (who are dramatically the reverse). Candidates from one form of organization who are unwilling to admit the validity of the other will fail. When they are receptive to these new ideas, their chances, and that of their companies, improve.

In two cases, after such a discussion, a founder suggested that he take the role of a function manager in the new company rather than be its C.E.O., and that he and the investors go out together to recruit an experienced hierarchical C.E.O. to run the new enterprise when it grew to an appropriate size.

In both cases, the company was unusually successful. Perhaps more important, the founder happily remained with the company in a productive and rewarding role.

© 1989, 1990, 1996 Edward F. Tuck and Timothy Earle

(1) L.J. Eaves, H.J. Eysenck and N.G. Martin, "Genes, Culture and Personality: An Empirical Approach" (Academic Press, 1989).

(2) Allen W. Johnson and Timothy Earle, "The Evolution of Human Societies" (Stanford University Press, 1987). This work includes observations on the structure and leadership of primitive polities; insights from this book and the following monograph are used throughout the remainder of this article without specific reference.

(3) Timothy Earle, "Chiefdoms in Archaeological and Ethnohistorical Perspective," from the "Annual Review of Anthropology" (Annual Reviews Inc., 1987).

 
 
 
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