A Tale of Two CEOs

Recently, there have been two very good examples of the perceived importance of CEOs: Steve Jobs' dealing of the iPhone 4's antenna issues (not to mention the way he has turned around Apple since he re-joined them over 10 years ago) and Tony Hayward's imminent departure from BP are two examples that seem to suggest that a CEOs actions can make or break a company. While the example of Jobs is clearly that of a CEO having a positive influence and Hayward's is an example of the negative influence of a CEO, they both suggest that a single person, at the top of a company, can have a disproportionate impact. The question that then arises is - is this true or not? Is Apple's success due to Steve Jobs? Is BP's failure Hayward's fault?

The truth is that it is impossible to say how much of a company's situation (positive or negative) can be attributed to factors associated with its CEO. Is a company's success attributable to its CEO or merely a result of circumstances? While, for obvious reasons, it should be impossible to conclude how much of a company's situation is directly the result of a CEO's actions, it seems that everybody has concluded that the role of a CEO is of paramount importance - the public, which has been demanding Hayward's head ever since the spill begun; the boards that decide to pay CEOs vast amounts of money; and shareholders who often make investment decisions based on management teams.

The importance of a good CEO and management team is undeniable but what is often ignored is that successes (or failures) that are sometimes attributed to the company's leader may simply be a result of context rather than personality. Will BP be better able to clean up the Gulf and its image now that Hayworth is no longer there? Are people willing to buy the iPhone 4 in spite of its call-reception problems solely because Jobs says that it is not that big of an issue? I, for one, am not so sure...