Do you really need a CEO?
Do you really need a CEO?
Maybe not, but building an alternative takes work.
In a recent Harvard Business Review article, venture capitalist Nitin Nohria argues that CEOs are, ideally, not the ultimate decision-maker. Rather, the CEO’s job is to create the context in which other people in the company are empowered to make decisions.
The article made me recall a question I’ve kicked around for a while: Do companies really need CEOs?
On a practical level, having a CEO is one answer to a lot of questions. Where does the buck stop? Who, ultimately, has to stand in front of the board and explain what went wrong? When a team can’t get consensus, who decides? These are practical questions, one answer to which is “The CEO.”
On a reputational level, the absence of the absence of a CEO might just be seem confusing or risky to people outside a company, including to venture capital investors like Nohira.
The Case Against CEOs
But having a CEO is just one way to answer those and other questions. Making decisions in self-consciously democratic and egalitarian ways is as old as humans themselves (I’m halfway through Graeber and Wengrow’s majestic book The Dawn of Everything, where they make this point in 800 pages). Even when setting up the constitution, America’s founders considered one proposal with multiple executives.
In the absence of a CEO, then, it is incumbent on an organization to develop the answers to those important questions. One way to do that might be through explicit power-sharing agreements, in the form of a company constitution. As with a governmental constitution, the point of the exercise is to anticipate the things that could go wrong, so that we can proactively design against them. Otherwise an organization is likely to arrive at a moment in which decisions are made by whomever in the organization is willing to pick up the power lying in the streets.
To that point, the American constitution, building from principles the founders gathered as it was from both European and Native American thought, might offer some pointers here. Organizations could separate sovereignty, for example, as the constitution does between the federal government and the states. They could separate powers, as the constitution does among three branches, putting each person in charge of a different set of decisions in the company.
If this sounds unorthodox, that’s probably because it is! At least in corporate America. For examples of how to establish more democratic organizations, we will have to look elsewhere—social movements, religious groups, nonprofits, governments, German-style codetermination. But as one former CEO put it in a recent blog,
“since we became employee owned, I have come to appreciate that dispersed power and consultation lead to better, safer, less impulsive decisions, and they don’t have to come at the price of bravery and responsiveness.” - Guy Singh-Watson
In the end, the only two limits on experimenting with organizational democracy are human nature (which I believe less brutish than many would argue) and our own organizational imaginations.