Busting the Myth of the Heroic CEO

From Predators to Icons:

Exposing the Myth of the Business Hero

By Michel Villette and Catherine Vuillermot

Cornell University Press; $24.95 It will come as no surprise that a pair of French academics view the notion of heroic CEOs with Continental disdain. "As Europeans, we claim the right to present the history of entrepreneurs from a perspective different from that of the simple success story," write Michel Villette, a sociologist at AgroParisTech, and Catherine Vuillermot, a business historian at L'Université de Franche Comté, in the opening pages of From Predators to Icons: Exposing the Myth of the Business Hero. Europeans, it seems, see through the flim-flam of crass commerce.

Captains of industry get ahead not by means of productive risk-taking and innovation, Villette and Vuillermot argue, but by "predation": ruthless exploitation of market imperfections and rivals. The distinction between "good bosses" and "crooked bosses" is a fiction perpetrated by corporate propagandists. "The businessman spends his time getting around the laws and ordinary conceptions of morality."

Nuanced they ain't. Still, these pretentious, Marx-quoting scholars offer an entertaining reminder of just how passionately some of our friends abroad resent material success. And, as John R. Kimberly, a professor at Wharton, notes in a forward, From Predators to Icons arrives on American shores at "a time when leadership in the world of business in general and finance in particular has been found seriously wanting." Wacky as they often sound, the French professors proffer a few thoughts worth pondering.

POLITICAL CHOICESThe research behind this book consists primarily of a close reading of the biographies and autobiographies of business titans: Jack Welch, Sam Walton, John Scully, Richard Branson, and the like. Many of these accounts are, to put it politely, not very rigorous.

Then again, if you buy a book called Jack: Straight from the Gut, by former GE (GE) chief Jack Welch (with former BusinessWeek Executive Editor John A. Byrne), what do you expect? Villette and Vuillermot profess dismay that the late Sam Walton's Made in America: My Story (written with John Huey, now editor in chief of Time Inc.) (TWX) dwells more on folksy Arkansas rags-to-riches themes rather than the systematic elimination of Wal-Mart's (WMT) rivals and merciless squeezing of its suppliers.

Reading between the lines, one can discern that the French scholars' main complaint is that business creates losers as well as winners—and that the latter don't always play nice in vanquishing the former. Welch imposed discipline by routinely firing underperformers and dumping mediocre divisions. Sam Walton cut prices for consumers but also knocked off countless mom-and-pop stores on Main Street.

Modern commerce is rough, no doubt. If Western Europeans choose to sand the edges with greater regulation and more generous social benefits—as many do—well, that's their political choice to make. Americans, for better and sometimes for worse, make different collective choices.

The authors of From Predators to Icons are as guilty of cartoon stereotyping as the corporate titans and hagiographers they criticize. They are blind to the Olympian energy, occasional philanthropy, and, yes, sheer genius demonstrated by some (not all) corporate giants. Bill Gates comes to mind in the more positive category, whatever you think of the PC vs. Mac contest. CEOs deserve clear-eyed scrutiny: criticism for their foibles and praise for their accomplishments.

What I nevertheless like about this screed is that by dwelling on the dubious genre of corporate tributes, it reminds readers how susceptible business leaders are to monumental self-delusion. That capacity for vain irrationality helps explain Wall Street's subprime-financing fiasco of 2008 (sure, we should underwrite billions in mortgages that borrowers can't possibly pay back!), just as it can be found entwined with the roots of the Enron/WorldCom-era corporate scandals, the late-1990s dot-com mania, the savings-and-loan crisis, and so on, back through the history of capitalist debacles.

Rather than take business legends at their word, Professors Villette and Vuillermot propose interpreting the laudatory biographies according to Sigmund Freud's principles for analyzing neurotic dreams. Distortion and displacement come into play.

Airline tycoon Richard Branson, the authors contend, emphasizes his dedication to the public interest and distaste for high unemployment as a way of displacing his tendency to pay many employees modestly and to shelter corporate earnings in offshore tax havens. Claude Bébéar, the French insurance mogul, distracts himself from a hard-nosed decision to bring in the police to deal with strikers by focusing instead on his visit to the charming home of the Minister of Justice. Before he can request platoons of strikebreakers, the powerful executive must obey the demand of the minister's wife that all guests put on cloth slippers when entering her salon. Such delightful details obscure Bébéar's true nature as "a heartless boss" and an "advocate of repression," according to the authors.

Don't expect Wharton or Harvard to start offering a joint graduate degree in business administration and psychotherapy. No university is likely to take this line of reasoning that seriously—and even if a business school were to try to get on this wavelength, the authors of From Predators to Icons provide little in the way of constructive prescriptions for a curriculum. But their intemperate cry from the ivory tower is an amusing counterbalance to the usual paeans to occupants of the C-suite.

Business Exchange: Read, save, and add content on BW's new Web 2.0 topic networkBuild Them UpA 2004 research paper titled "Believing One's Own Press: The Causes and Consequences of CEO Celebrity," published in the Strategic Management Journal, examines journalists' tendency to give CEOs too much credit for the actions and performance of their companies. This type of coverage, the authors argue, can breed overconfidence among CEOs, clouding their judgment.To read the paper, go to http://bx.businessweek.com/leadership/reference/

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