It is an all-too-common occurrence nowadays. A high-profile organization fails spectacularly on some count, or shows some public moments of weakness. Soon enough, there is a clamor for the leaders’ resignation and before you know it, the leader has offered to step down already, “on moral grounds”.
The most recent case in point was that of Vishal Sikka, who just could not take the “continuous drumbeat of distractions and negativity” anymore, quit the CEO position and eventually, the company too.
Something similar happened with Suresh Prabhu, when the back-to-back train derailments led to widespread calls for the Railway Minister’s resignation. And in spite of 59 per cent of India believing that the Railways improved under Suresh Prabhu, the man felt deeply anguished and offered to resign.
On the one hand of the spectrum, we have concepts like decentralization of power and employee empowerment, which hinge on taking the concentration of power and authority away from the top, and giving the ownership to the ones who are actually implementing the decisions. It is also a show a trust in your team members, and offers several advantages for organizations.
In fact, Suresh Prabhu himself said in an interview with People Matters last year that the “decentralization of power instills a sense of responsibility in the officers and the employees and speeds up decision making”.
On the other hand, though we have another school of thought which essentially states: everything said and done, the CEO is ultimately responsible for a company’s performance. Since it is the CEO who is the captain of the ship, it’s only fair to hold her/him chiefly accountable for which course the ship charts, and where it eventually ends up. And this is what we see to be happening, for so many major companies, one after the other.
Each of the two perspectives has its own merits, and many years of experiential learning have gone into arriving at those insights. However, it is quite difficult to juxtapose the two, since they have contrasting implications for organizations.
Which brings us to the question: Is it purely the responsibility of the head honcho if something major goes wrong in the company; or should the consequences be shared between the key stakeholders, as they are ‘all in this together’? Do share your thoughts on this multi-million-dollar question.