Do CEOs have to live by the rules they set?

Dear Bob …

Last year, we undertook a significant study of content management systems in preparation for selecting and acquiring one to support the business. It was labor-intensive, structured, and contentious, but we were able to reach a decision and move forward.

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The decision was the same as the one I would have made following about two hours of additional investigation, as it’s a subject I was already quite familiar with.

I thought I understood the necessity of going through the process anyway, until last week, when the CEO made a decision of much greater scope, impact, and risk — a three-way joint venture — on the strength of a round of golf with a couple of friends who run the two other companies.

In my opinion, which is of no interest to the CEO, this is a big, hairy mess in the making. It’s going to take a bunch of custom integration work on our part, for which we don’t have the budget or staff, and it’s aimed at an unproven market segment.

My question: How is it that CEOs get to make rules for the rest of us, but get to ignore the rules themselves?

– Thoroughly frustrated

Dear Frustrated …

The answer to your question is, because they can.

The answer to the first question you didn’t ask but are actually asking is, of course they should follow the same rules, or else they should change the rules, then follow them. Mandated due diligence practices exist for a reason, which is to make sure companies make sound, evidence-based decisions. They have to be rules because humans have a few nasty tendencies when it comes to such matters. That is, we:

• Fall in love with the deal
• Trust our guts even when the evidence says otherwise
• Chase the next “shiny ball,” preferring the glamorous to the mundane
• Prefer to avoid the hard work of learning and thinking

CEOs, being human, are prone to the exact same failings.

The answer to the other question you didn’t ask but are actually asking (what can you do about it?) is, not very much. Assuming the deal has been announced, the CEO’s name is now on it, which means backing away would be, at best, embarrassing. And it’s a rare CEO who is willing to live with embarrassment.

Something you might try is the “great idea, but” gambit: “This is a great idea. I really like it, and I want to make sure IT doesn’t turn into a bottleneck. My staff and I did some whiteboard scribbling to figure out what it will take to make it work, and I wanted to walk you through it so we can make the proper adjustments to the budget, current master project plan, or both.”

Translation: “You signed the company up for something that’s going to need a lot of money and hard work.”

Next say, “Also, this is going to take a fair amount of work on the part of IT in both of the other companies involved in the venture. If you want us to coordinate them, it would probably be a good idea for you to work that out with the other two partners so that nobody is caught by surprise. Also, we’ll need to get the three information security teams talking right away so we can exchange data without bringing each other inside our firewalls.”

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Translation: “I’m giving you a way out, if, in the cold light of the morning after you come to your senses. You can announce that we and our partners couldn’t agree on some key aspects of how the arrangement would work.”

Or if you think the deal will turn out to be embarrassing but not life threatening, you could decide to let things roll along until they derail. Sometimes, the best way to avoid future calamities is to allow present-day difficulties to see the light of day. People don’t learn from avoided problems as deeply and vividly as they learn from ones that actually happen.

– Bob