Happy Employees Improve ROI

I finished reading Marissa Mayer and the Fight to Save Yahoo by Nicholas Carlson this weekend. As fascinating as it was reading about all the various CEOs that came and went prior to Marissa, one thing stood out.

Each time a CEO was brought in, it was for certain skills and never for their leadership ability. Yes, bottom line and ROI is important and yes, a CEO needs to know enough to be able to give input on the company's strategy and know what to look for in senior-level hires, but a CEO also needs to be the heart and sole of the company and brand. 

My Women's Leadership and Business Book Club read Simon Sinek's Start with Why: How Great Leaders Inspire Everyone to Take Action a few years' back. Although I no longer remember all the details, I do remember him explaining that the CEO has to be the "why" and the COO or others on his executive team are the "how." In other words, the CEO decides on the company's purpose and mission and has to inspire others with this vision; then the rest of his executive team can figure out how to execute.

But a CEO who has no leadership ability and is just a technical expert will not be able to do this. Worst, a CEO who does not have good relationship building skills and/or does not truly care about their staff will do more damage than good. I've had both the misfortune to work under CEOs who should not be leaders and to work under those that are inspiring ones. I also have seen morale destroyed by knowing senior leadership does not value you as a person: there is no way that anyone can stay engaged long-term when they have no voice and are treated as an easily replaceable asset.

Marissa did spend her first year trying to improve the employee culture at Yahoo and did make a difference, which was refreshing to read about, but apparently she was not a good manager. This eventually lead to a revolving-door executive team and Marissa doing two jobs when she couldn't replace her COO.

There are an ever increasing amount of books and studies on how employee morale and engagement lead to improved productivity and higher profit margins. The next step is to have C-level hires vetted for their leadership skills.

Do you agree? Should a CEO be a generalist who is a great leader or a specialist?


Karina is VP of Operations and HR at 24/7 Teach.

A version of this was originally posted on Business Common Sense blog.

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