Scientists Studied the Daily Lives of 1,000 CEOs. Here's What the Best Ones Did

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

I adore it when I read fine articles that tell me all great CEOs get up at 5 a.m., eat two boiled eggs, swim butterfly better than breast stroke and sleep only three hours a night.

You’d think, wouldn’t you, that at least some CEOs do things their own way because, somewhere deep inside, they’re still individuals.

Still, scientists need to find common traits upon which they can get grants and sell books. 

(Yes, of course I’m kidding. They need to make speeches too.)

I was moved, therefore, by a group of scientists from deeply venerable institutions such as Harvard Business School and one of my alma maters, the London School of Economics, opining on what makes a great CEO.

Writing in the Harvard Business Review, they explained that they examined the day-to-day lives of 1,000 CEOs, in order to understand whether boiled eggs really did have that much influence.

Yes, I made up that last part. 

I’m not, however, going to make up the conclusions from this study.

“Our evidence suggests that hands-on managerial CEOs are, on average, less effective than leaders who stay more high-level,” say the scientists.

I pause for your shock, your horror and your aghast grunts of glee.

It seems that the CEOs who didn’t meddle in every detail of every decision were, on the whole, a touch more successful that those who floated in the ether, said important things at the occasional company meeting and appeared a lot on CNBC.

I fear that there is no one formula. Any more than there is no one formula for losing in the MLB playoffs. Why, look at the Washington Nationals. They find different ways every time.

I worry, though, about this research.

You see, it “used machine learning to determine which differences in CEO behavior are most important.”

Ah. Oh. 

The algorithm was, apparently, agnostic. How odd. I generally find that algorithms tend to worship the God that created them.

Still, in the end the machines concluded that, in essence, some CEOs were down-in-the-dirt meddlers, while others enjoyed “relatively more interactions with C-suite executives, personal and virtual communications and planning, and meetings with a wide variety of internal functions and external stakeholders.”

The parts of the researchers’ conclusions I enjoyed most were their description of what CEOs did all day.

Many an employee would really like to know.

Well, CEOs spend 25 percent of their days alone. On the driving range, you might imagine. Or reading self-help books.

But here’s the part that made me reach hurriedly for a very fine glass of Cabernet Sauvignon: 10 percent of their days are spent on “personal matters.”

That’s not “personnel matters.” I can only guess it’s getting their hair coiffed and buying the odd yacht or two.

The researchers seem to lean the way of leaders — rather than managers — as the more successful CEOs. They do concede, however, that some businesses need a CEO who pokes their nose into everything. 

My own conclusion, then, is that the most successful CEOs are the ones who takes a look at a company and then realize the sort of CEO this company actually needs.

And then deliver on that insight.

I should add that, in my experience, some of the most successful CEOs have been the ones who knew how to negotiate themselves a vast payoff, just before the excreta sailed inexorably toward the fan.

But it all depends how you measure success. Naturally, these researchers tended to look at painful concepts such as productivity and profitability.

Leader CEOs seem to have engendered greater rises in productivity. 

Does that mean that people preferred to work for the leader type? I suspect so. They weren’t butting into their business so often, I imagine.

Tech

Alibaba-backed Best Inc raises $450 million in IPO after slashing terms

HONG KONG (Reuters) – Chinese logistics firm Best Inc priced its U.S. initial public offering at the bottom of expectations, raising $ 450 million after it revised terms of the deal to cope with tepid investor demand.

Up to $ 932 million had originally been expected for the listing, underscoring how some fast-growing companies may have to temper their expected valuations to lure investors burned by recent underperforming IPOs.

The offering was the biggest by a Chinese firm in the United States since rival express delivery firm ZTO Express Inc (ZTO.N) raised $ 1.4 billion in October. ZTO’s stock has traded below its IPO price since debuting and is down 22 percent from the listing price.

Best, which is backed by Alibaba Group (BABA.N), priced 45 million American depository shares (ADS) at $ 10 each, the bottom of a $ 10 to $ 11 indicative range, Thomson Reuters publication IFR said on Wednesday, citing people familiar with the deal.

Best declined to comment on the IPO pricing when contacted by Reuters.

The company had initially expected a price range of $ 13 to $ 15 per ADS and an IPO consisting of 53.56 million new shares and 8.54 million existing shares.

The revised IPO one day before its market debut suggested weak investor enthusiasm for the original terms. The slump in ZTO’s share price also prompted some investors to balk at Best’s initial pricing, a person close to the deal told Reuters.

Best, founded by former Google executive Johnny Chou, faces stiff competition from Chinese logistics firms such as S.F. Holding (002352.SZ), YTO Express (600233.SS) and STO Express (002468.SZ), all of which recently went public in China, the world’s biggest logistics market.

Best was banking on China’s booming logistics market to justify its valuation, but concerns over competition, along with rising fuel and labour costs prompted some investors to balk at Best’s initial pricing.

Best reported a net loss of 623.8 million yuan ($ 94.9 million) for the six months ended June 30. Total revenue rose 133.5 percent to 8.10 billion yuan, driven by its freight and express delivery business.

Chinese e-commerce company Alibaba, led by Jack Ma, holds a 23.4 percent stake in Best.

Reporting by Fiona Lau of IFR; Additional reporting by Aparajita Saxena in Bengaluru and Elzio Barreto in Hong Kong; Editing by Sai Sachin Ravikumar and Stephen Coates

Our Standards:The Thomson Reuters Trust Principles.

Tech

Alibaba-backed Best Inc cuts expected price range for U.S. IPO

(Reuters) – Alibaba Group-backed (BABA.N) Chinese logistics firm Best Inc on Tuesday slashed the expected price range of its U.S. initial public offering, one day before its market debut, suggesting tepid investor enthusiasm.

Best expects its offering of 45 million American depository shares (ADS) to be priced at $ 10 to $ 11 per ADS, it said in a filing with U.S. securities regulators. (bit.ly/2heEOFe)

The company had initially expected a price range of $ 13 to $ 15 per ADS and an IPO consisting of 53.56 million new shares and 8.54 million existing shares.

Best, founded by former Google executive Johnny Chou, faces stiff competition from fellow Chinese logistics firms such as S.F. Holding (002352.SZ), YTO Express (600233.SS) and STO Express (002468.SZ), all of which recently went public in China, the world’s biggest logistics market.

Best was banking on China’s booming logistics market to justify its valuation, but concerns over competition, along with rising fuel and labor costs prompted some investors to balk at Best’s initial pricing, Reuters reported earlier on Tuesday.

Best reported a net loss of 623.8 million yuan ($ 94.9 million) for the six months ended June 30. Total revenue rose 133.5 percent to 8.10 billion yuan, driven by its freight and express delivery business.

Chinese e-commerce company Alibaba, led by Jack Ma, holds a 23.4 percent stake in Best.

Reporting By Aparajita Saxena in Bengaluru; Editing by Sai Sachin Ravikumar

Our Standards:The Thomson Reuters Trust Principles.

Tech

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