The major topic of discussion in the essay is based on the ways by which the momentum of growth of the modern organizations can be measured. The traditional metrics that are used for the measurement of effectiveness of the leadership of CEOs in the modern business based environment are based on the financial performance. On the other hand, the metrics that are used for the measurement of effectiveness of CEOs are based on three major factors which include, economic, social and governance based metrics (Colbert, Barrick & Bradley, 2014).
The environment in which the modern organizations operate are turbulent in nature and the companies can operate in an effective manner with the help of strategies and leadership style of the CEOs as well. The financial performance is thereby not enough for the proper management of the organizations. Different metrics that are thereby used for the measurement of effective performance of the organizations include the social performance, economic performance and the governance (Daher, Guillaume & Crawshaw, 2018).
The measurement of the success of CEOs is possible not only with the help of financial metrics, economic, social and governance metrics are also important. The essay is based on the analysis of the ways by which modern organizations are affected by the measurement of different metrics. The effectiveness of the CEOs and their leadership qualities can also be measured with the help of different metrics other than the financial performance of modern companies.
Ways of measuring the performance of CEOs in the turbulent business environment
The feedback based on the performance of CEOs is quite difficult to obtain in the organization which he or she leads. The board thereby needs to play an important role in overseeing the performance of CEOs in an effective manner. The feedback based mechanism which is thereby developed by the company in this case needs to be clear and concise in nature. The strength of the board in this case thereby plays a major role in measuring organizational success (Hattie, 2015).
As discussed by Hussain & Hassan, (2016), the work process of CEOs is thereby analysed in an effective manner by the board. The financial success of the company is also an important part of the measurement process of performance that is depicted by the CEOs. The financial success of the company is thereby considered to be important metrics for the effective analysis of the performance of CEO and success in business environment as well. The success of the leaders and CEO is totally based on the ways by which the organizations are able to perform in the industry.
An example of a CEO whose success can be effectively measured with the help of financial success of the company is Jeff Bezos, the founder and CEO of Amazon. The leadership style which has been followed by Jeff Bezos is transformational in nature. This style of leadership is inspirational and the leaders are able to work by coordinating with the employees. The vision of the leader is shared with the employees so that the organizational goals can be achieved. The organization has been able to gain huge amounts of success in the industry with the help of the effective leadership style which has been depicted by Jeff Bezos. The leadership style which has been shown by Bezos is transformational in nature. The transformational leadership style is mainly based on the inspirational leaders who are able to achieve their goals and objectives in an effective manner with the proper collaboration between the employees (Hussain & Hassan, 2016).
The leaders in this case are able to share their vision with the employees in order to reach the goals within a shorter period of time. Jeff Bezos was also able to share his vision with the employees which was based on the customer first based policy. The leader has thereby been able to include the employees within the vision in an effective manner in order to achieve the organizational objectives. The growth of Amazon is thereby totally based on the ways by which the company has been able to develop a loyal base of customers with the help of the efficient leadership qualities of the CEO. The success levels of the CEO and the company has thereby been measured with the proper analysis of the financial growth in the online ecommerce based industry (M. Taylor, Cornelius & Colvin, 2014).
The culture of Amazon is a major issue that has been able to affect the social performance of the company in a huge manner. The work culture of the company is thereby an important factor which is able to affect the social position of Amazon that causes issues for the employees. The CEO has not been able to provide effective attention to the well-being of employees in Amazon (Amazon.com., 2018). Bezos has provided more importance to the innovation and the performance of the company than the needs of employees. The employees have been placed under immense pressure by Bezos so that they are able to provide optimum levels of satisfaction to the customers (MacKie, 2014).
The CEO has provided highest levels of importance to the customers of the company their levels of satisfaction as well. This has further created immense amounts of pressure on the employees for delivering their best levels of performance. The standards which have been set by the CEO is considered to be unreasonably high by the employees. The colleagues also send secret feedbacks to the management which is capable of career sabotage in a huge way. The health based issues which were faced by the employees are also not considered in a serious manner by the management of Amazon (Mahembe & Engelbrecht, 2014).
The feedbacks and interviews provided by the employees have provided hints that the culture that has been created in Amazon is not fruitful for the work process of the employees. The social responsibilities towards the employees are not fulfilled in an effective way by the CEO of the company. The employees are considered effective stakeholders of the company who are able to affect the levels of profitability in a huge manner. The satisfaction of employees is thereby an important responsibility of the CEO which needs to be fulfilled in order to become a successful CEO. Amazon is popular in the United States and the company has become has the fourth largest in the country (McCleskey, 2014).
The company is thereby under the continuous scrutiny of the lawmakers and the customers based on the ways by which it is able to fulfil their needs. The fulfilment of its responsibilities in an effective way is also considered to be an important factor which is able to affect the reputation of the company in the industry. The ways by which the company had started making tie-ups in the US after the election of Trump was not appreciated by the customers. This had caused a rage against the company and it started losing huge numbers of customers as well (Prochazka, Vaculik & Smutny, 2015).
The loyal customers had also started voting against the organization and many steps had been taken to boycott the products as well. The trend of #BoycottAmazon had started and this had been able to increase the rage of customers in an effective manner. The company was further accused of carrying price fixing related activities. These issues had thereby been able to affect the reputation of Amazon in a huge manner. This also affected the measurement of the performance that has been depicted by Bezos.
According to Seibert et al., (2017), the success based levels of the organizations thereby need to be measured with the help of proper analysis of the overall performance of the organization which is based on different factors that include, the financial metrics, the social performance and the governance based style that is undertaken by the organizations. The approach which has been taken by Amazon has not been highly effective for the company and its operations in the environment. The needs of the employees should also be taken into consideration by the company in order to develop an effective position in the industry. The most important part of the operations is thereby based on the ways by which the organizations are thereby able to satisfy the different stakeholders in an effective manner.
According to me, the different metrics based on the social and economic metrics need to be used for the measurement of performance and success of organizations. The example of Amazon has been able to depict that in spite of huge success of the company, it has faced major issues in the culture which has been developed in Amazon.
The modern organizations face huge number of issues if they focus only on the financial metrics for the measurement of success. The understanding of mental models is able to play a major role in the ways by which different organizations are able to understand the employees. The coordination of the employees and the management is an important part of the relationships which can be developed by the CEO with employees. The governance of the organization is also affected in a huge manner by the relationships within the organizations. The management or the CEO can thereby develop effective relationships with the stakeholders in order to maintain the long term profitability of the company (Shamir & Howell, 2018).
As discussed by Stiehl et al., (2015), the process of systems thinking is based on the ways by which the management is able to develop relationships with the employees. This is thereby considered to be an important process which is based on the influence which employees and management on one another. The integration of systems thinking and innovation within the modern organizations is an important factor which is able to affect the operations. Systems thinking is thereby based on the proper development of relationship within the employees and management in an effective manner. The major benefits that are provided by the systems thinking based approach is based on four different factors which include, understanding the entire picture, solving the real issues, identifying the patterns and the rapid process of innovation as well.
A major example which can be considered for providing an analysis of the ways by which the use of financial metrics is not always useful for the modern organizations. Tim Cook the CEO of Apple can be considered to be as a leader who has always considered the financial metrics to be an important factor in order to measure the effectiveness of the CEOs. The leadership style which has been implemented by Tim Cook is known as the democratic style. The CEO has applied some qualities and attributes of the autocratic style of leadership style which was followed by the ex-CEO Steve Jobs. The employees need to take part in the organizational processes under the shared leadership style that has been followed by Cook. The leadership based process of Tim Cook is thereby totally based on the financial benefits of the company rather than the employee well-being (Van der Voet, 2014).
The employees are not provided with effective levels of importance by the CEO of the company. The culture of Apple is thereby affected in a huge manner by the pressure that is provided by the leader so that they are able to achieve the desired goals. The company has also faced some major issues due to the ways by which employees are treated in the stores
(Apple.com, 2018). The relationships which have thereby been developed between the management and the employees are thereby able to play a major role in the organizational operations (Wang, Waldman & Zhang, 2014).
The CEO has provided huge amounts of importance to the ways by which employees are treated within the organization. The growth of Apple is thereby totally measured on the financial profits rather than the social and economic responsibilities which are to be fulfilled by the company. The organization has faced major levels of issues due to the different problems which have been faced by the company within the industry (Waseem et al., 2016).
The issues that have been faced by Apple in the operations are quite similar with those which have been faced by Amazon. The huge success of the company was based on services that are offered by the employees. However, the lack of importance which is required to be provided to the employees is missing. This has further led to the lack of social responsibilities of the company.
According to Willems, (2016), the major challenges that have been faced by the company are based on the balance that has been developed between the financial metrics and the economic, social and governance based metrics. The balance which is developed by the companies is thereby able to maintain the position in the industry. The major levels of pressure are thereby faced by the organizations with respect to the cutting of costs and further meeting the demands of all the stakeholders. The successful leaders are able to maintain the effective operations with the help of relationship that is developed between the leaders and the followers. The stakeholder based relationships can be maintained by the leaders or the CEOs with the help of effective power.
As argued by Zhang et al., (2015), the stakeholders of the company need to be managed with the effective influence that leaders have on them. The leaders can also face major levels of challenges based on the proper fulfilment of the needs and demands of the followers. The leaders need to aim at increasing the contribution based levels of the followers in order to improve the profitability and the revenues. Employee empowerment can also be considered to be an important part of the effective balance that can be developed by the leaders or CEOs of the company.
According to, Shamir & Howell, (2018), the leaders are thereby able to develop effective relationships with the followers with the help of effective employee empowerment based activities. The conflict negotiation based capabilities that have been gained by the leaders is also considered to be an important factor which is able to affect the operations of different companies. The CEOs or the leaders can develop effective position in the industry and increase the profitability based levels with the help of conflict management. The proper management of conflict is thereby able to improve the culture of the organization.
For example, Larry Page is an example of a CEO or a leader who has been able to make a mark in the industry with the help of his effective and ethical leadership based style. The success of Google has been based on the effective and supportive style of leadership which has been depicted by the CEO. The ethical leadership style has been based on the importance which is provided by the leader to the employees and culture which has been developed within the organization. The ethical or inspirational leadership style is based on attributes that are provided by the transformational style. The levels of support that is provided to the team by Page is thereby able to play a major role in the effectiveness of Google (Google.com, 2018). Larry Page has thereby been able to maintain effective relationships with the employees and has also maintained a balance between the financial metrics and the ESG performance based metrics.
Larry Page has given importance to the ways by which employees and workplace culture can be maintained. This had led to the effective working culture which has been developed by the company. The success of Google is thereby based on the measurement of social and governance based metrics along with the financial success.
Conclusion
The discussion can thereby be concluded by stating that the leaders of an organization are able to affect the entire process and reputation which is developed in the industry. The CEOs are thereby responsible for the ways by which the company can create an effective position in the industry. The most important part of the operations of the different organizations which have been considered as examples is based on the relationship which is developed between the leaders and the employees. The effective levels of relationships are thereby able to play an important role in the organizational processes. The performance of the CEOs are however measured with the help of different aspects along with the financial metrics. The three major aspects that are considered for the measurement of performance of the employees thereby include, the financial metrics, the social metrics and the governance process. The company needs to be successful and effective in all these aspects in order to develop its long term based operations. The effectiveness of the company in different aspects is thereby able to play a major role in the developing the reputation of the CEO.
References
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