40 Percent Of Time For The Owner!

The CEOs of giant companies have to manage not just the companies but also the owners. There are even those professionals at the highest levels who devote 40 percent of their working hours to managing their owners. So, is it more difficult to manage the business or the boss? Many old and new CEOs say that it is the owner. Indeed, Akın Öngör, who used to be a professional executive at the Doğuş Group, says: “Managing the owner is many times more difficult than managing the business. In terms of the difficulties, the two cannot even be compared.”

Hazım Ellialtı spent 20 years working at Unilever as a high level executive before being transferred to become Eti CEO in 2006. As part of the professionalization process in the company, the founder Firuz Kanatlı became honorary president and the son Firuzhan Kanatlı was appointed board chairman. The decision for the family to withdraw from he active management of the company and hand it over to professionals was reflected in the company’s results for 2007. Eti increased its market share to 36 percent and reduced the gap between its own market share and that of its bitter rival Ülker to 7-8 percentage points. It looked as though, under its new CEO, the group was racing from success to success. But everybody was shocked when, two months ago, the news came of a resignation at Eti. The company announced that it had decided to terminate its agreement with Hazım Ellialtı.

So, why did Ellialtı’s adventure at Eti, during which time he had introduced revolutionary changes, only last two years?

There were claims that there were problems between Ellialtı and the Kanatlı family. Indeed, it was said that Ellialtı, who had complete authority, conducted a number of operations without the approval of the owners. The last round of these clashes brought the bosses and the CEO to a parting of the ways.

The resignation was discussed widely in the business community. To such an extent that it led to a re-examination of the relationship between the owner and the CEO and people asking whether it was more difficult to manage the company or the owners.

The Ceo Should Get On Well With The Owner
Management, HR experts and professional executives give different answers to the question: “Is it more difficult to manage the boss or the business?” Experts tend more towards the side of the bosses and stress the importance of the owners. They add that it is the CEO’s responsibility to manage and get on well with the boss.

Korn Ferry International Managing Partner Şerif Kaynar says: “The owner is the person who has risked his own capital. For this reason, the responsibility for learning how to get on with the boss lies not with the owner but with the executive.” Alanyalı & Alanyalı Managing Partner Mehtap Alanyalı also takes the side of the bosses and says that managing the owners’ expectations is one of the duties of high level executives.

Ceos Think Differently
But CEOs think differently. Many former and current professional executives believe that managing the owner is an important part of the executive’s job. Indeed, some CEOs admit that they devote nearly half of their time to managing the owner. For example, one CEO who worked with one of the best-known owners in Turkey, noted that he spent 40 percent of his time managing the owner. He detailed what he did in this 40 percent of his time as follows: “I would finish my work at 14.30 every day. The boss would come at 15.00. From that moment on, I would tell everybody, ‘I am not here’. Because in order for the system which had been established to function healthily, it was necessary for me to keep the owner under control.”

This CEO, who did not wish to be named, added that he had at least three power struggles with his old boss. He outlined his personal formula to ensure that a balanced relationship between CEO and boss as follows: “We had a power struggle but there was a breaking point. You need to make the boss feel like the boss. You give him a pawn but you take the rook and the king. This is the key to f managing the owner.”

The Problem Of Always Waiting For Approval
İbrahim Betil worked for many years as a high level executive in the banking sector and is one of the lucky people who did not have many confrontations with his bosses. He says that, when he was working as a professional executive, he almost never met with the boss or family members. He continues as follows: “For this reason, the problem of managing the owner never arose. I was very lucky that I worked as a professional executive with Ayhan Şahenk and Mehmet Emin Karamehmet.”

According to Betil, for professional executives in companies which are determined to professionalize their management, the extent of the freedom to work independently of the owner is directly related to the degree to which the executives are prepared to take responsibility for their decisions. But, if a professional hesitates when making decisions, avoids responsibility and seeks the approval of the owner for everything that he does, then both he and his boss will lose out as a result.

 “A Ceo Who Spends A Lot Of Time With The Owner Should Be Fired”

The Five Rules Of Effective Leadership
 There are five basic rules executives should follow In order to be an effective leader. They are: managing the company as a strategist, executing the strategy, developing human resources by training the next generation, making sure that the workforce will do what needs to be done quickly, and -- most importantly -- having a good character and the ability to learn fast.

A Good Ceo Agrees With The Boss
 For this reason, a CEO who has a disagreement with the board or the owner, should see where he has not applied effective leadership and take measures accordingly. A good CEO should reach an agreement at the beginning of the year with the board of directors or the owner about targets and make sure that everything is very clear.

When Do Things Go Wrong?
 I have never forgotten the definition of bureaucracy that I heard from a very well known leader: “Bureaucracy is turning your back to the customer and your face to the boss.” If a CEO is spending a lot of time managing the owner then I can say that something is going wrong. Because when CEOs spend most of their time with the owners, they cannot create value in terms of fulfilling expectations. I think a CEO who spends a lot of time with the owner should be fired.

Nilüfer Gözütok
ngozutok@capital.com.tr