42 l July 2014
www.psneurope.com
live Power
Phil Ward assesses what it takes to be a CEO in today’s global pro-audio business
WRITING IN the Harvard Business Review around 1971, business correspondent Alonso McDonald reminds us that: “Many CEOs who sincerely see themselves in the role of moral leaders are perceived by others as confi rmed and passionate addicts of power.” This is, in fact, one the earliest uses of the term ‘CEO’ in print and, while the sentiment behind the quotation may be as old as the hills, the sibilant new abbreviation took root after this date and became a fresh, post-baby boom label for ‘boss’. Its initial popularity in the US spread around the world alongside the English language and branches of Starbucks. It has an American swagger, with seemingly limitless alternatives for different types of chief offi cer: among the CTOs, COOs and CFOs are the departmental directors and managers of yore keen to place themselves in the new ethos. There are regional variations, not least legal ones, but the senate-style population
supply
of ‘boards’ to run any business is common. Like democracy itself, it has evolved to prevent too much power residing with one person – or even one board.
HEAD HONCHO Nevertheless, to be chief ‘executive’ offi cer is to make those executive decisions that no one else can, either because there isn’t time or because the committee approach has resulted in stalemate. It seems also an eternal verity that someone, at some point, has to carry the can. According to Holger de Buhr, CEO of the new European operation Vue Audiotechnik Europa, based in Berlin: “If the company makes losses, if the products don’t sell, if customers complain, if the coffee machine doesn’t work, if it’s raining outside… it’s your fault.”
To reach this level of control in modern management demands more trust than fear among colleagues, thankfully, and that’s exactly why all the checks and balances are in place. While the US has a board of directors and an executive committee, the equivalents in the EU are usually called the supervisory board and the executive board
“If the company makes losses, if the products don’t sell, if customers complain, if the coffee machine doesn’t work, if it’s raining outside… it’s your fault”
Holger de Buhr, Vue Audiotechnik Europa
respectively. Their roles are very similar: the ‘executive’ carries out the daily running of the business on a highly practical level, demanding a close understanding of the technicalities of the individual business and headed by the person very likely called the CEO; and the board of directors or supervisory board takes a more hands-off perspective, headed by the chairman, attempting to safeguard the long-term health of the business in the best interests of the shareholders.
Anders Fauerskov, head of TC Group: “Rooting out [defeatism] is essential”
So CEOs, and all the other COs, are the agreed highest- ranking and highest-paid executive offi cers who do not sit on any shareholder board, making them – especially in a hi-tech market – the real engines of the business. Differences occur according the size and shape of the company: a sole proprietor can be a CEO, not least in the simple absence of anybody else; any senior partner in a partnership can be CEO; or anyone at management level in a limited liability company. Just to confuse the issue, the title ‘managing director’ is synonymous with CEO, especially in the UK, but is a CEO-style executive position and does confer any special status on the supervisory board of directors. There was a steady shift towards CEO (or MD) positions being taken up by business graduates, as opposed to those with vocational qualifi cations in technology or law, throughout the 20th century, according to a study by MIT. In other words, running a business for its own sake has become a profession, rather than a by-product of any technical expertise or success.
In our industry, as we’ll see, the balance between these two types of CEO is at the very core of the debate about management styles today.
STATUS QUOTE
One thing that singles out pro audio is its indifference to protocol. It seems the more altruistic an industry, the less concerned it is about the exact defi nition of terms – as though, in a very rewarding sense, there are far better things to be getting on with. Take the view of Mathias von Heydekampf, now the proprietor of myMix manufacturer Movek in Minnesota, US.
“I have been CEO, PDG, president and general manager, and you could torture me and I wouldn’t know the difference,” he says. “I know legally it makes a difference, especially in France where as a PDG you are personally liable as well. I always work with people, and if I need a title to get things going I feel I have failed.” Others have adopted the title CEO more as a convenient badge than as a serious defi nition of offi cial capacity.
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