Lie Of Executive Compensation

compelled to re-read Jim Collins best seller Good to Great. Let me state up front that I am an executive and believe strongly that my compensation should be commensurate with my performance. However, Collins masterful body of research flies in the face of the assertions being made by the Banking Industry, and much of Corporate America, that high compensation levels will attract strong leadership. Instead, the data shows that large bonuses do nothing to attract the right people nor improve the possibility of promoting a good company to a great company. If you've never read this book or it's been awhile, here's what the evidence shows:

There is no systematic pattern linking specific forms of executive compensation to the proceChina triaxial test apparatusss of going from good to great. It is impossible to elicit the right behavior from the wrong people, regardless of what/how they are paid. Instead, the crucial element is to have the right leadership in place.

The ambition of leadership in great companies is first and foremost for the institution, not themselves. The argument is often made that it takes significant compensation to attract the right leadership but the data says otherwise. Leaders of great companies, says Collins, "channel their ego needs away from themselves and into the larger goal of building a great company."

Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with taking a company from good to great. In 10 of the 11 good-to-great companies studied by Collins, CEO's were promoted from within the organization, while the coChina magnetic stirrermparison companies (similar companies that did not make the leap to great) tried outside CEO's six times more often.

Collins goes on to show that leaders of great companies are modest, identify and cultivate successors that will continue to benefit the organization, and have unwavering resolve to do what must be done to ensure organizational success. Time and time again the evidence shows that leaders of great companies are focused on the success of the organization rather than their own personal success. YeChina Le. Chatelier mould t the Banking Industry, Corporate America, Wall Street, and even our political leaders espouse that companies attract great leaders by appealing to elements of self-gratification. The public should cry out for data to support this assertion. Stock holders should demand to see evidence supporting fame-based recruitment and high compensation packages. And politicians, as voices for the American People, should demand the same of our financial institutions. Why Mr. Collins hasn't been summoned to Washington D.C. to help address this issue is beyond me.

I am a certified professional coach, management and sales trainer, using the science of personality traits and communication, strengths and learning styles to help organizations develop elite teams, and help individuals