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NOTE: Apparently the passing of Steve Jobs caused the news accumulators to pull this article - in which everyone's favorite Apple CEO featured prominently - from the archives. I didn't notice the January 2010 publication date until I went looking for the full text of the original. Oops.
The HBR has a several articles describing a couple ways to measure a CEO's effectiveness. I didn't go beyond the pay wall so I've not read the entire article, but apparently their methodology was to measure the CEOs' impact on share price and capitalization over their tenure - 4 to 16 years - instead of the financial industry's usual definition of long-term - three years. So, if we choose to measure CEO success in terms of total shareholder return and change in market capitalization over their tenure then these are apparently the top dogs.
What would happen if these powerful leaders were measured on their companies' impact on all of humanity? How about the health effects of the products sold (one of the top 50 leads a tobacco company)? The impact on communities adjacent to the properties being mined or drilled (several are energy companies)? Whether or not the company operates under the protection of an oligarchic regime? How many lobbied for protectionist exceptions to free markets and fair trade? What role did any of them play in our recent financial meltdowns and market crashes? How many off-shored employment or their tax liabilities? Do their products alleviate human suffering or contribute to it? What of employee satisfaction, wages, benefits, and working conditions? What is the rate of work-related illnesses, injuries and fatalities at these firms? What is the role of women and minorities in the company? What changes in the educational, economic, and social status of their employees have they contributed to? What of their litigation history? What is the environmental impact of production and use of the product or service? What is their carbon footprint? Do they offer a closed loop waste stream? I suspect this list might go on and on.
There are plenty of ways to measure excellence. Total shareholder return and change in market capitalization are but two. So long as we measure success the same old way we should expect to receive the same old results. Perhaps this effort is a step in the direction of recognizing true long term success, or at least restoring the meaning of the phrase "long term," but at first blush it seems to reinforce the legitimacy of the "What have you done for me this quarter?" hamster wheel publicly traded companies have no choice but to tread.
Minor Update: I did find a complete copy of the article and it did not differ in tone or substance from the free preview.
