Why choosing a company leader is crucial

Over the weekend, the automotive industry learned of the sad news about Sergio Marchionne being relieved of his concurrent roles as CEO of Fiat Chrysler Automobiles and CEO of Ferrari. This development came after the 66-year-old Italian executive had reportedly fallen into a coma as a result of complications sustained from his recent shoulder surgery.
FCA then moved to announce Mike Manley, who had led its Jeep division, as its new CEO. Ferrari, meanwhile, disclosed that Philip Morris International chairman Louis C. Camilleri was taking over the executive post vacated by Mr. Marchionne.
It’s always interesting to observe how global companies hire or appoint chief executives. As illustrated by the above examples, there are always two ways to go about the process: You either promote an officer already employed by the firm, or you hire an outsider to take the helm of the business. Normally, the ideal scenario would be the former. There’s nothing like having one of your own ascend through the ranks and eventually become the leader when the opportunity comes. It’s great for team morale and operations continuity. Which is why it is important to have a good line of succession, so that there’s always somebody within the group who’s ready to step up should the need arise.
The problem is when there’s no one qualified to take the top post when said post suddenly becomes vacant. Sometimes, even if there are individuals qualified to take the steering wheel, the dire situation the company is mired in may require a drastic shake-up to overhaul the overall corporate culture. So you have organizations hiring outside leaders, as Ford once did when it poached Alan Mulally from Boeing in 2006.
In theory, all businesses need the same set of basic attributes from a leader in order to be successful. Usually, you want a visionary who plans well and executes better. But the car industry, in my humble opinion, is almost unique in that it sells products that have a lot of romance and emotion in them. So you want a leader who has a firm grasp of those intangibles — someone who’s excellent at number-crunching but who also understands car culture. You may hire the most brilliant manager in the world to lead an automotive brand, and that person could still fail if he or she doesn’t have an iota of car appreciation. There’s just something about the car business that isn’t entirely about profit and loss.
In the local auto industry, I have seen countless leaders come and go — some accomplishing much more than the others, some consistently falling flat in spite of stellar records in previous jobs. The car trade is so transparent because success is mostly measured by sales. Either you sell or you don’t. It’s that simple. I’ve witnessed horrible bosses who very clearly have no idea about what they’re doing. They just seem to like the prestige — and presumably the pay — that comes with the position.
But a good leader will shape the personality of the company almost from day one. This person will inspire everyone from the line worker to the sales manager to do better every day, and his or her passion will be so infectious that it will spur the organization forward. A bad leader is exactly that — bad. Bad fit, bad influence, bad decision making.
In my experience, you can tell a well-managed company just by its personnel’s demeanor — the way they carry themselves, the way they talk, the way they dress up, the way they treat other people. Employees with a great leader will always be classy, professional, courteous, fair and honest. Those with an incompetent boss are generally lousy in everything.
And so getting someone to lead a company or a brand is extremely crucial. It will make or break the business. That individual will dictate not only the prevailing culture within the organization, but more importantly the direction the whole team is going to take. If you pick well, you’ll get one who’ll do wonders for your bottom line. If you don’t, you’ll see dwindling fortunes faster than Ferrari can develop and roll out a new supercar.