The story of John Doe is a model example of a success story. The oldest of three siblings, John was raised by a single mother in extreme poverty. He had to drop-out of school to work odd jobs just so that he could put food on the table. Regardless, he persevered through the hardships and eventually landed a blue-collar job as a factory worker making telephones.
John bode his time, learning from his seniors and gaining experience within the industry. Eventually, producing telephones became second nature to him. Soon, the promotions started rolling in as John proved himself a capable worker and leader.
This was not the end of John Doe’s story, however. As time went on, a new generation of young adults were beginning to appear. They enjoyed trendy, contemporary things that John’s employers were not providing. Profits began to fall as the company, unable to adapt, failed to meet sales targets.
John saw the writing on the wall. He knew that new designs needed to be made to cater to the new generation of customers; changes his employers, stuck in their old ways, were unwilling to make. Eventually, John would grow fed-up with the direction of the company and struck out on his own.
Putting his entrepreneurial skills to the test, he formed his own telephone company. He hired likeminded employees who were keen to experiment with innovative new ideas. He adopted the latest trends in telecommunications, being among the first few companies to develop and sell mobile phones. John continued to adapt his company to the rapidly changing world, the internet, smartphones, 3G, 4G; every new and innovative idea that drove the world forward, John would steer his company towards it.
This progressive mindset led John’s company to become one of the largest and most popular brands in telecommunications and handphone production. His company now consisted of thousands worldwide with hundreds of manufacturing facilities and full management boards throughout multiple region.
John had finally achieved the wealth and success he strived for during his youth. He was finally happy.
Then one day, one of his managing directors passed away.
It was so sudden, and no one saw it coming. One day he was there, the next day he wasn’t. This hit John particularly hard as this managing director had been onboard with John since nearly the beginning of his company.
John had a sudden realisation of his own mortality. He was old now; much of his life spent toiling away in a factory or at the work desk. He was so busy trying to fill his pockets that he never really thought about what came after.
The strong CEO of a multi-billion-dollar company slowly began to retreat inwards. Slowly, John disappeared from public view. Where one he would personally direct the company’s operations, he now left to his managers. Where once he would aggressively expand company assets, he now let growth stall and slow down.
John began taking more time-off to spend with is family. Often, he would contemplate what he had done and whether it would be worth it. He had become completely aware of his fleeting existence and wondered how he would be remembered. Would he be praised by the masses for providing them with such luxuries? Or would he be scorned by the hundreds of employees he had let go over the years to cut costs?
After weeks of silent contemplation, John decided that he needed to get back to work. However, his employees noticed a change in his behaviour. John was quieter now, less imposing. He was more willing to let his managers loose to express their ideas instead of controlling the company’s direction with an iron fist.
John began directing more resources to CSR and other benefits for employees. Performance evaluations and increment reviews came more frequently. Improvements were seen in community engagement, charity, environmental opportunities, human rights, workforce diversity, employee relations and product safety and quality.
John knew that in the grand scheme of things, these changes were miniscule. Despite that, he hoped that it at least meant something to someone, somewhere.
This story is based on research conducted by INSEAD.
The study in question has found that the death of a company director triggers CEOs’ awareness of their own mortality, prompting them to re-prioritise their life with wide-reaching implications for the firm. This inevitably results in negative consequences for the company. Surprisingly, the study shows that it also causes some positive and generative behaviours as well.
INSEAD Associate Professor of Strategy Guoli Chen, released a paper titled ‘That Could Have Been Me: Director Deaths, CEO Mortality Salience and Corporate Pro-social Behaviour’ (co-authored with Crossland, C., and Huang, S.), Chen provides evidence of a link between CEO mortality salience, triggered by the death of a board director at the same firm, and a subsequent increase in the firm’s corporate social responsibility.
Along with the increase in CSR activities, deaths of company directors seem to negatively impact a CEO’s public directorships and the firm’s asset growth. However, there was a noticeable increase to a CEO’s non-profit directorships as well. Drawing from studies in the field of thanatology – death, dying, and bereavement – the research provides evidence of the way death acts as a cognitive trigger for CEO’s resulting in both withdrawal and generative behaviours.
Death is by no means a laughing matter. It is often traumatic and can change someone who sees it happen first hand for the better or for the worst. However, INSEAD’s study shows that CEO’s experiencing this period of grief can also be associated with a range of positive, self-transcendent cognitive responses which lead to generative behaviour. INSEAD’s study provides an interesting point of view on the behaviour of CEOs when there are intrinsic factors involved to help them realise there is more to life than just profit.