The Scheherazade Syndrome

While driving home the other night I was listening to Nikolai Rimsy-Korsakov’s symphonic suite “Scheherazade” on my car radio. As I drove on, I recalled the story of Scherherazade from my reading of Sir Richard Francis Burton’s “The Book of the Thousand Nights and a Night” and it occurred to me that her approach to dealing with king Shahryar was the same as the approach many CEOs use when dealing with those who hold the power to either reward or dismiss them.

To refresh your memory, the story goes that every day Shahryar the king would marry a new virgin and every day he would send yesterday's wife to be beheaded. This was done in anger, having found out that his first wife was unfaithful to him. He had killed one thousand such women by the time he was introduced to Scheherazade, the vizier’s daughter.

Against her father's wishes, Scheherazade volunteered to spend one night with the King. Once in the King's chambers, Scheherazade asked if she might bid one last farewell to her beloved sister, Dinazade, who had secretly been prepared to ask Scheherazade to tell a story during the long night. The King lay awake and listened with awe as Scheherazade told her first story. The night passed by, and Scheherazade stopped in the middle of the story. The King asked her to finish, but Scheherazade said there was not time, as dawn was breaking. As a result, the King spared her life for one day to finish the story the next night. The next night, Scheherazade finished the story and then began a second, even more exciting tale which she again stopped halfway through at dawn. The King again spared her life for one day to finish the second story. And so, the King kept Scheherazade alive, one night at a time, for a thousand nights as he eagerly anticipated her finishing of the previous night's story.

Does this sound familiar to anyone? A CEO gets hired by investors to run an organization they purchased with the intention of selling it at a substantial profit in the not-too-distant future. To turn that future profit, the investors establish certain metrics to serve as targets the CEO must meet in order for the company’s apparent worth to increase to the necessary levels. Sometimes those targets “violate the laws of physics” and sometimes they do not. At predetermined intervals, usually each month or each quarter, the CEO must report progress against those targets. If targets are met or exceeded, the CEO remains employed. If they are not, the CEO’s continued employment is jeopardized. Too many intervals with targets that are not met and our CEO is let go and a new one hired.

The CEO likes his or her prestigious, high-paying job and so does everything possible to make sure those periodic targets are met – even when meeting them jeopardizes the company’s ability to meet its targets in the future. After all, if you don’t hit this period’s numbers you might not be around to worry about the next period’s numbers. The CEO’s primary objective is his or her survival, not the long-term health and prosperity of the organization.

A long-time CFO/friend of mine recently told me of a conversation he had with the CEO of a mid-size to large (over 1,000 employees in a dozen facilities) auto supplier owned by a private equity firm. My CFO/friend was very familiar with both the CEO’s company and his CFO. The company’s accounting organization focused entirely on financial reporting – there was no effort to develop sound economic information on which management could base its decisions – and even the financial systems were archaic and inconsistent from location to location. Since both the CEO and CFO arrived at the company, there had been no effort to upgrade the accounting system or develop accurate and relevant information on which the company’s managers could base their decisions.

When my CFO/friend asked, “Why do you put up with a CFO that presides over such an inept accounting function and provides you and your managers with little or no information of value?” the CEO replied, “Oh, he does provide with me value. Every quarter he puts together a six-inch thick book that I take to my meeting with the private equity firm’s board that enables me to either answer or dance around their questions and helps me keep my job for another quarter.”

I don’t know about you, but I find such an attitude depressing. Unfortunately, I’ve also found it quite widespread among C-level executives who don’t plan on being around for more than three to five years and who care little about the long-term prospects of their employees or the communities in which their facilities are located. It’s all about telling a tale that will induce the king into keeping them alive for one more day – The Scheherazade Syndrome. During my thirty-seven years as a consultant, I can think of a half dozen CEOs (not necessarily clients) who’ve managed to play Scheherazade at two to four different companies – never leaving the company in better shape than when they became CEO (and sometimes leaving as it went bankrupt), but finding another “king” to hire them and listen to their stories for three or four years before sending them to the executioner. How sad.