Blogs & Comment

It's 1 o'clock. Do you know where your CEO is?

A group of researchers look at where leaders should spend their time for best company results.

If your company’s CEO is attending too many private lunches and golf games, he could be wasting company resources. But he also could be making valuable business connections. Determining which scenario is more likely was the goal of a group of professors at the London School of Economics and Political Science, the European University Institute and the Harvard business school.

The group’s recent study had the assistants of nearly 100 CEOs of large companies in Italy keep a journal of how the chief executives spent their time over the course of the day. The data charted which company departments the CEO made a priority, and how much time he or she spent with other people inside and outside of the company. The researchers were particularly interested in the relationship between time spent inside and outside of head office and value created for the firm—is a CEO who spends his time building and fostering relationships with outsiders serving the firm by increasing visibility, or is he just helping network his own career?

Some other highlights of the study:
• CEOs spend 85% of their time at work with other people
• CEOs spend, on average, 42% of their time with people from their own company
• CEOs spend 25% of their time with a mix of company insiders and outsiders
• About 16% of CEOs’ time is spent, on average, with outsiders alone
• More than 10% of CEOs spend more than 10 hours a week alone with company outsiders

Once they plotted the data, the researchers noticed some interesting things. Execs that put in more hours spent far more of their time with the people in their own company, and devoted less time to connecting with those outside their firm—especially in a one-on-one setting. The study also highlighted the tendency of CEOs of companies with strong governance to spend time with insiders rather than outsiders.

But perhaps most notable, the results showed that a company’s performance is also related to the time spent by its CEO with his or her own people. “Time spent with insiders is positively correlated with several measures of firm performance, while time spent with only outsiders is not,” the report states. After some number crunching, the researchers concluded that a 1% increase in hours spent with other company employees equaled a 1.22% increase in productivity.

In the end, the study suggests  the CEO who spends more time nurturing teams inside his or her own organization is more beneficial to the company than the one who spends time hobnobbing with too many outsiders.