07 May 2004


The political meme-du-jour in the blogosphere is Kevin Drum's ''Bad CEO'' essay.
Bush styles himself a "CEO president," but the world is full to bursting with CEOs who have goals they would dearly love to attain but who lack either the skill or the fortitude to make them happen. They assign tasks to subordinates without making sure the subordinates are capable of doing them --- but then consider the job done anyway because they've "delegated" it. They insist they want a realistic plan, but they're unwilling to do the hard work of creating one --- all those market research reports are just a bunch of ivory tower nonsense anyway. They work hard --- but only on subjects in their comfort zone. If they like dealing with people they can't bring themselves to read all those tedious analyst's reports, and if they like numbers they can't bring themselves to spend time chattering with distributors about their latest prospect.

And most important of all, weak CEOs are unwilling to recognize bad news and perform unpleasant tasks to fix it --- tasks like like confronting poorly performing subordinates or firing people. Good CEOs suck in their guts and do it anyway.

The Decembrist has an excellent follow-up on this subject, which captures --- in spite of his protestations that he knows little about business culture --- the character of weak CEOs I've known and takes Drum's comparison to the Bush administration a step further.
A writer followed the CEO of Avon Products around for several days ... [and] revealed, inadvertently ... that it is perfectly easy to sit at the top of a large organization, make dozens of ''decisions'' a day, and yet never really grapple with the issues the company faced. The Avon CEO's day consisted of meetings at which teams from various parts of the company essentially pitched him for authorization to spend more money or take more time on some project.
Neither the CEO nor the author seemed to show any recognition that ''the company was a dog,'' since the business of selling cosmetics door-to-door didn't have much future. For all the decisions, the CEO was as helpless to change his company as the worst-paid, part-time salesperson.

It was ... a revelation to me that someone could reach the top of an organization and yet be so completely passive and imprisoned within the assumptions of that organization's culture. There's all the bluster of leadership, all the ''I'm the one who has to make the tough calls,'' all obsession with the stock price as if it's an impeccable barometer of success, but underlying it all, just drift, not mastery.

Now as I pointed out a while ago, Teresa Neilsen Hayden actually made this point over a year ago.
I recognize that behavior. Lord help me, I’ve seen it done. It’s one of the tactics you can use if you’re in an executive-level job that’s beyond your abilities, you have to have meetings with underlings who know more than you do, and your only concern is to save face while making sure they’re giving you what you want.

Update: D-Squared Digest offers us more on the theme with his One Minute MBA.
Good ideas do not need lots of lies told about them in order to gain public acceptance
... if stock options really were a fantastic tool which unleashed the creative power in every employee, everyone would want to expense as many of them as possible, the better to boast about how innovative, empowered and fantastic they were. Since the tech companies' point of view appeared to be that if they were ever forced to account honestly for their option grants, they would quickly stop making them, this offered decent prima facie evidence that they weren't, really, all that fantastic ...

Fibbers' forecasts are worthless
... Not only that people who want a project will tend to make innacurate projections about the possible outcomes of that project, but about the futility of attempts to "shade" downward a fundamentally dishonest set of predictions. If you have doubts about the integrity of a forecaster, you can't use their forecasts at all. Not even as a "starting point" ...

The Vital Importance of Audit
... companies which do not audit completed projects in order to see how accurate the original projections were, tend to get exactly the forecasts and projects that they deserve. Companies which have a culture where there are no consequences for making dishonest forecasts, get the projects they deserve. Companies which allocate blank cheques to management teams with a proven record of failure and mendacity, get what they deserve.

I hope I don't have to spell out the implications of this one for Iraq ...