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Ending the cult of the CEO

managementtoday.co.uk

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Re: Ending the cult of the CEO

#91

Post by rdgthree »

idoh wrote: post #48
elihu wrote: post #36

The way I look at it, there are two kinds of CEOs. There are the ones that founded the company and have led the company according to their own personal vision. Many of them hold stock worth billions and they're generally looked up to as "captains of industry". The other kind is the CEO who is hired by the board of directors. They're usually very well paid and given a lot of stock, but aren't wealthy the way, say, Bil…

Sometimes non-founder CEOs are worth it and can completely turn around the fortunes of a company. For example, Eisner for Disney, Kroc for McDonald's, Welch for GE, Jobs (the second time around), and either Ballmer or Nadela (depending on which one you pick). So I don't think the founder / non-founder distinction holds up.

Ballmer ruined the company, not turned it around. He took something amazing and tanked it. Nadella is the example here.

Re: Ending the cult of the CEO

#92

Post by majewsky »

mschuster91 wrote: post #71
trendia wrote: post #37

Earlier quoted context omitted.

If those things are required, then why do so many immigrants become entrepreneurs?

Spoken from a German POV, it's quite simple: racism. When you're an immigrant and no one wants to hire you because you have a non-German family name (illegal in theory, hard to enforce in practice!), you have four options: be stuck in low-level menial work for the rest of your life, rely on food stamps/government assistance ("Hartz IV" in Germany), turn into crime life or start a small company (costs ~ 50€ or such fo…

> Starting a company is not really popular here

Since I'm also German, I would like offer a different reason. I frequently observe people on HN talking about their "side projects", where they build a simple app or website in their spare time, and people are willing to pay a dollar a month or so, which (when summed over maybe 1000 users) makes for a decent secondary income.

When I consider such a model for myself (just as exploratory thought because I don't have a nice side project idea ATM) it quickly devolves into a nightmare where I spend all my free time filling out tax report forms so that the Finanzamt can collect taxes on my maybe 100 euros per month.

Maybe that's a misconception and it's much easier to operate a side business as a one-man show, but that's the mental image in my head, and that's also the main reason why I would be quite reluctant to even consider just a side project.

Re: Ending the cult of the CEO

#93

Post by JoeCortopassi »

majewsky wrote: post #90
JoeCortopassi wrote: post #72

Reasons why CEO's make millions and I don't: - Business Network: If I had a billion dollars, I would never have been able to acquire Instagram. I wouldn't even be able to get a seat at the table. Zuckerberg closed it in record time while talking to a company that wanted to be on it's own - Market Knowledge: I thought the iPad was the stupidest device ever, Steve Jobs didn't. I now have 4 at my house along with two of…

> - Job Market: I'm a programmer. There are jobs everywhere for me. If the CEO of Uber loses his job (fingers crossed), it might be a looong time before he finds a new one and even then it's not likely to be remotely similar to what he does now. I mean shoot everyone loves Gabe Newell, but if he lost his job, what are his options? Not as many as me. I would assume that people in such positions (i.e. people who are th…

They may have _ideas_ of what can be next, but the job market is orders of magnitude smaller at that level

As far as having the wealth to get their next venture off the ground, that's part of the negotiation. They know if they leave the company, it will take X days to find a new position or Y amount of money to start that idea they have. I do the same thing when taking a job (i.e. Can I save for a rainy day?)

Re: Ending the cult of the CEO

#94

Post by chickenbane »

rdgthree wrote: post #91
idoh wrote: post #48

Earlier quoted context omitted.

Sometimes non-founder CEOs are worth it and can completely turn around the fortunes of a company. For example, Eisner for Disney, Kroc for McDonald's, Welch for GE, Jobs (the second time around), and either Ballmer or Nadela (depending on which one you pick). So I don't think the founder / non-founder distinction holds up.

Ballmer ruined the company, not turned it around. He took something amazing and tanked it. Nadella is the example here.

This is often stated, but when you actually look at his accomplishments (from Wikipedia):

> Under Ballmer's tenure as CEO, Microsoft's annual revenue surged from $25 billion to $70 billion, while its net income increased 215 percent to $23 billion, and its gross profit of 75 cents on every dollar in sales is double that of Google or IBM.

...

> Ballmer also built half-a-dozen new businesses such as the data centers division and the Xbox entertainment and devices division ($8.9 billion) (which has prevented the Sony PlayStation and other gaming consoles from undermining Windows), and oversaw the acquisition of Skype. Ballmer also constructed the company's $20 billion Enterprise Business, consisting of new products and services such as Exchange, Windows Server, SQL Server, SharePoint, System Center, and Dynamics CRM, each of which initially faced an uphill battle for acceptance but have emerged as leading or dominant in each category.

It doesn't exactly sound like tanking.

Re: Ending the cult of the CEO

#95

Post by wand3r »

I found it hard not to disagree with this article. I am not sure I agree with the premise but this argument wasn't persuasive. Of course a stock drops when the CEO abruptly dies. Of course 100percent of people responsible for the well being of others (employees and shareholders) and countless decisions is stressed.

A counter example to jobs (cliche pic on every article like this) is Ive. The cult of personality is an obvious way to humanize a company. It can be good or bad. Kalanick bad right now; Musk good right now.

Being a good CEO is more important than simply branding yourself.

IDK, article fell flat for me I see both sides and it's subjective in my book

Re: Ending the cult of the CEO

#96

Post by idoh »

rdgthree wrote: post #91
idoh wrote: post #48

Earlier quoted context omitted.

Sometimes non-founder CEOs are worth it and can completely turn around the fortunes of a company. For example, Eisner for Disney, Kroc for McDonald's, Welch for GE, Jobs (the second time around), and either Ballmer or Nadela (depending on which one you pick). So I don't think the founder / non-founder distinction holds up.

Ballmer ruined the company, not turned it around. He took something amazing and tanked it. Nadella is the example here.

That's kinda the point I was getting at - some people would pick Ballmer as being a great CEO, others would pick Nadella.

Re: Ending the cult of the CEO

#97

Post by aaroninsf »

ktRolster wrote: post #49
elihu wrote: post #36

The way I look at it, there are two kinds of CEOs. There are the ones that founded the company and have led the company according to their own personal vision. Many of them hold stock worth billions and they're generally looked up to as "captains of industry". The other kind is the CEO who is hired by the board of directors. They're usually very well paid and given a lot of stock, but aren't wealthy the way, say, Bil…

The way I look at it, a good CEO can save a company millions (or even billions if it's a large company like Sony) by negotiating better contracts. That is a skill some CEOs have. Now, if you're going to hire a CEO with that skill, do you think he's not going to also negotiate a good contract for himself? He has that skill.

There is an unvoiced logic here that I question.

The contention is that a CEO saves $x million, and thereby 'earns' some [preposterous] fraction thereof, as a finders' fee.

This is a similar logic to a broker taking a percentage of a large market transaction.

That part I disagree with and think many upset about CEO compensation (or market speculators/industry windfalls) is that this is earning in any meaningful way.

In particular, the presumption that there is some intrinsic relationship between the compensation earned and the numbers transacted seems baseless.

The CEO and market trader alike do not provide the value; they are simply in a desk where the numbers are large.

The reason a CEO can 'save millions or make billions' is merely because they have been seated where their quotidian decisions (however talented) have disproportionate leverage and consequence.

That is not a result of ability or skill, except in the unconvincing sense that they had the skill to weasel (my word) their way into that desk, nominally on personal merit, in fact, usually by virtue of connection and political merit.

That sort of 'earning' does not pass the smell test for most of us who have not lucked into those seats, and never shall.

Re: Ending the cult of the CEO

#98

Post by ryandrake »

__jal wrote: post #22
jimbeam77 wrote: post #7

Earlier quoted context omitted.

So why don't many normal people successfully grow a business?

Because the risk calculation looks different when one has a bank account that can support one's family while working for free for a x% chance of a payout.

Bingo. Tons of money can't buy you the home run, but it can buy you a stronger bat, a slower pitch, and as many swings as you need to hit that home run.

Re: Ending the cult of the CEO

#99

Post by dilemma »

》The result is that a startling 100% of CEOs report that they suffer from stress and, according to research by Apollo Life, one in four say they struggle with insomnia. Many multinationals have launched expensive well-being programmes in response, but these just wallpaper over the core problem: CEOs unnecessarily carry the full weight of company performance on their shoulders.

It is the job and responsibility of the CEO to delegate so that decisions can be made elsewhere.

Re: Ending the cult of the CEO

#100

Post by JumpCrisscross »

jgamman wrote: post #86
elihu wrote: post #36

The way I look at it, there are two kinds of CEOs. There are the ones that founded the company and have led the company according to their own personal vision. Many of them hold stock worth billions and they're generally looked up to as "captains of industry". The other kind is the CEO who is hired by the board of directors. They're usually very well paid and given a lot of stock, but aren't wealthy the way, say, Bil…

Selectorate theory (the rules for rulers) would imply the second type of CEO (hired) is there to distribute treasure to the major stakeholders and not primarily to grow/invest in the business aka financial strip mining.

You're ignoring that the treasure is dynamic. If I can have 50% of $1 today or 20% of $10 tomorrow, a leader who can produce the second outcome is preferable to one who'll simply distribute à la the first.
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