Ending the cult of the CEO • Hacker News Board

Re: Ending the cult of the CEO

#101

Post by badosu » Tue, Apr 25, 2017, 12:19 AM UTC

mattnewton wrote: post #39

jathu wrote: post #31

This is reminiscent of auteur theory in film, which essentially says that the director is the author of the film. Similar to corporations, making a movie requires a lot of people with different skills/talent. The director overshadows everyone and is the person primarily credited with authoring a film, they even overshadow the writers of the screenplay. One of the leading arguments for auteur theory is that the direct…

It's older than that, how many innovations are credited to Emperors, and victories in battle to Generals? I think it must be the product of some parts of human nature.

"Every page a victory. Who cooked the feast for the victors ?

Every 10 years a great man. Who paid the bill ?

So many reports.

So many questions."

https://www.marxists.org/subject/art/literature/brecht/

Re: Ending the cult of the CEO

#102

Post by xapata » Tue, Apr 25, 2017, 12:23 AM UTC

ChuckMcM wrote: post #85

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…

I think that is a really excellent observation, however it seems to neglect to take into account what the CEO's actual job entails. It doesn't help that the 'CEO' job changes as the company size and mission changes as well. It is an interesting exercise to take a moment and write down what you envision would fill the time of a CEO at the office over the course of a month. What problems would arise? Who would ask for…

While the words "decide" and "choice" have slightly different connotations, it's quite frustrating to hear such a just-so explanation without making clean definitions for the two terms. I guess in the end you back away from that particular distinction in favor of the incontrovertible "roles change".

If you don't mind, could you rephrase your conjecture as a falsifiable hypothesis?

Re: Ending the cult of the CEO

#103

Post by harryh » Tue, Apr 25, 2017, 12:25 AM UTC

kelnos wrote: post #54

shallot_router wrote: post #13

Earlier quoted context omitted.

Obviously it'll depend. But if a founder/CEO turns a 3-person startup into a 500-person multimillion dollar company within a year or 2, and is responsible for a lot of that effort, then they arguably deserve the bulk of the credit. In most cases, probably 10% or less of the credit belongs to the CEO, though.

That's the thing though: as the size of the company, customer count, and revenue numbers increase, the founder/CEO has less and less _directly_ to do with that. If I found a company and directly hire 10 people and act as a day-to-day leader where everyone reports to me, you can say that I had a large impact on everything that happened. Two years later, when we have 300 people, I'm out of the day-to-day hiring decisio…

Here are some decisions that you might be faced with when holding the CEO job at a 300 person company:

- The New York Times has just written an article about how your company mined user data and sold it in a nefarious way. But this sort of sale is critical to your business model. What do you do?

- You hired a VP of Sales 6 months ago who interviewed better than anyone you have ever met and came with glowing recommendations, but he has missed his quota for 2 quarters. Do you fire him or do you give him some more time?

- A competitor has, completely unexpectedly, launched a similar product as yours but is charging customers half the price. Your CTO doesn't know how they could be turning a profit at such a low cost. They're very quickly eating into your market share. How do you respond?

Obviously these situations would be far more nuanced than these 2 sentence descriptions and obviously you would get all sorts of opinions from employees & advisors but ultimately making these sorts of calls is the CEOs job. Making these decisions well is not easy and it can have a huge impact on the company.

Re: Ending the cult of the CEO

#104

Post by ChuckMcM » Tue, Apr 25, 2017, 12:31 AM UTC

xapata wrote: post #102

ChuckMcM wrote: post #85

Earlier quoted context omitted.

I think that is a really excellent observation, however it seems to neglect to take into account what the CEO's actual job entails. It doesn't help that the 'CEO' job changes as the company size and mission changes as well. It is an interesting exercise to take a moment and write down what you envision would fill the time of a CEO at the office over the course of a month. What problems would arise? Who would ask for…

While the words "decide" and "choice" have slightly different connotations, it's quite frustrating to hear such a just-so explanation without making clean definitions for the two terms. I guess in the end you back away from that particular distinction in favor of the incontrovertible "roles change". If you don't mind, could you rephrase your conjecture as a falsifiable hypothesis?

How about this, tell me if it works for you or not;

A path is sequence of correlated activities that lead to a particular goal or deliverable.

A choice can increase or decrease the total number of goals or deliverables.

A decision can increase or decrease the success chances of a pre-existing goal or deliverable.

Generally a startup CEO has one deliverable, the product. And all of their actions are decisions on how to de-risk that deliverable at minimum cost.

An enterprise CEO has multiple deliverables, evalutated as 'enterprise value'. Their actions are generally choices to add or remove deliverables to increase enterprise value.

Re: Ending the cult of the CEO

#105

Post by gech » Tue, Apr 25, 2017, 12:33 AM UTC

abtinf wrote: post #60

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 caricature of investors as "the wealthy" is not connected to reality. If you are interested in having a retirement, you have a stake in the game - even if your entire plan is to rely on social security, someone has to make the money that will be taken and given to you. If you have an interest in a high standard of living or low cost of living, efficient investment decisions are vital to you. When you hire someone…

I reject this entire post. Stock prices reflect the day to day movement. At most the consideration is quarterly. New ceos are commonly brought in to cut costs by degrading internal resources for quarterly bumps. Retirement stakeholders have no say in this.

Re: Ending the cult of the CEO

#106

Post by nnfy » Tue, Apr 25, 2017, 12:33 AM UTC

aaroninsf wrote: post #97

ktRolster wrote: post #49

Earlier quoted context omitted.

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.…

So management in general doesn't deserve more than $X? CEOs do much more than simply broker deals, and the rest is explained by basic market principles-good CEOs are scarce, and therefore well compensated.

Re: Ending the cult of the CEO

#107

Post by Joof » Tue, Apr 25, 2017, 12:56 AM UTC

trendia wrote: post #37

knieveltech wrote: post #24

Earlier quoted context omitted.

Translation: why don't many normal people have trust funds, expensive educations, the disposable income and lack of financial responsibilities to be able to work for free for extended periods of time, friends in industry, investor class connections, or some combination of all of the above plus a shitload of luck.

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

It's unusual for them to be entrepreneurs in anything with a high barrier to entry. Instead they have to become entrepreneurs (and take on extra risk) because they can't easily get other jobs.

Re: Ending the cult of the CEO

#108

Post by sorenjan » Tue, Apr 25, 2017, 12:58 AM UTC

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…

I think you're forgetting the most important reason:

- The board members and CEOs are all part of the same club and is looking out for each other.

Re: Ending the cult of the CEO

#109

Post by gech » Tue, Apr 25, 2017, 12:58 AM UTC

jimbeam77 wrote: post #4

hkmurakami wrote: post #3

I really hope that we can end the cult of the entrepreneur as well. It's not some special thing to incorporate and start a company, and it's not inherently superior to any other line of work.

There's nothing special about starting a company for sure, but successfully growing one takes a lot of grit.

It takes grit to get up everyday at 4 a.m. just to drive a truck or work at a warehouse or be a nurse etc etc etc

Re: Ending the cult of the CEO

#110

Post by crdb » Tue, Apr 25, 2017, 1:07 AM UTC

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.

I'll give you Eisner, but Kroc's first franchise was the 9th McDonald's overall and he is the sole reason for its international dominance, so he's not a founder only in the technical definition of founder. Technically, Warren Buffett is not the founder of Berkshire Hathaway, the old textile business.

As for Welch, GE Capital was a good chunk of GE's revenue and profits... right up to 2008 [1] where it might have sunk the company; it is now being sold off by Immelt [2]. So much for the industrial group giving the financial side "stability"...

[1] http://archive.fortune.com/2008/10/09/news/companies/colvin_...

On its business: " though the average citizen probably thinks of GE as a great industrial company, its industry classification in the Fortune 500 is diversified financials. It is by far the largest company in that industry group. The next biggest - and here we begin to glimpse GE's troubles - are Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

The reality is that for years, about half of GE's prodigious profits have come from General Electric Capital."

On 2008: "But now the stock trades for less than half its price 12 months ago. More than $200 billion of value has vaporized."

[2] https://en.wikipedia.org/wiki/GE_Capital#Restructuring_plan

[3] On who built GE Capital: http://archive.fortune.com/magazines/fortune/fortune_archive... [1997]

"At another level, a small crowd of professional GE watchers know that CEO Jack Welch owes a surprising amount of his success to a profit dynamo called GE Capital Services. What only a handful of people understand--given GE Capital's reclusive nature--is how important this secret weapon has become to GE's continued prosperity, and what a model it is for managers trying to grow in any business."