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Many companies aren’t prepared to replace underperforming CEOs

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Re: Many companies aren’t prepared to replace underperforming CEOs

#31

Post by lazide »

fdgsdfogijq wrote: post #3

Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let alone company, is extremely difficult. Individual contributors are much easier to judge, and thus live lives of sub-ordinance. Their inputs and outputs can be easily mapped. The trick of working, and thus living a nice life, is to rise to a level of plausible…

Bwahaha, I take it you’ve never actually been near anyone who has done that, let alone done it yourself?

That’s total fantasy.

If someone is really really good, it can look like they’re not doing much for anyone who doesn’t know what to look for, for the same reason a ships captain who is looking like they aren’t doing anything is usually a really really good one.

The folks who directly interact with them often are well aware of this, but in a large org that may only be a couple percent of the organization.

Because they set the right culture to get things done smoothly, they’ve hired and trained the right leaders to make sure the right decisions get made (and oversee them appropriately), they chart a course that produces the right outcomes without a lot of drama, they delegate what they need to, but not things they should not, have problems dealt with proactively before they cause major issues, etc.

If you see a ships captain running around looking busy all the time, or even worse, dealing with major issues all the time, that’s a terrible captain.

Same with a business unit leader.

Paying attention to what needs to be paid attention to for all that to work correctly, and integrating that into the correct action is extremely difficult.

Especially under stress, and with constant distractions, which that level in Tech has a huge amount of.

It is very difficult to find someone who can do it, and they command a premium because of it. Hands on experience with the tech and people over a long period of time is a huge help, but just being around awhile is no guarantee of success. The filter is very harsh.

Lack of someone who does it effectively, or if they lose their ability to be effective, gets really obvious really quick, and has major consequences for the organization.

Re: Many companies aren’t prepared to replace underperforming CEOs

#32

Post by rogerkirkness »

bluGill wrote: post #23
rogerkirkness wrote: post #5

Earlier quoted context omitted.

CEO is the easiest to measure, because you just pass through how the company as a whole is performing against it's goals.

CEOs need to be lookout ten years out. They have little control over this quarters numbers, or even this years. All they can do is changes that won't affect the bottom line for a while.

This is true in a phase three company that is in efficiency and future cashflow harvesting mode, but in practice you end up doing shorter term things too involving a crisis of people or execution.

Re: Many companies aren’t prepared to replace underperforming CEOs

#33

Post by 3a2d29 »

thesuitonym wrote: post #29
Apocryphon wrote: post #4

Random idea- has any corporation operated with something akin to term limits?

Seems like it would be a terrible idea. CEOs are already incredibly short sighted, neglecting long-term disasters for short-term gains. Sometimes it seems as though CEOs aren't able to see beyond the next quarterly earnings report. Having a limit would incentivize running the company into the ground to get the highest quarterly profit possible. What do they care? Someone else will be CEO next year.

But surely if CEOs had term limits then the good ones would be jumping from one company to another, so if they think too short term then no board would hire them.

Boards would hire the CEOs that set the next one up for success.

Kinda like how term limits for the us president doesn’t usually result in that type of behavior since it would screw over their party.

Re: Many companies aren’t prepared to replace underperforming CEOs

#34

Post by yuppiepuppie »

thesuitonym wrote: post #29
Apocryphon wrote: post #4

Random idea- has any corporation operated with something akin to term limits?

Seems like it would be a terrible idea. CEOs are already incredibly short sighted, neglecting long-term disasters for short-term gains. Sometimes it seems as though CEOs aren't able to see beyond the next quarterly earnings report. Having a limit would incentivize running the company into the ground to get the highest quarterly profit possible. What do they care? Someone else will be CEO next year.

Maybe tying their severance, retirement package or stock options to the performance to the companies long term growth would help alleviate that problem.

Re: Many companies aren’t prepared to replace underperforming CEOs

#35

Post by Apocryphon »

thesuitonym wrote: post #29
Apocryphon wrote: post #4

Random idea- has any corporation operated with something akin to term limits?

Seems like it would be a terrible idea. CEOs are already incredibly short sighted, neglecting long-term disasters for short-term gains. Sometimes it seems as though CEOs aren't able to see beyond the next quarterly earnings report. Having a limit would incentivize running the company into the ground to get the highest quarterly profit possible. What do they care? Someone else will be CEO next year.

The terms could be 5 years long, and re-electable.

Re: Many companies aren’t prepared to replace underperforming CEOs

#36

Post by 3a2d29 »

granshaw wrote: post #25
rogerkirkness wrote: post #7

Earlier quoted context omitted.

Huawei does this, I think every 18 months they change CEO among the leadership team.

Super interesting. Def think there’s lots of room for experimentation in corporate governance and corporation structure

Obviously not corporate, but I believe Rome had 1 year term limits for its 2 consuls.

Re: Many companies aren’t prepared to replace underperforming CEOs

#37

Post by Keegs »

hn_throwaway_99 wrote: post #10
fdgsdfogijq wrote: post #3

Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let alone company, is extremely difficult. Individual contributors are much easier to judge, and thus live lives of sub-ordinance. Their inputs and outputs can be easily mapped. The trick of working, and thus living a nice life, is to rise to a level of plausible…

Wut? At higher level in an organization, there is a much greater chance that you will be fired for things that you really have little control over. Now, at the highest levels, the compensation usually matches this level of uncertainty, sometimes with golden parachutes as well, so if you are fired you're still sitting pretty. But, for me, I wouldn't define "a nice life" with having to deal with that much stress as hav…

I think layoffs matter too. ICs may be fired more for performance reasons, but they disproportionately face uncertainty created by rounds of layoffs, uncertainty that isn’t compensated.

Re: Many companies aren’t prepared to replace underperforming CEOs

#38

Post by venantius »

Apocryphon wrote: post #4

Random idea- has any corporation operated with something akin to term limits?

It’s actually quite common at certain types of organizations (typically foreign-owned) to appoint a local as CEO on a specific term and then to revisit when that’s up.

Re: Many companies aren’t prepared to replace underperforming CEOs

#39

Post by candiddevmike »

mkl95 wrote: post #18

One of the C-level guys at my current company should have been replaced a while ago. He ruins everything he touches but he's also one of the founders. There are virtually no processes for anything which makes him untouchable. Whenever he fucks up, some PM or low level manager is fired due to their "low performance". Is there anything non C-levels can do about it? Honestly I don't think so, all you can do is avoid the…

I really think everyone under any manager/director/VP (directly or indirectly via skip levels) should be able to call a "vote of no confidence" and get them replaced with a majority vote. It's the only way to combat clueless leaders and raise issues like this.

Re: Many companies aren’t prepared to replace underperforming CEOs

#40

Post by SkyPuncher »

rogerkirkness wrote: post #5
fdgsdfogijq wrote: post #3

Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let alone company, is extremely difficult. Individual contributors are much easier to judge, and thus live lives of sub-ordinance. Their inputs and outputs can be easily mapped. The trick of working, and thus living a nice life, is to rise to a level of plausible…

CEO is the easiest to measure, because you just pass through how the company as a whole is performing against it's goals.

How are goals set? How do goals account for macro economics? How do goals account for market constraints/problems? How do goals account for measuring against a theoretical "alternative" CEO that could have done better?

It's much easier to be a bad CEO in a good market than it is to be a good CEO in a bad market.

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