Random Acts of Management
I keep reading stories of CEOs of large companies who make hundreds of millions of dollars in stock options. There is some debate as to whether this is appropriate. One argument is that these CEOs are visionares, uniquely qualified to create spectacular stockholder value. Another possibility is that CEOs are just showing up and shuffling things around until something lucky happens. I'm leaning toward the "showing up and shuffling" theory.
I'm not saying CEOs are dumb. Put yourself in their shoes. When you're a CEO, the only information you have is what your subordinates give you. And they're all unscrupulous sycophants. The last thing you'd ever hear is the truth. So there you are, a powerful CEO astride some mammoth enterprise, armed with no useful information whatsoever. You know you have to do something but there's no way to know what. Your only rational strategy is to do random things until something lucky happens, then take credit.
The alternative - acting nonrandomly - is a sure loser. Let's say, for example, you're a CEO and you fire everyone whose last name starts with the letter M. That's a clear pattern, and not a good one. Everyone would think you were a nut. You see, when you don't have a good strategy, any activity that looks like a pattern just makes you look bad.
Conversely, if you act randomly, reorganizing for no particular reason, promoting idiots, merging unrelated businesses, spinning off a few divisions - that looks like leadership. It's leadership for the simple reason that your employees never would have made those changes on their own. Later when something lucky happens, you can take credit. If nothing lucky happens, call it a transition period.
I wonder what CEOs say to their spouses in private. Do the CEOs begin to believe that their management decisions are connected to the results? I bet they do. It probably sounds like this:
CEO: "Honey, I fired my VP of marketing because I didn't like his shirt, and our stock went up a point!"
Spouse: "Didn't the Fed lower interest rates today?"
CEO: "Try to stay on the topic."
posted by Dilbert
I'm not saying CEOs are dumb. Put yourself in their shoes. When you're a CEO, the only information you have is what your subordinates give you. And they're all unscrupulous sycophants. The last thing you'd ever hear is the truth. So there you are, a powerful CEO astride some mammoth enterprise, armed with no useful information whatsoever. You know you have to do something but there's no way to know what. Your only rational strategy is to do random things until something lucky happens, then take credit.
The alternative - acting nonrandomly - is a sure loser. Let's say, for example, you're a CEO and you fire everyone whose last name starts with the letter M. That's a clear pattern, and not a good one. Everyone would think you were a nut. You see, when you don't have a good strategy, any activity that looks like a pattern just makes you look bad.
Conversely, if you act randomly, reorganizing for no particular reason, promoting idiots, merging unrelated businesses, spinning off a few divisions - that looks like leadership. It's leadership for the simple reason that your employees never would have made those changes on their own. Later when something lucky happens, you can take credit. If nothing lucky happens, call it a transition period.
I wonder what CEOs say to their spouses in private. Do the CEOs begin to believe that their management decisions are connected to the results? I bet they do. It probably sounds like this:
CEO: "Honey, I fired my VP of marketing because I didn't like his shirt, and our stock went up a point!"
Spouse: "Didn't the Fed lower interest rates today?"
CEO: "Try to stay on the topic."
posted by Dilbert
posted by ziv at 10:32 AM
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