With the flameouts of Ed Zander at Motorola and a number of hedge-fund managers whose “rocket-science” CDOs have brought the world’s financial system to the brink of ruin – oh, and the current US President – this free article at the Wall Street Journal is apropos. Titled Keys to Spotting a Flawed CEO — Before It’s Too Late management professor Terry Leap offers a set of warning signals.
Here’s a few:
- An overt zeal for prestige, power and wealth. A manager’s tendency to put his or her own success ahead of the company’s often is evident long before that person is ready to assume the CEO post.
- A proclivity for developing grandiose strategies with little thought toward their implementation. These executives may assume that others at lower levels will magically turn strategy into reality.
- An impulsive, flippant decision-making style. CEOs who approach decision-making with clever one-liners rather than with balanced, thoughtful and informed analyses can expect to encounter difficulty.
- A penchant for inconsiderate acts. Individuals who exhibit rude behavior are apt to alienate the wrong person at the wrong time.
- A superb ability to compartmentalize and/or rationalize. Some executives have learned to separate, in their own minds, their bad behavior from their better qualities, so that their misdeeds don’t diminish their opinions of themselves. An important internal check is missing. Others are always ready to cite a higher purpose to justify their bad decisions.
[emphasis added]
Prof. Leap offers several suggestions for the hiring process. My favorites:
- Don’t assume that past success is a predictor of future success. As CEO, an executive will face a whole new set of personalities and conditions, especially when switching companies.
- Determine how much of an executive’s career success has been based on favorable economic and industry conditions and the support of colleagues, and how much has been based on the executive’s individual efforts. Pay close attention to how candidates performed when industry conditions were bad, when controversies arose or when difficult decisions had to be made.
- Be clear about ethics. Provide as much information as possible to finalists about how the board expects shareholders, prospective investors, customers, employees, financial institutions, auditors, regulators, political figures and other stakeholders to be treated.
The StorageMojo take
I doubt Prof. Leap’s excellent suggestions will keep stop many bad hiring decisions. Hiring management – be they boards or voters – often fail to do the hard work of framing the problems that an executive needs to manage.
I’ve seen many executives hired whose experience and desires were only marginally related to the new job and who failed. For example, an executive in channel marketing being asked to take over marketing and product management for a direct sales company. Or a big company exec moving to a small company. Some people will surprise. Most will flounder.
Candidates are expected to put their best foot forward. The real problem is willful blindness on the part of the hiring management team. “We have problems. This guy comes from a successful company, so maybe he can solve them. Just because he never has before . . . .”
It isn’t always about the candidate. It’s the people doing the hiring. Perhaps the good professor can offer advice for that problem.
Comments welcome, as always.
Postscript
For StorageMojo’s non-US readers who’ve wondered what has happened to America: most Americans share your dismay. President Bush now has 50% of Americans strongly disapproving of his performance. Another 14% moderately disapprove.
That puts him in a statistical dead heat with Richard M. Nixon’s low point, just before he was forced to resign over the Watergate break-in coverup.
Mr. Bush is, of course, confident he will be vindicated by a higher power.
You’re right of course. The present Bush administration will be remembered as the worst catastrophe in the history of this nation. We are now a decade behind in stem cell research, we’re very deeply in debt and we have earned the disgust of most of the rest of the world. We should be living in a utopia but instead we’re forcing our elderly citizens to choose between heating their homes or paying top dollar for life saving drugs and by God they better not try to go around the big drug makers and buy from Canada. It is a sad state of affairs.
Robin,
You hit the bull’s eye
Vic:
The drug companies that are developing stem cell technologies are multinational organizations. It doesn’t matter whether its developed domestically or in Germany, France or China. Treatments will be sold here as soon as they are available. If the drug companies develop the treatments in the US, they don’t pay for most of it, the US taxpayer does, thanks to lobbyists. See Terry Leaps comments above.
When drug companies develop treatments in the EU and China, the governments own the technology in part and make it available to the populations for free or an extremely low cost. If the drug companies don’t take those development funds, they can charge what they want for the treatments.
Before you comment on the “disgust by the rest of the world” at the US policies, look at the Belgium government using priests to instigate genocide in Rwanda. Or the French government building (giving) uranium enrichment facilities to the Iranians. Or the Chinese government purchasing mines in africa and working the people to death. Or many middle eastern countries and India using gang rape and stoning to death of women for being insolent or showing their faces/without a veil or leaving the house without an escort by a man (brother, cousin, father, husband) or not marrying the husbands selected by their families.
The reason the french, germans and russians are disgusted with us is the fact the invasion of Iraq squelched their efforts to convert the currency of oil trade from dollars to euros. If you want to understand whats really going on, follow the money.
I agree our elected officials are screwing us. Selling off our dwindling bank accounts to large companies. And, its our fault. We have relegated our control of our government to special interest lobbyist. If we want control back, we need institute fixed budget election campaigns, get the lobbyist out of our government, and make it illegal for companies and organizations to be campaign contributors, – campaign contribution caps ($500) and campaign contributions from individuals only if they are citizens.
If any group of people should be disgusted its us.
I don’t think I can agree that Leap’s criteria particularly apply to Dubya, since he appears more of a tool (albeit a very willing one) of the neocon miscreants than anything resembling a real leader and his appeal (or, now, what remains of it) to the Great Unwashed never depended on anything like a rational evaluation of his talents.
But Carly Fiorina fits the criteria to a veritable T: I wonder whether he used her as a model.
– bill
Xfer, W’s fiscal policies and Greenspan’s monetary policy have gotten us to where the US dollar is in serious danger of losing its privileged status as the world’s reserve currency to the Euro – the opposite of what you say the Iraq war was supposed to accomplish. Those two are fools of the first water.
Bill, the “W as tool” meme leads straight to a “good man led astray” narrative that Rove is already trying to peddle with the silly “we didn’t want a vote on the Iraq war resolution before the elections” line. Obviously W has poor judgement but he made the decisions and he needs to be held fully responsible for them. Also, remember that if majority will had been respected in 2000 by a couple of Supremes we’d be in a very different and can’t-see-how-it-could-be-worse place today.
One can hope, against all evidence, that Professor Leap’s suggestions might make a dent on the folks doing our political reporting and analysis.
Robin
Are there any tech executives that don’t meet at least a majority of these criteria? It seems to be a requirement that a CEO of a successful tech company be arrogant, grandiose, inconsiderate, power-mad, and convinced of his own brilliance — see Larry Ellison, Steve Jobs, Bill Gates, and Steve Ballmer.
Dubya almost certainly *is* a tool of people far smarter than he is – which in no way implies that he’s anything resembling ‘a good man led astray’, so don’t presume to put words into my mouth (I explicitly said he was a *very willing* tool). As usual, you appear to be confusing reality for what marketing (in this case in the form of Karl Rove) might be able to twist it to suggest, rather than taking the view that dealing with fact rather than illusion is a large part of what separates the good guys from the bad guys and accepting the challenge of explaining the facts effectively and confronting such attempts to twist them.
I certainly believe that Dubya is responsible for his decisions (directed though they may have been) and should be impeached and removed from office for behavior contrary to his sworn duty to uphold the Constitution and for war crimes (and that he should then be tried for the latter). But while he is an unexpectedly astute politician (or at least has been able to be trained to simulate one), calling him a ‘leader’ in any policy-making sense is ludicrous – which is why he’s far from the only one who should be on trial for the actions that he has put his signature to.
But very specifically (as I thought my original response made clear) Dubya just doesn’t meet those five criteria that you listed:
1. He shows little interest in personal prestige, power, and wealth, but rather uses his position to advance the interests of an entire (though small) *class*.
2. It’s hardly clear that he ever personally developed a strategy in his life, and abundantly clear that he’s nowhere nearly smart enough to have personally developed the strategies that have led to his administration’s domination of this country (and whose roots run back to Goldwater’s stunning defeat in 1964). It’s also not clear that he ever believed (or personally formulated) any of the multifarious rationalizations for the invasion of Iraq or the rosy predictions for Iraqi acceptance of that act: rather, his administration’s tactics always seem to have been to do whatever it took to create a fait accompli and not worry about the aftermath (because the aftermath just isn’t important to their specific goals).
3. He is often indeed flippant in *discussing* his decisions but seldom appears to *make* them casually (or without extensive consultation with the people who he believes matter).
4. While plenty of his cohorts are real assholes, Dubya himself seldom appears inconsiderate (or considerate, for that matter: he’s mostly fairly aloof, reminding me a bit of someone on Thorazine).
5. To suggest that he ‘compartmentalizes’ his misdeeds is to suggest that he on some level *recognizes* them – which is not at all clear. Do you know of any evidence whatsoever to suggest that he’s introspective at all?
Most of the remaining comments centered around the idea that past success was not necessarily any predictor of future success – but Dubya never had any record of past success that might have led people astray.
Just because Dubya is a nominal leader and an utter disaster does not imply that he’s anything like the ‘flawed CEO’ that Leap has analyzed – because he was put forward as a convenient figurehead by people whose goals had little to do with the health of the ‘corporation’ in the first place (rather than by a bemused BoD which simply failed to notice his ‘flaws’).
And those people have been staggeringly effective at achieving their goals. Dubya himself may have an abysmal approval rating, but that hasn’t translated into any change in the direction or reduction in the speed with which the country is proceeding toward the abyss. Many Democrats are so impressed with the grasp that the neocons have on our voting public that they’re assiduously emulating them (just in a nominally kinder, gentler fashion). Having served his two terms Dubya is now eminently expendable, and given that he won reelection in 2004 despite poor approval ratings even then the chances that some other Republican will coast to presidential victory in 2008 on an “I’m not Dubya but I’m not one of those wimpy Democrats either” platform seem pretty good.
So don’t be a wimpy Democrat yourself: rather than grasp at convenient straws (“Dubya is like a bad CEO”), buckle down and really grapple with the underlying issues (“Dubya is the titular head of a consortium which has consciously and effectively hijacked our democracy”).
– bill
Robin,
Frankly, the list applies much more to Bill Clinton. Greenspan did the same economics stuff during the Clinton years – he believes in bubbles, having blown up two (dot-bomb and housing). Unfortunately the economics stuff is a bi-partisan problem. Anyway, enough on politics – you’re lucky you don’t have a massive flamewar going.
Robin, I visit your blog for your analysis and discussion of technology. I don’t always agree with your opinion, but it’s almost always an interesting read. For a blog called “StorageMojo”, it makes sense to discuss the political angle in relation to, say, Seagate’s proposed buyout by a Chinese firm, but this posting of yours is purely a political rant. I know it’s difficult not to throw the occasional jab and make comparisons to the messy state the current US administration has us in, but guess what? I don’t care that you’re a democrat. I don’t care that you hate GWB. Why bother to throw a Motorola reference at all, you may as well have gone straight into your political ideology.
Then again, your blog, of course you can post whatever you like. However, please don’t expect your readership is at all interested. I guess I should have known better when I read the title for this entry.
AnnoyedReader writes: “However, please don’t expect your readership is at all interested. ”
Please don’t for a second think that you speak for the readership, other than yourself. We (the REST of the readership) are all quite capable of speaking for ourselves, thank you very much.
Regardless of the CEO in question I have to agree with Robin’s conclusion that the good Dr.’s advice will rarely be followed. The current, continuing, culture of hiring (electing) CEO’s that are simply not qualified for the job and then actually rewarding them for their failures is indefensible. Screw up a company? Here’s your multi-million dollar severance package, shareholders be damned; heck, we’ll even pay the tax on that. Now let’s ignore all the lessons learned and go out and hire another exec just like the last one.
Dear lord, there are already far too many websites arguing back and forth about politics. Its just like religion, your not going to change each others minds. Can’t we get back to arguing about technical stuff, and facts that can be proven and disproven?
Robbin,
Thanks for your comments, I just wanted to clarify. I’m not a supporter of the action in Iraq. It was an ill conceived strategy, one of the worst I can remember, outside of the Soviet action in Afghanistan and the conversion of farmlands in South Africa. Although the action in Iraq was for several reasons, the economic policies pertaining to funding the action are the most scary. Although, they prevented OPEC from trading oil in Euros, the value dollar is screwed. We are in a waiting game, or a game of chicken, to see who is going to give in first the rest of the world or the US administration in bed with some of the most powerful multinational corporations who control the energy that powers the world.
In fact, most of the issues with the dollar are due to the multinationals and large foreign government’s dumping their dollar reserves , flooding the market. In part, its a gift from our oil company buddies for being taxed on the $100billion in windfall profits from the last two years. The other part is the French, Germans and Russians dumping dollars, another gift for kicking them out of Iraq. These organizations are not our friends, they are out to screw us anyway they can.
The US govt. took out loans in excess of $650 billion from China to support activities in Iraq. When the loans were issued (in dollars), the dollar to yuan value was much higher than it is today. If the US decided to payback the loans tomorrow, the chinese govt. would lose about 35% of their loan’s value in exchange rate. So, they don’t ask for the money back and it’s an incentive for china to keep the dollar high. (If you borrow $10K for the bank and can’t pay them back, you are in trouble. If you borrow $100M from the bank and can’t pay them back, the bank is in trouble.)
Much of the loans from china are 0% interest. Hmmm, why would the china do something like that ? Well, the US govt. is now turning a blind eye to china’s activities in Africa. Also, china now must buy oil from oil companies backed by US troops blocking pipeline land (Iraq) between the high yield oil fields and china. BTW, the pipelines must go through Iran to get to china. Convenient.
This administration is in a game (with our lives), where they are in well over their heads and out skilled. We are competing with political rivals that have hundreds and thousands of years more experience than our administration has.
Fair enough, I can’t speak for everyone…I just grab the RSS feed for this site, so I didn’t realize this post was in the “off topic” section. I suppose that’s appropriate, but there’s a lot of storage stuff in there too. Maybe a politics section would be better so it could easily be avoided by those of us who don’t like to mix US foreign policy with storage.
$650 billion is probably a fairly conservative estimate of costs to fight the war to this point. It seems that 2 or 3 times a year the Bush administration asks congress for 70 to 100 billion in “emergency funding”. It seems reasonable to me to conclude our interest in the middle east has primarily to do with the economics of oil and our desire for stability of the area and the continued flow of that oil.
Imagine if we took a different approach and instead made ourselves more independent of OPEC. According to the DOE we have 104 nuclear power plants in operation producing 20% of the total US power generating capacity. From what I’ve read regarding construction costs it would cost about $200 billion to double our current capacity so for $400 billion we could be generating 60% of our power via nuclear. Investing in our nuclear power infrastructure would create jobs and stimulate the economy and in the end we would be more self sufficient and we would have significantly reduced greenhouse emissions. All for $100’s of billions less than the cost of war up to this point.
I think this comment on Bush is blinkered. Bush has his failings, but his position was always of not having a strong republican mandate. His behaviour is to a large extent consistent with trying to honour that fact: interventionist, spend-a-lot, ignore distinction between states and federation (ie. New Orleans), etc etc. Even looking to quite liberal ways of trying to solve immigration and healthcare problems.
Even the war in Iraq was effectively caused by bad intelligence. The lack of a proper UN mandate is a red-herring. The UN is impractically slow in times of emergency.
But by attempting to honour the lack of clear republican mandate he has displeased both sides. It wasn’t inevitable that this should be, but I suspect his personal integrity, which I reckon is intact, prevented a more clintonesqe pleasing of the peoples.
I know this post is old but I’ve been reading it with thoughts of Obama in mind and it still applies .
(An overt zeal for prestige, power and wealth. … often [it] is evident long before that person is ready to assume the CEO (or presidents) post)
When Obama was a presidental CONTENDER, he traveled to the middle east in attempt to broker a peace accord even though he was just a senator at the time and had no legal right or voter mandate to be there.
(A proclivity for developing grandiose strategies with little thought toward their implementation.)
Obama promised over and over during his campaign to provide health care and a college education for all americans, not to mention his wealth re-distribution, but to my knowledge, he never once actually spelled out, word for word, how he was going to accomplish this.
(An impulsive, flippant decision-making style. CEOs who approach decision-making with clever one-liners rather than with balanced, thoughtful and informed analyses can expect to encounter difficulty)
Clever one-liners … “Yes We Can!” … need I say more?
(A superb ability to compartmentalize and/or rationalize. Some executives have learned to separate, in their own minds, their bad behavior *or bad choices* from their better qualities, so that their misdeeds don’t diminish their opinions of themselves. An important internal check is missing.)
Bill Ayers. Rev. Wright. Most any of his office appointments … Tax cheats, and Lobbiests … Hillary.
(Don’t assume that past success is a predictor of future success. As CEO, an executive will face a whole new set of personalities and conditions, especially when switching companies.)
What exactly is a community organizer anyways? For some reason I never felt that Obama “sitting on Boards and Commities” qualified him to run a McDonalds .. Much less the United States.
I would continue with the rest of it and add some thoughts of my own but its late and I have to get the kids ready for school in 4 short hours … I’m sure anyone who has actually “seen” (observed for themselves) instead of just accepting the media’s take on what is currently going on can fill in the blanks.