7/26/2007

#168 Just Lucky, I Guess

To start the new year off, the goofy head of the University of Minnesota's Athletic Department, Joel Maturi, fired football coach Glen Mason. I suspect that most college football fans outside of Minnesota don't even know that Minnesota had a University of Minnesota football team. Mason's overall record was 64-57. His conference record was 32-47. Even more hilarious was his record against Top 25 teams: 5-27.

The chances are pretty good that any half-decent high school coach could drop into the Minnesota program and do as well as Mason, at a tiny fraction of the cost. The cost is the issue, here. Mason was grossly overpaid, $1.65 million a year, and will continue to be a cash drain to the state, $4 million in other payouts after being fired for incompetence. Minnesota's state college system, like most state college systems, has become unaffordable to anyone but little rich kids, who only go to schools

I guess this is more of academia following in the foolish footsteps of business. Executives regularly get rewarded for incompetence. In fact, there is no way to connect business success to any action or activities of executives. Corporations pay the giant, wasteful salaries of CEOs and other white collar criminals because nobody tells them they shouldn't, can't, or will go to jail if they do. Jail is exactly where a board of directors should be sent when they sign off on a huge paycheck for non-producing executives. "Non-producing" means non-inventing, non-manufacturing, or non-sales producing. A manufacturing company that pays an accountant or lawyer CEO millions of dollars is wasting money on a non-producing executive. A technology company that does the same is pretending that bean counters inspire innovation. That is simply bullshit and everyone in these companies knows it is bullshit.

Glen Mason was a boring, predictable coach who inspired mediocre performances from his organization. Anyone who watched more than two Minnesota games could guess what play Mason would call in a given situation. Most of his opponents were able to anticipate his habits, which resulted in his mediocre record. Mason's only saving grace was that many of his opponents were the same kind of overpaid, underachievers.
My wife, upon hearing the morning news of Mason's firing and the money waterfall that he would enjoy as a result of his failure, asked "what do you have to do to get one of these jobs?"

That's one hell of a question. I've sat in board meetings, surrounded by million dollar salaries and powerful men, and wondered exactly the same thing. I saw no evidence of superior intelligence, exceptional management abilities, brilliant intuition, or incredible math skills. I mostly heard middle aged men worry about how various business problems would affect their stock options and bonuses. The intellectual level of the discussion was depressingly low. Business or technical insight was totally absent. Simple, base self-interest ruled the meetings and I have a hard time imagining that many companies are different than the companies I experienced. The people are the same, sometimes exactly the same people who crush one company move on to destroy another, so why would their motivations change?
Luck has a lot to do with who gets the big bucks and who is paid less generously.

The best thing a corporate exec can do is to avoid work. Real work (research, invention, design, manufacturing, project management, and, even, sales) involves risk and failure. Fake work (accounting, legal council, marketing, sales management, and administration) appears to be accomplishing something practical, while avoiding risk and failure. Accountants simply count the beans others grow. Lawyers forever "practice law," so any mistake they make they can blame on the ambiguous character of the legal system, while claiming any accidental successes to their own brilliance. Marketing departments are often a simple waste of air. Watch television for a couple of hours for all the evidence you'll need to prove this argument. Sales management and administration are non-service providing organizations that expand to fill the available space, but they rarely provide value to the people they pretend to serve and never take the blame for organizational failures, since they don't produce anything that is directly related to the organization's success. Characters from these areas of an organization often rise to the top, simply because they've been lucky. They've never been identified with a project failure, they've never directly lost the company money, and they take credit for every project that has succeeded in their general area.

In a rational world (business, political, or academic), big mistakes would carry big penalties. If a professor at the UofM lost the college a few thousand dollars, he would surely be fired almost instantly. Joel Maturi made mistake after mistake with Mason, including upping the scumbag's contract when Mason shopped himself to other institutions while still under contract with the UofM. In the end, Maturi spent $5.6 million of the state and university's money on a non-performing, then fired, coach and there is no sign that Maturi will pay any price for his incompetence. This kind of irrational behavior happens all the time in business, which probably explains why an MBA isn't ridiculed as being a "gimme degree" like FizzEd or Communications.
Money, like water, apparently flows downhill. The lower the institutional value a person represents, the more money is attracted to that person. The key to becoming grossly overpaid, and rewarded for gross failure, is to begin your career being useless and to perfect that quality. And be very, very lucky.

January 2007

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