All Rights Reserved © 1999 Thomas W. Day
Believe it or not, the Rat is being heard. Last week, I received a note from an executive who objects to my belief that, if everyone of the executive floor of a typical company were to die from catered lobster bisque poisoning, it would be weeks, months, or years before the rest of the company noticed. My lone protesting exec claims that execs are hard-working, over-stressed, and reasonably paid for the value they provide to their companies. I beg to differ.
There's a difference between working hard and being productive. For most adults, spending a dozen hours a day with the nose buried in the next-guy-up-the-ladder's butt is difficult, stressful, and only gets done with an expectation of something of value (like lots of money). However difficult that kind of activity may be, it isn't something that provides value to the business.
This is along the lines of my arguments about MBA degrees. Several readers have protested that the path to earning an MBA is as difficult as the route to something more useful. Academia can make anything hard. That doesn't prove that the actual course material is complex or hard to master, it just proves that academia would complicate selling (or giving away) ice cubes in Death Valley.
The history of the management class of humans, ever since the earliest days of clan chiefs, has been self-serving. In the dirt-floor days, a guy got to be king because he was an effective military leader (or he was the only guy left alive after the battle and the ones who stayed home mistook survival as a battle skill). It seemed to take one generation of inherited power for early royalty to forget their purpose and function. It might be true that war skills could be handed down a generation or two, but it probably wasn't. Humans tend to drift toward easy answers and the concept of inherited intelligence, skill, and courage is, mostly, a myth.
Not all that long ago, business leaders were, mostly, business founders. When a company survives the first decade or two, there is usually some skill behind the start-up. However, that skill doesn't necessarily reside in the founder, let alone his genes. Sometimes, a lucky early hire provides the talent and drive that pushes a company past the early failure zone.
Henry Ford was a great example of a founding father who couldn't have kept an ice cream truck business alive, on his own. A certifiable fruitcake with the magnetic personality of the guy holding the pitchfork in the Grant Wood painting, "American Gothic," Ford lucked into a couple of key employees who created his "legacy" and fortune. The assembly line, the mechanical genius that separated the early Ford cars from the rest of the automotive pack, and the organization systems that were necessary to Ford's survival (and which Ford did his personal best to destroy) were all created and supervised by mid-level managers. Now that we're a dozen generations away from that sketchy origin, the Fords who are left in control probably can't even drive a car, let alone make one.
These days, what passes for business leaders are too often a dramatically different group from "founder" types. The typical management types are in the Roger Smith (of GM infamy) class. Their claim to leadership is more based on their ability to avoid critical decisions, suck up to whoever's currently on top (while positioning themselves for an opportunity to slip a knife between the ribs), and an unerring obsession toward their own personal power and profit. This sort of character is the origin of the old rule that anyone who wants to lead is someone who ought not to be allowed near the job. Again, while all those devious activities are complicated and energy draining, they're not productive.
The biggest flaws in the ointment of many of the largest companies' organizations starts at the top and slithers its way down the ladder. Management is paid so outrageously that long-term corporate goals are sabotaged in the interest of making the next quarter's financial objective. The stock options from a single strong quarter can make a CEO a rich man, eliminating any interest in building a solid foundation for a company's long term success and health. Still, none of this stuff adds any value to the business.
As a culture, we seem to be able to recognize why this is unmotivating and corrupting when it happens to professional athletes, but don't seem to notice it when it's going on in our own companies. I suppose this is yet another thing we should thank the media for ignoring. Otherwise, we'd all be a lot wealthier and more secure and . . . where was I going what that?
The incestuous relationship between corporate execs and stock analysts complicates these defects even more. Analysts are no more interested in a company's long term health than that company's competitors might be. When a CEO and a pack of analysts climb into bed to create a bump in the stock value and a run of short-term profit taking, employees and non-conspiring investors have no protection. The SEC pays a little attention to this kind of stuff, but only if it's so blatant that there's no way to ignore it. The government's job is, primarily, to protect the interests of the rich and powerful. The rest of us are on our own. Still no value added.
While there's a lot of "work" going on, in climbing to and hanging on to those luxurious corner offices, hardly any of it benefits the organization. Most of the effort expended by the executive class is self-serving and always has been.
So, Mr. Exec, I'm sticking with my popguns. Until I see some evidence that you guys actually do something useful, I'm not going to make the leap of faith that you seem to think is due. But thanks for playing and try again when you have an argument that makes sense.