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Evaluating the 'Doofus Factor' In Corporate Governance
PolygamousRanchKid writes with this quote from an article in the Economist:
"The directors of Yahoo! were 'so spooked by being cast as the worst board in the country' that they fired Carol Bartz as chief executive 'to show that they're not the doofuses that they are.' That was Ms Bartz's typically blunt verdict, offered to Fortune after she was dismissed with a phone call by the internet firm's chairman, Roy Bostock, on September 6th. She would say that. Yet Ms Bartz's criticisms of the board have been sympathetically received. Firing a chief executive by phone smacks of hasty, panicky decision-making. And Yahoo!'s board already had a poor reputation, having turned down an offer from Microsoft that valued the firm at several times what it is worth today. It is not just Yahoo!'s board that is feeling the heat. The directors of HP, another stumbling Silicon Valley giant, have been accused of serial ineptitude spanning the appointment and dismissal of Carly Fiorina as chief executive, the firing of her successor, Mark Hurd, and the selection of his replacement, Léo Apotheker. ... There is growing demand for boards to undergo a formal evaluation process, to assess both the performance of each individual board member and how they work together as a group. The European Union is considering new regulations that would require an independent evaluation of the board every three years."
A significant amount of research has been conducted that demonstrates monetary incentives that are too high actually severely decreases the effectiveness and productivity of a person to levels even lower than when monetary incentives are too low. I have no doubt this happening to corporate CEO boards across the western world. Any of these corporations could hire perfectly competent CEOs from business schools for 1/10 their current pay. But like frat boys they all sit on each others' boards and give each other multimillion dollar raises, bonuses, and parachutes, all at the investors' expense.
They don't run companies effectively because they aren't really in charge of the company. Most board members do completely different things as day jobs. Some are on five or six boards. You cannot effectively run six multinational companies and also have a day job at a seventh, though you can surely succeed at pulling in seven salaries.
For example, when there were some shady stores about Cisco coming out earlier this year, I looked up their board to see who I could contact. Oh, one of them is the President of Stanford University. How much time do you think the President of Stanford spends keeping tabs on Cisco's corporate affairs, making sure that the company is run properly? Another one is, uh, Carol Bartz, until recently the CEO of Yahoo being discussed here. How much time do you think Carol Bartz took out of her Yahoo day job to make sure Cisco was being responsibly governed? Yet another Cisco board member; Michele Burns, CEO of Mercer, the world's largest H.R. consulting firm. Do you think she spent lots of her free time, when not running Mercer, to make sure Cisco is doing things right?
No, in practice, the boards don't have any idea what's going on, the CEOs all sit on each others' boards anyway, and the boards therefore leave things to the CEO, ignorance-is-bliss style, until someone forces them to care, either because the stock price is tanking, there is bad media attention, or unwelcome attention from prosecutors.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Junk ... this is an example of statistical manipulation for emphasis. If it is four times more likely to be psychopaths , and the ratio is 1 in a million. Then all you have is 4 in a million.
Simply put, these groups suffer from group think. Happens to every group, and we likley suffer from it as well (e.g. in any group of like thinking people say organized religions, sport clubs, political followers). They can walk down a one way dead and each will pat each other on the back all the way.
PS: Do not forget, it may take a marginal psychopath to run those companies. Your statistics did not say if these psychopaths are the successful CEOs or not.
James Carville, who was Clinton's right hand man just wrote advice to Obama, on how to look more compentent. His advise was to do lots of firings to appear in charge and for them to be scapegoats.
It works for past presidents like Reagan, Clinton, and Bush Jr. Surely, the board did this for the same reason to appear like they are doing their jobs etc. Many in upper management reading this can relate to newer guys coming and firing people in order to appear all scary and powerful to their new employer.
Most of the smart people who pay attention can see right through this.
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Sadly when you are dealing with a doofus corp you can't even hire from within because middle management is usually dipshits as well.
I had one client that I told I didn't have time to be their admin after setting up their system, but I'd put them in touch with a couple of competent admins that were rock solid, take their pick. What did they do? Some PHB decided 'they cost too much! i know a guy who's a wiz at computers! I bet he could do it" and I bet the admins out there can already see where THIS is going.
Well I get called back in a little over a year after their "wiz" got caught looking at porn and running a Q3 server when he was supposed to be working and they were having "little problems"...little problems my Irish ass. this genius had GOT RID OF THE DESKTOPS that I had bought because they were 'too weak" and built gamer desktops piecemeal from tigerdirect, so give up making images or deploying anything as NOTHING matched, got rid of my standard Sonicwall for a bunch of those shitty blue DLink routers and was using a bunch of HOME CONNECTIONS from various ISPs. Somebody want more speed? he'd hire another ISP. Needless to say I had to shitcan the whole thing but the PHB had already gotten his bonus and moved on so didn't get the blame.
And it is THAT, that right there, that to me marks the dufus problem in a nutshell. it is upward failure where doing dumbshit yields a quick gain followed by a HORRIBLE outcome, but the gain gets the dufus moved up or a "selling point" on his resume and he/she is out of their before the excrement hits the bladed cooling device.
I mean how many guys here have dealt with a company butchering IT and then they acted amazed when the shit falls apart? or tries to get too much done with too little and the first real problem is a trainwreck of biblical proportions? That is why I got out of corporate, got tired at beating my head against the wall while dealing with shit that went right off the stupid meter scale. Hell I have a buddy still in who actually got drug to regional HQ by a PHB that wanted him fired because, and I quote "You have NO RIGHT to tell me who I can speak to! You WILL let my emails through from Melissa through or you're fired!" That's right folks, he was fighting FOR the right to get infected! Lucky the regional head knew a tiny bit and watched the news so he knew what the Melissa bug was, otherwise he could have been fired.
I just can't take that level of dumbshit anymore, I just can't. At least with SOHOs, SMBs, and Home Users, they KNOW they don't know shit and that is why they hire me, so that I can tell them what to do and help them be smart and safe. With corporate there always seemed to be someone who knew just enough to be dangerous as hell, and had just enough power to serious fuck the whole works. Some guy who thinks he knows IT, or some bean counter who think the gear will last another two years when they cheapskated and bought cheap shit in the first place that started dying when the warranty went, just ignorant dumb stupid ass...ugh. If you still do corporate? My prayers are with you friend, may you have a strong stomach and have an immunity to headaches.
ACs don't waste your time replying, your posts are never seen by me.
The reversible argument is just a common pastime that allows people to try to dump blame for something on others. It is not unique to sociopaths. What you are looking for is a systematic disregard for the rules and standards of society and violating the rights of others, especially including breaking those in such a way as they do not usually get punished for it. This can be either because of careful planning, manipulation of peers, making it a hassle for others to stop them, appealing to pity, political influence, etc...
To put it frankly, you are looking for a pervasive, but not necessarily omnipresent, pattern.
A few things to help you out though:
- They do not honor commitments unless it is specifically in their self interest to do so, such as to impress someone important.
- When they are confronted, they will almost never admit responsibility unless they themselves recognize it is advantageous to do so. They will usually either fly off into a rage to scare you away or others into stopping you or launch into a ridiculous appeal for pity, complete with all sorts of BS mind-games like the one you mentioned.
- They get board easy and are frequently impulsive. So, they like to find people to brag about their exploits to if they cannot find something or someone new to torment and destroy, bonus points if they can torment someone while bragging to them.
- They feel that being antisocial makes them smarter than everyone else, because having a conscience retards us and makes us easy to mess with.
- They like collecting tools to do their dirty work for them. But, will actively eliminate anyone deemed to be a competitive threat to them, often using the aforementioned.
- They can mimic complex emotional expressions, but the top half of their face frequently does not match the rest of the body.
- One tell tail I have noticed is the wicked "I have won!" gleeful smile accompanied by hollow eyes when they are actively terrorizing someone or something and getting away with it.
That ended up being a lot longer than I thought it would...
Any sufficiently advanced influence is indistinguishable from control.
Why is it that sacking peons as fast and impersonally as possible makes you a strong, visionary, leader who is willing to make tough decisions; but sacking your CEO good and hard makes you a panicky dumbass?
Junk
Interesting that you just think you know this, even though the statistical rate of psychopaths is 1-4% for men.
/needing/ to be a marginal psychopath to run a company -- this suggests that you really don't know what a psychopath is. A psychopath is a mimic that cheats on the social programming on regular people. Thinking that psychopaths have a place in society is like think that pedophiles have a place in society. It is a dangerous pathology.
Every human being should do themselves a favour and watch Kathryn Shultz's TED lecture on being wrong.
As for
Perhaps you need to be a marginal pedophile to be a priest?
Like all pain, suffering is a signal that something isn't right
hairyfeet opined:
THAT, that right there, that to me marks the dufus problem in a nutshell. it is upward failure where doing dumbshit yields a quick gain followed by a HORRIBLE outcome, but the gain gets the dufus moved up or a "selling point" on his resume and he/she is out of their before the excrement hits the bladed cooling device.
What you have just described is the fundamental career philosophy behind the MBA. To state it another way, the default MBA business strategy is: "Ramp up short-term profitability by whatever means is necessary/convenient, regardless of long-term consequences for the company, because by the time those consequences arise, you will have been hired away to work at a different company, at a higher pay grade, and dealing with those consequences will have become somebody else's problem.
The problem for the Western economy is that, ever since the Reagan administration (or the Thatcher administration, or the Mitterand administration, or ... but you get the picture), MBAs have progressively grown in influence to a position of utterly dominating corporate governance in every country outside of China. It is they who are responsible for exporting the bulk of Western industrial production to developing countries, it is they who were responsible for creating and marketing poisonous mortgage-backed derivative securities (and thereby crashing the global economy - a process that is only now reaching its middle, rather than ending), and it is they who dominate corporate boardrooms.
It's not so much that they are psychopaths. It's that they have been trained to be psychopaths by the most prestigious business schools in the Western world. And this all in the name of delivering maximum value to shareholders.
The problem with the MBA philosophy is that the only shareholders that matter - because they are by far the largest shareholders - are institutional shareholders: insurance companies, pension funds, banks, and so on. And these shareholders' investment portfolios are run by - you guessed it - MBAs, who have absolutely no loyalty to anyone or anything except themselves. They'll kick a fundamentally-sound stock to the curb in a heartbeat, so long as their spreadsheets tell them that a company down the block is offering higher short-term profits, regardless of how unsound that new company's long-term outlook might be, because they don't invest for the long term.
Which, incidentally, is why Wall Street and its fraternal counterparts have been experiencing day-to-day mood swings like a bipolar teenager with PMS. In fact, that phenomenon is a result of the MBA-mediated migration to algorithmically-based automated trading systems, which, by intent completely ignore long-term value in favor of short-term gains produced by, essentially, day-trading on a massive scale.
And, short of outlawing MBAs and hanging all existing holders of the degree, I see absolutely zero chance that this utterly broken system that rewards only MBAs will - or, for that matter, can - change for the better any time in the forseeable future.
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