5 ms·

"Determines a vision and strategy..." ...and for this nebulous MBA speak, gets paid 40x as much as the people who actually do work.

michael_dorfman 16y ago
Well, it's not always 40x. Here in Norway, it's more often 3x-5x (except in the largest companies.) And don't knock the value of determining a vision and strategy: people don't just wake up in the morning knowing what they should be doing at the office today/this week/this year. If you don't think a clear vision and strategy matters, just ask Yahoo.
- mhd 16y ago
  I don't think we neccesarily disagree about that, it's just that "setting a strategy" by itself means diddly-squat, so giving that as your task description is needlessly vague. "Proactively implement executive paradigms"
- grammaton 16y ago
  I'm glad it's like that in Norway. You're a lot saner than most countries. Here in America 40x is closer to the mark. And i'm not knocking the value of thinking carefully about the next step. That's an obviously important thing. I just don't see why someone should be paid so much more to sit around thinking about the next step than the people who actually implement the "vision."
  - oz 16y ago
    I suppose it's for the same reason that buildings are attributed to architects, and symphonies to composers, rather than to builders and musicians.
    - davidw 16y ago
      Wouldn't "setting a strategic vision" be more akin to "let's write a happy little ditty about love in the spring" than actually sitting down and composing a song with notes for all the various instruments?
    - grammaton 16y ago
      Having spoken to actual CEOs, I think it's a bit of a stretch to put them in the same class as famous architects and composers. The latter are identifiable, and to some degree quantifiable, skillsets that require training and a certain degree of talent. I'm not so sure you can say the same thing about being the guy who makes sure that cross disciplinary paradigms for excellence synergize with the vision's core values.....
  - johnrob 16y ago
    The reason is that the market value of companies who pay 39x is less than those who pay 40x. 40 may not be the perfect number, but the market is working toward finding it. In other words, CEOs get paid X under the premise that they will cause the value of the company to increase by more than X.
    - three14 16y ago
      I don't understand why people assume efficient markets. This is a good example of a market where I'd assume that the market is not efficient - there are poor information flows about CEO value; empirically, CEOs who are paid a lot don't often seem to steer their companies well; there are skewed incentives for the board since board members may very well be CEOs at other companies; there's very indirect shareholder control over pay; the company as a whole is unlikely to fail if they overpay since CEO pay is usually a small part of the whole budget, etc. Shouldn't you have to prove the surprising premise that the market is working?
Alex3917 16y ago
It's not really any more nebulous than coding and debugging.
- grammaton 16y ago
  Yes it is. Coding and debugging are concrete processes with measurable results. They require quantifiable skills and training. Which one sounds more concrete: "I cleared out the ticket queue and wrote tests for all outstanding issues" or "I thought about my vision."
  - Alex3917 16y ago
    Which one sounds more concrete: "For our design brief I came up with ten design elements that fit with the message we're trying to sub-communicate on our website, and found five examples of each element used on various sites across the web." or "I spent three hours talking to my computer." The point is if it sounds that nebulous it's probably because you don't understand what they're actually doing. To someone who doesn't understand what coders do, coding sounds just as nebulous as 'business stuff'. Now it's possible that the business person isn't actually doing anything, but then again it's just as possible that the coder isn't actually doing anything either.
    - grammaton 16y ago
      Any programmer who says "I spent three hours talking to my computer" is not a programmer. It's true that if you push someone on their vague talk they may become more concrete and specific. I'll grant you that there are CEOs out there who, once you get past the nebulous weasel-words, can articulate a clear plan for what the company needs to do and where it needs to go. Those are good CEOs. I would bet the vast majority, once you push them on it, would respond with more of the same, and if you continued to push them on it, would ultimately defer to an underling for specifics. It's not even the mumbo-jumbo that annoys me. It's fine if you want to say that a CEO sets the direction, goals, and overall plan of the company. I can believe that, and it's certainly valuable. What I cannot believe or accept is that they deserve to be paid an order of magnitude more money for doing so.
jamiequint 16y ago
All that "determines a vision and strategy" means is "deciding what the company should do next". Which isn't really nebulous at all, and its impact on the organization can be directly measured by success/failure. E.g. Ben Horowitz "determined the vision and strategy" for Loudcloud when they moved away from managed services market and spun out Opsware, which led to a 1.6Bn exit. (http://voices.allthingsd.com/20100317/the-case-for-the-fat-startup/ http://voices.allthingsd.com/20100317/the-case-for-the-fat-s...) Its hard to argue that there was no value in that.

michael_dorfman 16y ago

Well, it's not always 40x. Here in Norway, it's more often 3x-5x (except in the largest companies.) And don't knock the value of determining a vision and strategy: people don't just wake up in the morning knowing what they should be doing at the office today/this week/this year. If you don't think a clear vision and strategy matters, just ask Yahoo.

mhd 16y ago
I don't think we neccesarily disagree about that, it's just that "setting a strategy" by itself means diddly-squat, so giving that as your task description is needlessly vague. "Proactively implement executive paradigms"
grammaton 16y ago
I'm glad it's like that in Norway. You're a lot saner than most countries. Here in America 40x is closer to the mark. And i'm not knocking the value of thinking carefully about the next step. That's an obviously important thing. I just don't see why someone should be paid so much more to sit around thinking about the next step than the people who actually implement the "vision."
- oz 16y ago
  I suppose it's for the same reason that buildings are attributed to architects, and symphonies to composers, rather than to builders and musicians.
  - davidw 16y ago
    Wouldn't "setting a strategic vision" be more akin to "let's write a happy little ditty about love in the spring" than actually sitting down and composing a song with notes for all the various instruments?
  - grammaton 16y ago
    Having spoken to actual CEOs, I think it's a bit of a stretch to put them in the same class as famous architects and composers. The latter are identifiable, and to some degree quantifiable, skillsets that require training and a certain degree of talent. I'm not so sure you can say the same thing about being the guy who makes sure that cross disciplinary paradigms for excellence synergize with the vision's core values.....
- johnrob 16y ago
  The reason is that the market value of companies who pay 39x is less than those who pay 40x. 40 may not be the perfect number, but the market is working toward finding it. In other words, CEOs get paid X under the premise that they will cause the value of the company to increase by more than X.
  - three14 16y ago
    I don't understand why people assume efficient markets. This is a good example of a market where I'd assume that the market is not efficient - there are poor information flows about CEO value; empirically, CEOs who are paid a lot don't often seem to steer their companies well; there are skewed incentives for the board since board members may very well be CEOs at other companies; there's very indirect shareholder control over pay; the company as a whole is unlikely to fail if they overpay since CEO pay is usually a small part of the whole budget, etc. Shouldn't you have to prove the surprising premise that the market is working?

Alex3917 16y ago

It's not really any more nebulous than coding and debugging.

grammaton 16y ago
Yes it is. Coding and debugging are concrete processes with measurable results. They require quantifiable skills and training. Which one sounds more concrete: "I cleared out the ticket queue and wrote tests for all outstanding issues" or "I thought about my vision."
- Alex3917 16y ago
  Which one sounds more concrete: "For our design brief I came up with ten design elements that fit with the message we're trying to sub-communicate on our website, and found five examples of each element used on various sites across the web." or "I spent three hours talking to my computer." The point is if it sounds that nebulous it's probably because you don't understand what they're actually doing. To someone who doesn't understand what coders do, coding sounds just as nebulous as 'business stuff'. Now it's possible that the business person isn't actually doing anything, but then again it's just as possible that the coder isn't actually doing anything either.
  - grammaton 16y ago
    Any programmer who says "I spent three hours talking to my computer" is not a programmer. It's true that if you push someone on their vague talk they may become more concrete and specific. I'll grant you that there are CEOs out there who, once you get past the nebulous weasel-words, can articulate a clear plan for what the company needs to do and where it needs to go. Those are good CEOs. I would bet the vast majority, once you push them on it, would respond with more of the same, and if you continued to push them on it, would ultimately defer to an underling for specifics. It's not even the mumbo-jumbo that annoys me. It's fine if you want to say that a CEO sets the direction, goals, and overall plan of the company. I can believe that, and it's certainly valuable. What I cannot believe or accept is that they deserve to be paid an order of magnitude more money for doing so.

jamiequint 16y ago

All that "determines a vision and strategy" means is "deciding what the company should do next". Which isn't really nebulous at all, and its impact on the organization can be directly measured by success/failure. E.g. Ben Horowitz "determined the vision and strategy" for Loudcloud when they moved away from managed services market and spun out Opsware, which led to a 1.6Bn exit. (http://voices.allthingsd.com/20100317/the-case-for-the-fat-startup/ http://voices.allthingsd.com/20100317/the-case-for-the-fat-s...) Its hard to argue that there was no value in that.