3 ms·

Nadella can only "move the needle" and have a big impact because of the high leverage of the position he's in. That has little to do with the skill required to

by CamTin 8y ago

Nadella can only "move the needle" and have a big impact because of the high leverage of the position he's in. That has little to do with the skill required to pull it off, unless high-stakes decision-making is inherently more difficult than low-stakes decision-making. In sports, the ability to perform especially well in high-leverage situations is called "clutchness" (as in "comes through in the clutch") and it's a real debate whether or not it exists at all. I'm of the opinion that it probably doesn't (good pitchers are just good pitchers, regardless of the leverage of the pitch), which effectively is the same opinion that leads me to believe that "transformational leadership" is a scam and the whole C-suite is vastly overpaid basically everywhere.

repsilat 8y ago
"How difficult" isn't really at issue -- value is. If Nadella provides 1% more value than the next guy, that's a lot of money (from leverage, as you say.) Why wouldn't Microsoft pay top dollar for him if it means not settling for a lower market cap? And sure, 20% of idiots and 12.5% of fair coins might have made all the great decisions Nadella did, but as a board of directors, do you want to sample from coins or idiots or second-best CEOs when billions of dollars are at stake?
- CamTin 8y ago
  Well first, I'm not talking about pay necessarily, though executive compensation is (IMO) out of control. I was more referring to the intangible "respect" afforded to decision-makers (aka "leaders"). As far as pay goes, you can say they have a "big impact" all you want, but that's not how any other labor market works: it doesn't matter how much value my labor provides. Plumbers are paid the same to fix the toilet in the Louvre as they are at the gas station down the street from it. Leverage or no, my salary is determined by how little other, similarly skilled people are willing to take. If you can find somebody as skilled as Nadella in the technical skill of managing a software company, but for much less money, then you should either hire that other person or make Nadella take the lower salary. But again, I'm not talking about money. These corporations have shareholders, and the shareholders are free to overcompensate whichever of their employees they choose too, even the C-suite. My point is that we revere "leaders", our "history" classes (unless you actually study history at a univesity) are mainly hagiographies of past "leaders," and every societal norm tells us that "leadership" is this powerful, ineffable magic. It's not. There's no such thing. Some people are in charge. They might even be powerful. They might get incredible things done. That doesn't mean that people who could have gotten the same things done given the same power or leverage are scarce. Management is a technical speciality, probably one that's less difficult than, say, being a good welder. We pay good welders tons of money too. I'm not trying to say either is overpaid. I'm just trying to say "leadership" (i.e. directing the work of others, business strategy, and decision-making) is over-valued in terms of respect and esteem.

by CamTin 8y ago

repsilat 8y ago

"How difficult" isn't really at issue -- value is. If Nadella provides 1% more value than the next guy, that's a lot of money (from leverage, as you say.) Why wouldn't Microsoft pay top dollar for him if it means not settling for a lower market cap? And sure, 20% of idiots and 12.5% of fair coins might have made all the great decisions Nadella did, but as a board of directors, do you want to sample from coins or idiots or second-best CEOs when billions of dollars are at stake?

CamTin 8y ago
Well first, I'm not talking about pay necessarily, though executive compensation is (IMO) out of control. I was more referring to the intangible "respect" afforded to decision-makers (aka "leaders"). As far as pay goes, you can say they have a "big impact" all you want, but that's not how any other labor market works: it doesn't matter how much value my labor provides. Plumbers are paid the same to fix the toilet in the Louvre as they are at the gas station down the street from it. Leverage or no, my salary is determined by how little other, similarly skilled people are willing to take. If you can find somebody as skilled as Nadella in the technical skill of managing a software company, but for much less money, then you should either hire that other person or make Nadella take the lower salary. But again, I'm not talking about money. These corporations have shareholders, and the shareholders are free to overcompensate whichever of their employees they choose too, even the C-suite. My point is that we revere "leaders", our "history" classes (unless you actually study history at a univesity) are mainly hagiographies of past "leaders," and every societal norm tells us that "leadership" is this powerful, ineffable magic. It's not. There's no such thing. Some people are in charge. They might even be powerful. They might get incredible things done. That doesn't mean that people who could have gotten the same things done given the same power or leverage are scarce. Management is a technical speciality, probably one that's less difficult than, say, being a good welder. We pay good welders tons of money too. I'm not trying to say either is overpaid. I'm just trying to say "leadership" (i.e. directing the work of others, business strategy, and decision-making) is over-valued in terms of respect and esteem.