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So they quit, and someone hungrier + lower on the ladder gets a chance to prove themselves by turning the company around, rewarded by staying in the position wh

So they quit, and someone hungrier + lower on the ladder gets a chance to prove themselves by turning the company around, rewarded by staying in the position when it's cushy again.

lend000 6y ago
>So they quit I doubt most of the executives see themselves as personally responsible for the financial situations of their companies, especially during an unprecedented global economic shutdown. Not because they are any different from you or me or any of these other self righteous commenters, but because they are the same. If American culture were more like ancient samurai culture, perhaps they could commit seppuku to restore their honor. But I would prefer to restore proper incentives instead, and weaken the power of chapter 11 so this isn't a problem in the first place.
- computerphage 6y ago
  It wasn't unprecedented.
  - sgt-serverless 6y ago
    the pandemic may not have been, but the scale to which businesses were shutdown was.
- texasbigdata 6y ago
  Look at the Bain 2020 annual “private equity” report. Back of the envelope math, at 10x purchase price and 7x leverage, 10 to 15% of revenue goes to debt coverage costs and a 5% revenue decline triggers the bank covenants and causes a technical default. It’s the executives fault that happened? Maybe it is, but the capital structure and the operating team are separate and distinct things. It’s also important to consider, if the bank debt can’t convert to equity via a ch11, then overall availability of capital will sharply decrease. Which in turn hurts every business around.
mostlyghostly 6y ago
That doesn't work in small organizations with no bench strength. The next person is line usually isn't qualified. It rarely works in large ones. Especially for an abrupt transition. An effective executive, particularly on the commercial side, is a living walking Rolodex of internal and external relationships which are immediately no longer working on behalf of the company. Worse, they may work against you. I've seen competitors come swoop up top sellers or sales leaders and have them strip mine the good accounts from the remaining customer base.
koheripbal 6y ago
So they quit and no one else wants the job, nor has the key knowledge of how those internal systems works. ....so the company needlessly dies.
- aspenmayer 6y ago
  Why is it needless? If the company can’t stay viable, doesn’t the company legitimately need to do something else, perhaps even stop existing entirely or in part? The lack of profits is the market telling the company and/or its employees to do something differently, or do something else. How is a free market supposed to work?

So they quit, and someone hungrier + lower on the ladder gets a chance to prove themselves by turning the company around, rewarded by staying in the position when it's cushy again.

lend000 6y ago

>So they quit I doubt most of the executives see themselves as personally responsible for the financial situations of their companies, especially during an unprecedented global economic shutdown. Not because they are any different from you or me or any of these other self righteous commenters, but because they are the same. If American culture were more like ancient samurai culture, perhaps they could commit seppuku to restore their honor. But I would prefer to restore proper incentives instead, and weaken the power of chapter 11 so this isn't a problem in the first place.

computerphage 6y ago
It wasn't unprecedented.
- sgt-serverless 6y ago
  the pandemic may not have been, but the scale to which businesses were shutdown was.
texasbigdata 6y ago
Look at the Bain 2020 annual “private equity” report. Back of the envelope math, at 10x purchase price and 7x leverage, 10 to 15% of revenue goes to debt coverage costs and a 5% revenue decline triggers the bank covenants and causes a technical default. It’s the executives fault that happened? Maybe it is, but the capital structure and the operating team are separate and distinct things. It’s also important to consider, if the bank debt can’t convert to equity via a ch11, then overall availability of capital will sharply decrease. Which in turn hurts every business around.

mostlyghostly 6y ago

That doesn't work in small organizations with no bench strength. The next person is line usually isn't qualified. It rarely works in large ones. Especially for an abrupt transition. An effective executive, particularly on the commercial side, is a living walking Rolodex of internal and external relationships which are immediately no longer working on behalf of the company. Worse, they may work against you. I've seen competitors come swoop up top sellers or sales leaders and have them strip mine the good accounts from the remaining customer base.

koheripbal 6y ago

So they quit and no one else wants the job, nor has the key knowledge of how those internal systems works. ....so the company needlessly dies.

aspenmayer 6y ago
Why is it needless? If the company can’t stay viable, doesn’t the company legitimately need to do something else, perhaps even stop existing entirely or in part? The lack of profits is the market telling the company and/or its employees to do something differently, or do something else. How is a free market supposed to work?