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Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let
by fdgsdfogijq 4y ago
Theres no accountability above a certain level. In a stable business (am excluding new innovations), proving or disproving the performance of an entire org, let alone company, is extremely difficult. Individual contributors are much easier to judge, and thus live lives of sub-ordinance. Their inputs and outputs can be easily mapped. The trick of working, and thus living a nice life, is to rise to a level of plausible deniability, which begins ~3/4 levels of management up.
In Big Tech, most high level management was just there first. They started when that business unit started, and have been there for 20 years. An old stable business unit promoting a low level go getter way up the chain is basically unheard of
- rogerkirkness 4y agoCEO is the easiest to measure, because you just pass through how the company as a whole is performing against it's goals.
- sokoloff 4y agoI'm not even sure it should be "against [its] goals", because the goals are chosen by the CEO. (Choose bad goals and accomplish them, and you're still a bad CEO.) It's just company performance, IMO.
- rogerkirkness 4y agoYes but company performance is based on financial outlooks. You say 'We will be this efficient with our assets and hit these revenue numbers' and then you do or do not.
- PaulHoule 4y agoThe CEO has the most opportunity to set the goals, make excuses, blame scapegoats and gaslight the board. Today OKRs have Narcissists running the asylum because they're always going to convince management that their glass is 70% full whereas yours is 30% empty.
- bluGill 4y agoCEOs need to be lookout ten years out. They have little control over this quarters numbers, or even this years. All they can do is changes that won't affect the bottom line for a while.
- rogerkirkness 4y agoThis is true in a phase three company that is in efficiency and future cashflow harvesting mode, but in practice you end up doing shorter term things too involving a crisis of people or execution.
- SkyPuncher 4y agoHow are goals set? How do goals account for macro economics? How do goals account for market constraints/problems? How do goals account for measuring against a theoretical "alternative" CEO that could have done better? It's much easier to be a bad CEO in a good market than it is to be a good CEO in a bad market.
- danaris 4y agoIf ExampleCorp has an objectively fantastic CEO, one who genuinely cares about the company and the well-being of all his employees, and actually understands something about how to make those better... ...and then he retires... how long would it take for you to be able to tell that his not-terrible-but-kinda-lousy replacement is actually not doing a good job? The first CEO set things up so that they'd run well; the leaders he put in place will be there for years; the deals he made will be good for a while (and all the new guy has to do is re-up them when he gets the chance). So for, say, 5-10 years, the new guy get slapped on the back and handed a fat bonus every year for Doing Such A Great Job CEOing...when he's barely doing anything. But then the situation starts to change. The companies they had deals with start to get bought out, or maybe they just stop existing. The good managers and other leaders the original CEO put in place start retiring or getting hired for bigger and better things. The new guy stops being able to coast. But obviously his leadership has been great this whole time, and he hasn't changed anything, so how could it possibly be his fault...? Our society and our industry are chronically unable to measure actual excellence, let alone reward it.
- candiddevmike 4y agoAnd as you rise, your pay increases along with other benefits (time off, "business lunches"/conferences/golfing with vendors, etc). The furthest you are from doing actual "grunt work", the better off you are it seems.
- hn_throwaway_99 4y agoWut? At higher level in an organization, there is a much greater chance that you will be fired for things that you really have little control over. Now, at the highest levels, the compensation usually matches this level of uncertainty, sometimes with golden parachutes as well, so if you are fired you're still sitting pretty. But, for me, I wouldn't define "a nice life" with having to deal with that much stress as having so many things outside of my control.
- Keegs 4y agoI think layoffs matter too. ICs may be fired more for performance reasons, but they disproportionately face uncertainty created by rounds of layoffs, uncertainty that isn’t compensated.
- fdgsdfogijq 4y agoI have worked at three large household names, two are in the top five market caps in the world. Logically what you say makes sense, I just havent seen it in reality.
- PaulHoule 4y agoI was part of a layoff affecting 100s of employees because of a boneheaded decision, corrupt project manager, etc. There was nothing at all I could do about it.
- pwinnski 4y agoIn theory, I agree with you. In practice, it is mind-bogglingly rare how often high-level executives are fired for any reason, whether their fault or not.
- ioblomov 4y agoDon’t want to be defending plutocrats, but consider how hard it is to be fired in general whatever the role. Honestly think it’s just par for the course.
- juve1996 4y agoHigher level executives typically have very strong networks built up. Even if they get fired, they're financially already well off and can easily find another role through their networks.
- quadcore 4y agoI like to believe Apple under Jobs was different.
- kranke155 4y agoIt clearly was. It was a high performing organisation with few peers in corporate history. Apple under Jobs was perhaps one of the biggest value creating organisations in our recent memory, if not the most value creating organisation in the last 20/30 years. So whatever he did, it worked brilliantly. The only analogue we have now is SpaceX imo. Tesla, if they crack self driving, maybe.
- skippyboxedhero 4y ago> It was a high performing organisation with few peers in corporate history Apart from the time he ran it into the ground. Musk isn't up there, Jobs isn't up there. You need a multi-decade record of strong capital allocation decisions, Musk barely has five years. Jobs had a record of making mistake after mistake for decades until the IPhone. Musk, by his own admission, made huge errors and would likely have gone bankrupt in 2017. Of those alive today: Buffett, Malone, and a handful of smaller-scale people (i.e. Leonard, Stiritz, and some firms with strong culture like 3G, potentially Costco). In most cases though, CEOs need to be saved from themselves. Tech CEOs are also some of the absolute worst...I can't think of any with very strong records (Leonard is one, but the scale is relatively small). You find far strong management teams, on average, outside tech (industrials is one area, you have quite a few companies that not only have good CEOs but very good succession). The incentives are just totally wrong in tech: you get rewarded for failing, so you end up with lots of incompetent CEOs (Pichai being one of the worst, Google generally is just a terrible shit-show).
- kennend3 4y agoYou have conveniently forgotten a serious part of apple's history so let me remind you. " Steve Jobs and Bill Gates’ rivalrous friendship is the stuff of tech lore. The most poignant moment of that fraught relationship happened 20 years ago. In August of 1997, Gates stepped in and saved Apple, which, at the time, was on the brink of bankruptcy. “Bill, thank you. The world’s a better place,” Jobs told Gates after the Microsoft exec agreed to make a $150 million investment in Apple. " So was it working brilliantly when it was 90 days from bankruptcy and was thrown a lifeline by Gates? Jobs was lucky with the iPhone...
- deleted 4y ago[deleted]
- lazide 4y agoBwahaha, I take it you’ve never actually been near anyone who has done that, let alone done it yourself? That’s total fantasy. If someone is really really good, it can look like they’re not doing much for anyone who doesn’t know what to look for, for the same reason a ships captain who is looking like they aren’t doing anything is usually a really really good one. The folks who directly interact with them often are well aware of this, but in a large org that may only be a couple percent of the organization. Because they set the right culture to get things done smoothly, they’ve hired and trained the right leaders to make sure the right decisions get made (and oversee them appropriately), they chart a course that produces the right outcomes without a lot of drama, they delegate what they need to, but not things they should not, have problems dealt with proactively before they cause major issues, etc. If you see a ships captain running around looking busy all the time, or even worse, dealing with major issues all the time, that’s a terrible captain. Same with a business unit leader. Paying attention to what needs to be paid attention to for all that to work correctly, and integrating that into the correct action is extremely difficult. Especially under stress, and with constant distractions, which that level in Tech has a huge amount of. It is very difficult to find someone who can do it, and they command a premium because of it. Hands on experience with the tech and people over a long period of time is a huge help, but just being around awhile is no guarantee of success. The filter is very harsh. Lack of someone who does it effectively, or if they lose their ability to be effective, gets really obvious really quick, and has major consequences for the organization.
- fdgsdfogijq 4y agoThis point of view isn't supported by org charts at large companies. If you were to compute the correlation between age of org and time in org of the business unit leader, you will get a very high number. It's high because people grow into the capabilities you are describing, just like someone grows into a Java developer. The opportunities to learn those skills are rare, and generally are never just handed out. Again this comes from experience at two FAANGs. Most high level business leaders started 20 years ago. You can present whatever type of logic you want, the data doesnt support the logic.
- 4y ago
- FredPret 4y agoI’d say this is false. Accountability becomes easier as you go up. For then owner, everything is on them. They’re the owner. They pick the CEO. They can lose their money. For the CEO, everything is on them as well, but the worst that can happen is they get sued or fired. They pick the people who are responsible for sales, costs, etc. Any failure in these areas is very simple to attribute to the executive in question because it all flows into their area of responsibility.
- fdgsdfogijq 4y agoA large company is like an oil tanker. Its never clear whether that oil tanker can be turned fast enough to avoid the ice berg. And thus, its never clear whether its the CEOs fault, or the circumstances. Too much complexity.
- FredPret 4y agoPerhaps. But the profit and loss accrues to the owners, no matter what. The buck stops there, fairly or unfairly. So the investor has to allocate capital wisely, and pick CEO's as best they can.
- skippyboxedhero 4y agoThe reason why is quite clear if you ask whether this would happen at a company that you owned 100%. The problem of a diverse shareholding base supervising a company has not been solved. If you are an unhappy shareholder, you don't push for change...you just sell and move on to the next one. Within tech, there is also a cultural issue because so many of these companies end up with VC-led boards or VC-selected managers who are, to be frank, quite terrible (that is the problem with 20 year management teams...the problems of a large company are different to those of a smaller one). Growth at any cost always ends badly. Interestingly, I think some of the companies that went through the late 90s ended up internalizing that...telecoms did, some of older chip companies, unf most companies will always end up learning this lesson too late.