It isn’t easy being the CEO, even – or maybe particularly – of a small company. After all, in a startup, unlike an F500, you have to have most or all of the skills it takes to both run – and operate – a company: fundraising, management abilities, sales, marketing, tech, accounting and finance, product design … The list is endless.
CEOs of big companies have their own share of issues, even while others are doing the above jobs, including company culture, communications with their many constituencies, running the board and managing their leads, keeping the palace revolts down to a roar, legal and securities issues, finance, sales, and avoiding PR disasters on social networks.
No one should sign up for the job if they don’t deeply want it, and no one should expect any pity, or even empathy, for taking it. It is its own unique honor, challenge, and reward.
Even so, CEOs are public figures, and need a thick skin to go with the job.
In this week’s issue, I’m going to take a look at the general quality of large-firm CEOs over the last few decades, and ask the rather tough question: How did the good do so well, and how did the others go so horribly wrong?
If we start from the position that the quality of CEOs has declined in the past decade – which I believe – what might be some specific causes that have contributed to this trend? Imagine, for instance, that today you were running a world-class telecoms equipment company and China’s Standing Committee decided to take over your market. Huawei shows up, puts a “research center” across the street to steal your IP, and runs at an annual loss while charging half price. You lose your customers, your earnings decline, and then you get fired. And the next guy gets fired. And the next woman, too.
In a world of IP rip-offs, product commoditization, and declining R&D budgets, yesterday’s CEOs would likely be equally challenged.
At the same time, the insane incomes proffered to CEOs are tightly wired to quarterly earnings, and often are paid in options rather than cash. If the stock goes up, you win; if it goes down, you’re fired. So you manage from day to day, you fire other people regularly, you forget that you have a home country, you lobby actively against your own company’s and country’s longer-term interests, and you start planning your ultimate retirement home in the Caribbean.
Now let’s get down to some real analyses. If we turned this week’s issue into a board game, we might have two lists: The Best CEOs and The Worst CEOs (past or current) of modern times.
Since we want to be a bit more merciful, we will instead suggest that each member reading this take out a piece of paper and make two CEO lists: Favorites and Other.
To set the tone, I’ll start with my own Top Ten Favorites list, with a few lines about why for each.
