Now that Elon Musk has bought Twitter - now the Pit edition (Part 2)

The BBQ Pit
1802

CEO’s aren’t necessarily assholes. But what they are are people who focus on the needs of the business over everything else. They care about people who can execute their vision. If an employee is not on board, then that employee is out the door.

For instance, it’s like if you had a house cleaner. You’re the CEO of your house and you have an idea of how clean the house should be. The purpose of the cleaner is to make the house as clean as you want it. If the cleaner’s view of a clean house doesn’t align with yours, you’d fire the cleaner and find one who could deliver your vision of what a clean house should be. However, that doesn’t mean you have to be an asshole to the cleaner. You can still treat them with respect. But to take this further, some people don’t have the skill to fire the cleaner. They may feel anxious or guilty about firing them, so they just let the cleaner do whatever they want. Or they make up some excuse (e.g. “I can’t afford it”) to avoid confrontation. A CEO wouldn’t care about that kind of stuff. They would say “Clean it this way or you’re fired.”

Someone who also accomplished many breakthroughs as CEO is Steve Jobs. From many stories I’ve read, it seems like he was not fun to work for. He wasn’t necessarily an asshole, but he didn’t really care about how the employees actually felt. If he wanted the Mac bootup time to be quicker, he demanded the engineers find a way to make it boot quicker. If he wanted the colors on the phone screen to be more accurate, he scrapped the prototypes and had the engineers find a way to make the colors better. If he wanted the glass to be more scratch resistant, he delayed production and tasked the engineers to find better glass. If the engineers didn’t feel like doing all that extra work, oh well, too bad. Either get it done or find another job. And it’s not like Jobs was solving any of these problems himself. He just said “I don’t like this. Make it better”. He wasn’t actually down in in the lab with a soldiering iron patching motherboards to fix things.

I think Musk has that same kind of skill and ability like Jobs to force his vision to be executed. However, he is also a total narcissistic asshole in addition to having that skill. CEOs don’t have to be as big of an asshole as Musk, but it’s easy to see how they can be.

1803

Or they would attempt to remediate the cleaner’s work process (through various means, carrot or stick), and, failing that, either then fire them or move them to another part of the company where (they believe) the fit is better.

1804

Counterpoint to the last few points - Donald Trump

Sure, there are a class of CEOs who have a variety of skills and experience that can work well with the Board and shareholders or serve as the inspiration for their workforce.

But there’s more than a few whose qualifications are basically bunk. Trump’s initial qualification as CEO of his family company is “son of Fred”. He’s currently CEO of a large (by dollar value, anyway) social media company, for which his primary qualification is “being Donald Trump”.

It is inescapable Musk has qualities that have served him well and have usually served the interests of his shareholders. But it’s a hard sell to try to say he’s somehow uniquely well suited to those.

As with many people who get to lofty positions, it’s some combination of skill, training, experience, and some measure of luck - yes, some measure of luck, even for the Steve Jobs and Elon Musks of the world. But suggest luck is a factor at all and some people (including many posters here) seem to retract in horror at the idea that bootstraps (which aren’t free to begin with) are all that one needs to lift oneself up.

1805

I feel Christoph Waltz’s estimation on the necessity of luck is accurate in his case, and have a hard time believing that anyone else’s success doesn’t owe the same amount to luck.

1806

That’s not to say that one should not be ready to fully leverage any lucky breaks, and not everybody will have the talent, skill, etc to do that.

But it is true that a lot of people with those qualities won’t get that break for whatever reason. They won’t be failures, probably, but also won’t become billionaires. But our society makes pretend and creates just-so stories about why the few who do were somehow more uniquely suited for ludicrous levels of success than those who don’t. They’re our modern myths.

1807

I’ll just say this:
I’m not a CEO. I am at the executive level since about 6 years ago, and other than a mind-numbingly boring job, am quite satisfied with where I am at.

I think most of it was luck. Luck to graduate into greater Boston with a science degree just as biotech exploded. Luck to end up in an esoteric part of the field that underwent a renaissance, desperately needing people who take years to learn the business, and luck to befriend some people who could help me achieve new roles because they liked me.

1808

In some ways, it’s like being a successful actor. Luck is a huge factor in making it to the top, but that doesn’t mean that any lucky person can be an A-list actor. They still need to be able to act at that level. Even people who don’t need luck can’t always make it. Lots of kids of A-listers want to be actors, but few make it even though they are essentially starting at the top.

And it’s the same with corps. Lots of successful companies have gone out of business because the owner put their kid in charge after they retired, and the kid drive the company into the ground from mismanagement.

1809

An analogy I’ve used before is the final table at World Series of Poker Main Event. I don’t know if it’s still drawing 7000+ participants, but back in the day something like 15% of those entrants had career winnings of over $10K, and yet at the final table that same demographic usually made up at least 8 of the final 9.

Is that luck or skill? Well, it’s both. I recently told another former executive that my career was 90% luck, and he convinced me that for most successful careers (including mine) it’s more like 95%+.

1810

Fun fact: While the Court will be a spry 150 years old this April, it had only started its twitter account 10 years ago.

1811

Well, yeah, you have to be 13, so their mother is probably making them quit.

1812

“Whoops, I accidentally shut down the agency responsible for preventing an Ebola pandemic. Mondays, am I right?”

1813

‘Just because you can see blood coming out of their eyes, blood coming out of their wherevers doesn’t change the FACT that the Niger Virus is fake news’
~DJT

1814

Clever callback.

1815

I’m not sure Trump would use that number of gs.

1816

As if that would influence his pronunciation.

1817

I guess that’s why Boeing promoted and then fired Dennis Muilenburg, whose gross mismanagement of the 737 MAX program cost hundreds of people their lives and nearly sank Boeing. He was replaced by Boeing chairman Dave Calhoun, who was paid a freaking fortune despite significant performance shortfalls and mismanagement, and eventually left in disgrace. He had formerly been an executive at GE, where he also royally screwed things up.

Or how about Richard Fuld, who single-handedly tanked Lehman Brothers, an iconic investment bank that had been doing just fine for 158 years.

Or the genius of Enron, Ken Lay, about which nothing more need be said. Same with Stockton Rush, the infamous and now-deceased CEO of OceanGate.

Or Steve Ballmer, who was a complete nut and unfit to run a newspaper stand, never mind a huge software company. Microsoft continued to do well with him as CEO under its own huge momentum, despite Ballmer and not because of him. Ballmer’s “qualifications” were none of the bullshit you listed, but the fact that he was best buddies with Bill Gates.

And how about Rober Palmer, the last president of the iconic Digital Equipment Corporation, at one time the second-largest computer maker in the world, second only to IBM. The original president and co-founder, Ken Olsen, was forced out by the board when DEC endured record losses due to an antiquated technological vision that was quickly being obsolesced by new emerging technology based on open standards. Palmer recognized none of that, and was in the process of running the company into the ground when it was bought out by Compaq and eventually quietly disappeared.

And how about the management at Xerox, which in an unusual act of executive enlightenment established the Xerox Palo Alto Research Center (Xerox PARC) in 1970 in the hope that bright scientists and engineers would produce useful innovation. So what did PARC do? It invented the personal computer, the graphical user interface, the mouse, Ethernet and related LAN devices, the laser printer, and most of the other basic PC things we take for granted today. And what did the genius management at Xerox do with all this? Basically nothing. They looked at it like a pack of monkeys examining a shiny object.

It is in this spirit that we now come to your hero, Elmo, about whom I already wrote a lengthy post. I rest my case.

1818

I think you need to sit down and meditate on that question in light of what you wrote below:

If all of these amazingly detailed and scientifically determined skill matrices are worth a damn, why would a company just throw it all out and pick an unknown from another company?

Answer: Because all of the above is bullshit. People hire cronies they’ve worked with in the past. People hire their college buddies. People hire their friends. Or it’s somebody that the board of directors likes. At my company these connections are easily looked up on LinkedIn, but there’s no need for detective work, they outright state what their connections are, so we’re run these little tribes of executive nomads who drift from company to company hiring from their friend network. Half the people in the tech business have no allegiance to their employer, their primary allegiance is to these little wagon trains of directors, VPs, and CEOs. One goes, they bring the rest with them, lather, rinse, repeat. It’s not just one company, the same cliques keep popping up at every job I’ve had in the past 15 years.

That’s why they have these elaborate bullshit “talent frameworks”. It’s an HR fig leaf. Exactly as you said, if leadership publicly stated “we’re going to hire our friends and buddies, fuck you”, there would be mass discontent. So they contrive this elaborate farce of “talent frameworks” and “skills matrices” to make it easier for employees to eat shit. Fact is, if the company felt that any of that bullshit lived up to its purpose, they’d be using using their own talent framework to select their leaders, not just assuming that some other company is doing it better. They know their frameworks are bullshit because they were designed to be bullshit.

Maybe it works different in some more traditional companies that you mentioned, I don’t know. All I can tell you is that in the tech world everything is fraud, incest, and nepotism. All of it. That’s why the “visionary secret genius” is such a howling joke to those of us who have seen it up close and personal.

1819

Getting back to people too stupid to figure out why planes don’t always fly in a straight line: I found out that the genius who originally asked the question is the founder and CEO of a global shipping logistics company. In other words, knowing how transportation works is his job.

Tell me again how CEOs are geniuses.

1820

I think to some extent those things exist everywhere, but in this dot-com world there are several ways that the tech industry is unique. Here, more than anywhere else, companies have been started by kids and some have grown very rapidly to be multi-billion-dollar companies, still headed up by those same kids. Which brings me to the following point.

How many companies have been started by someone inventing a machine or gadget of some sort, or even just a company based on a single idea, and shepherded that company into becoming a major corporation, and remained the CEO of this billion-dollar behemoth? The examples are endless – from Henry Ford to Bill Gates, Zuckerberg, Bezos, Michael Dell, Larry Ellison, Ken Olsen … the list just goes on and on. It’s practically the fable of capitalism itself, especially in America.

So my question is this. If the skills of a CEO are so awesomely rare and extraordinary that they deserve to pull in tens of millions per year, then how come all these guys who founded small startups were still able to successfully manage them when they became giant corporations? Some incredible coincidence? And how come so many of the CEOs in my example above, brought in from the outside and paid tens of millions for their “talents”, either ran the companies into the ground or very nearly so?

I grant you that there are exceptions. Louis Gerstner literally saved IBM, and he came there from Nabisco and American Express, neither of which were computer or software companies. But that story is so famous precisely because stories like that are so rare. Gerstner was a manager of unparalleled stature and ability. Many of these doofuses with CEO titles and multi-million dollar salaries couldn’t manage their way out of a paper bag. Their only actual expertise is that they’ve mastered biz-speak.

1821

Do you think I am unaware those people existed? Do you think I walk around the world blissfully thinking that every single CEO in existence has delivered steady 10% YoY growth and no company has ever gone bankrupt?

These are the “worst players in the NBA” I mentioned earlier. It’s so easy to look at their results and be like, surely I could do better, and the answer is just a flat out no. You can’t scarcely imagine it but you would be 1000x worse than all of those people to such an amazing extent. Again, if anyone made this claim in any other arena of skill, the community consensus would heap ridicule and scorn on that person for how out of touch they are. But within a broad swathe of intellectualism, there is a genuine belief that the job of CEO is “easy” and people are bad at the job because of “corruption” or “schmoozing” and a deep incuriosity to understand how things actually work.

Again, I want to point to the specific claim I’m refuting here which is that it’s “unknowable” whether any of us could have built Tesla or SpaceX. It’s not, it’s as knowable as the results of throwing a random person in the cockpit of an airliner or asking them to write a scientific paper. I’m not saying anything about whether the pay we give to CEOs is justified (I don’t think it is), I’m not saying anything about their morals (I think capitalism deeply corrupts many CEOs through their process of getting the role), I’m simply asking people to recognize there are straightforward skills involved, a lot of them and people who have not practised them are going to be way worse at a thing that people who have had a lot of practice at a thing.