CEO Shadow Program (opens in new tab)

I suspect this is the case when there are competent people at other levels in the org. It seems like the rest of the company is often aware when leadership is bad and each push back against poor decisions in their own little way to try and keep their parts of the business running smoothly.

One exec in particular:

- Made power grabs for other execs' areas, forcing those execs out to other organisations.

- Continually shifted goal posts for key technical staff. In the words of one of these people, this was the primary cause of their mental breakdown.

- Filled positions with his own cohort of sycophants and yes-men from previous organisations.

- Defunded major projects, turning them from promising potential businesses into graveyards.

After just a couple of years, the organisation was a shell of its former self.

In my experience the CEO does three things uniquely that other roles don't:

1. They are the ultimate authority in tradeoffs between internal interests; 2. they are the interface between ownership and the company; and 3. they are the driver of strategic change.

When the whole company is aligned and rolling downhill with product-market fit around a single offering, those functions aren't as necessary. It just works. When you start branching out, you need a final referee that can determine the exchange rate between the desires of internal kingdoms.

But it's the second and third functions that IMO drive the executive compensation bubble. Our economy is kind of hourglass-shaped, with an economy of wealthy asset owners barely joined to an economy of consumers. The thing that is supposed to tie everything together is that the value of the assets owned in one of the bulbs is tied to DCFs of the money circulating in the other bulb. The CEO is at the narrow opening between the bulbs, mediating between the investors in the equity-class-relationships economy and the actual operating business in the actual-humans-buying-things economy.

There has always been a "strategic" layer that insists upon its own inevitability, the BCG/Bain mindset that says that things can't just run on autopilot and someone needs to be looking Towards The Future. For any given company there's going to be someone out there who has an investment thesis for how that company could make more money with some changes, using whatever that decade's version of the Cash Cows/Dogs/Stars matrix is.

What's different (IMO) is the massive amount of inflation we had only amongst the asset owners, that hasn't until recently been matched by inflation in consumer sectors. Valuations have gone up simply because there is so much money to invest, and investors have been given basically two options: keep your money in cash because equity is over-valued, or believe someone with a thesis of how a company with a NPV of $300M can actually be worth $1B with a few changes. The CEO's job is to prevent the uninflated DCF from fully decoupling from the inflated company valuation.

So we get all sorts of businesses that are doing fine for what they are, but not doing fine enough to justify their new valuation. At a macro level it's driven by QE2 and other Fed schemes, but for this one particular company it's an intriguing and reasonable idea. Now the investors put the CEO to work implementing the thesis that will will justify the valuation premium. I think that's the driver behind a lot of the exec comp and the flailing about.

It's gotta be 50% of every job. Heck, even on open source projects, you need to be lucid and explain what you are doing.

Look no further than for example, the ANTS project, which has done some very cool work in the plan9 space but hasn't always gotten a good reception due to the author being somewhere between Terry A. Davis and a normal programmer. And it's in the communication that's key.

Many CEOs are, of course, very well compensated. But, whether or not you think it's extraordinarily difficult, it's certainly very demanding in terms of time and schedule.

Can you share a link?

But each of the C Suite members can't spend all their time staying up-to-date and coordinated on everything each other is doing, and they'll also often disagree.

So you need somebody to manage the C Suite, understand and integrate and make decisions... and that's the CEO.

At the end of the day, somebody has to be in charge, or else it's either a) anarchy or b) incredibly inefficient as too much time is taken up in NxN communication and lengthy group debating and decision-making.

And somebody who's capable of managing every C Suite member effectively, whose areas span the entire company... that's going to be an inherently fiendishly difficult and complex job.

Large companies can accomplish things that smaller companies cannot but keeping the ship reasonably on course is a really hard organizational problem. When I was an analyst and spent a fair bit of time with senior execs at tech companies, I often saw how much fragmentation and lack of coordination there was among different groups. But my wonder wasn't that this existed but that the companies were able to function at all.

"The New York Times business columnist James B. Stewart wrote in 2017, “Hardly anyone considers Mr. Welch a management role model anymore, and the conglomerate model he championed at G.E. — that with strict discipline, you could successfully manage any business as long as your market share was first or second — has been thoroughly discredited, at least in the United States.”

The financial crisis of 2008 delivered a blow to G.E.’s fortunes. In the years before the crisis, the company had built sprawling lending operations that helped drive its growth. But the finance businesses became a crippling liability when, during the crisis, credit markets froze and borrowers struggled to pay back their loans.

G.E., like many large banks, tapped emergency government loans to help it get through the upheaval. In the years following the crisis, G.E. sold off most of its lending businesses, but other problems emerged, some of which were in its large power unit.

G.E.’s stock price now trades roughly 80 percent below the high it hit in 2000. The company has significantly lower revenue than it did that year. Last year, G.E. reported a loss of $5.4 billion."

See https://www.nytimes.com/2020/03/02/business/jack-welch-died....

From my perspective, the real value of the lunches was strictly building rapport across the company. At some places high level employees (doesn't necessarily have to be management) often feel unapproachable and they feel more abstract concepts than people. Having lunch with them re-enforces they are also people, people you may even get along with.

Other companies I've been at only do Q&A sessions with large groups of employees, and this is still useful, but the format doesn't help the culture. The answers you get are often the company line, and you cannot dig deeper. The people answering the questions are still abstract identities that appear to tout that company line, with no real personality.

In terms of the actually forming a business product market fit, they definitely have.

However, they're seen as a cut price second supplier to GitHub Enterprise + Atlassian. Not an ideal situation.

In terms of "maybe we should become more user friendly instead of going all in on enterprise features," not so much. And that's important.

Ultimately, product market fit isn't lawfully protected intellectual property.

The CEO and his favorite executives and VPs salesmen live inside their own little bubble with little real knowledge of the problems and challenges that the company is facing internally.

This is why I made good money.

It is easy to see this when management sends out decrees on how to improve performance or throughput .. etc that does not contain any mention of, nor solutions to the problems that is keeping the performance / throughput /(or whatever fitting metrics are for the company)

I might have a bias in that I have mostly worked with companies that hired us to help them. It is possible that the pool I have been exposed to is different than the majority but I do not think so.

I know of companies that are run in a more sane way but they are usually smaller, at least in number of employees and thus leadership is more aware of how things work.

This is broken or non-existent at many companies.