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Adam Neuman the eccentric CEO of WeWork presided over the bankruptcy of a company that was one worth almost forty-seven BILLION dollars [$47,000,000,000]. He was kicked out of the crumbling company he founded, but not before making one point seven billion dollars [$1,700,000,000] from a company that never figured out how to make even a single penny in profit. Dennis Muilenburg the disgraced former CEO of Boeing was fired from his position after his mishandling of the 737 Maxx disaster that led to the deaths of three hundred and forty six [346] people.
He walked away with a sixty-two million dollar exit package and he is now the CEO of a new aerospace investment company. Why does it seem like no matter how badly top executives fuck up, they can only fail upwards? If it seems to you like once you get to a certain level in the corporate world it’s almost impossible to fall back down, you would be kind of right.
There are endless stories about CEO’s that have bankrupted their companies only to be paid millions of dollars as an exit package before any of that money gets to investors, lenders, or even regular workers. The reason this happens so often is because it’s DESIGNED to happen and there are three reasons why even after these failures, most senior executives only seem to fail upwards.
The first reason is corporate Americas dangerous obsession with experience. You all know about companies demanding three years’ experience for an entry level job, or ten years' experience coding in a language that has only existed for five years.
But experience is an important metric to gauge someone’s ability to perform their job effectively. If you have been working as a welder for 30 years you are probably going to weld faster and cleaner than an apprentice with a few months on the job.
The same goes for everybody all the way up the corporate chain, but not by as much. The only way to gain experience as a welder is to BE a welder, likewise the only way to gain experience as a CEO is to BE a CEO, but nobody is giving out those jobs.
A report by the Harvard business review surveyed C-Suite executives and hiring boards and found that their individual technical skills had become a lot less important than business acumen and soft leadership skills. These are NOT skills that normal people can acquire by climbing the corporate ladder the old-fashioned way which is why more C-Suite Executives in Fortune 500 companies than ever came from backgrounds like private equity, investment banking or corporate consulting.
A survey by the workplace intelligence company Ondeck compiled a list of CEOs of Americas largest companies and found that most of them worked for management consulting firms before becoming CEO’s and very few worked their way up within a firm. 7.1% of CEOs in the report had worked at McKinsey and Company before securing a position as a CEO in another company, Bain, BCG Kearney and Oliver Wyman (all management consulting firms) took out second, third fourth and fifth place.
When CEOs are been selected from such a small pool of people that all know each other then even if they fuck up royally, they are still placed above most other candidates. It doesn’t make it any better when one of the most common tasks that management consulting firms get hired to consult on, is who should be a new CEO. A team of McKinsey consultants picking an ex-McKinsey consultant to be the CEO of a company that hires McKinsey consultants happens all the time.
This would be ok IF these McKinsey clones made for the best CEO’s, after all a job should go to the most qualified candidate, but a study conducted by the Harvard business review found the opposite.
So it’s time to learn how Money Works to find out why workers beyond a certain level only every fail up.
30 янв 2024
