We live in a superhero culture. Authority is rolled upwards in corporations and the government until there’s only one person at the top who can make definitive decisions. And then, in a fit of irrational idealism, we reward them for total failure. Except, of course, Apple.
One of the best run companies in America is USAA. It’s a financial services and insurance company that caters to military and retired military members. I think one of the reasons it’s so well run is because the executive management consists of former U.S. military officers, men and women. In the military, no matter what you think about the use of military force, strong principles of honor, responsibility, judgment, proper use of authority and self-discipline are intrinsic to the job.
I wish more CEOs in the tech industry had former military experience as successful, high-ranking officers. Military people know that you can delegate authority, but must retain personal responsibility.
The reason I feel that way is because there’s a strong tradition of service in the military. By that, I mean there is no authority and power without the recognition that the authority and power are granted for the service of those underneath — and those civilans served. In other words, authority is granted solely for the good of those tendered to, not the one granted the authority. I think that’s why USAA is such a well run company. The tradition is service.
When I look at corporate America, especially the high tech companies I write about all the time, I don’t see many notable examples of C-level executives being brought to a just resolution for their failure. People lower in the chain always take the fall because the top level people wrongly delegate responsibility but not authority. In the military, if you abuse the troops, use your power for self-gratification or personal gain, or, worst of all, lose a major battle (and survive), there will be appropriate investigation and a possible court martial. No general or admiral has been rewarded, at least by the military, with wealth beyond dreams for abject failure.
One High Tech CEO
Let’s look at Leo Apotheker. He totally mismanaged Hewlett Packard. He took the remnants of a prestigious computer company that Mark Hurd and Carly Fiorina left in shambles and proceeded to inflict further damage by torching the webOS, TouchPad and PC segments of the business. He betrayed the employees, the company tradition, and the stockholders. For this work, he will receive a total of US$25.4 million in compensation.
The problem with this kind of employment agreement is that CEOs develop a false sense of self. The wealth bestowed upon them makes them feel that they are superheros by virtue of their great compensation, and they rationalize that their failure was beyond their control.
When Steve Jobs left Apple in 1985, as countless histories retell, Mr. Jobs was in a fitful state of depression and feeling of failure. A long period of introspection followed, and he became stronger for it all. Without failure, there is no learning and changing of ways. Without failure, there is no introspection and self diagnosis. There is no feedback mechanism to evaluate future success.
Modern high tech CEOs drift from job to job, living in multi-million dollar houses, always believing that they are superheros, a gift to humankind. Some believe that the authority they are given is intended for their own benefit, rather than being able to lead the hardworking people of the company into prosperity. The carnage they leave behind is just part of the job description: you move around until you hit it big, or retire with the trappings of wealth and accomplishment.
Even though Mr. Jobs didn’t serve in the military, he has shown a fine-tuned sense of self, an ability to temper great authority with a rational estimation of how his behavior has led to success. That’s why he has taken a dollar a year in salary. It’s his public statement that his wealth shall be tied to Apple’s stock, the value of the company he founded, and not to a selfish plundering of the corporate coffers.
When boards of directors stop richly rewarding CEOs for driving their company in to failure, with Apple as a standard for success, American technology companies will be better off — and a better place to work.