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(Harvard Business Review)   CEOs more important than ever, says CEO producing school   (blogs.hbr.org) divider line 52
    More: Obvious, CEO  
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540 clicks; posted to Business » on 12 Mar 2014 at 5:39 PM (26 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-03-12 04:58:41 PM
In bad economic times a leader who knows that the fark they are doing is a good thing. This is news to someone?
 
2014-03-12 05:07:04 PM
Unless they started the company themselves, CEOs generally don't do dick.
 
2014-03-12 05:11:21 PM
The chart above shows an increase in the impact of CEOs on an average of three metrics: return on sales, return on assets, and market-to-book ratio.

Notably missing- employee population growth, employee pay growth, employee job satisfaction.

Of course, the corporate hierarchy apologists will tell us that those aren't really ways to measure the effectiveness of a CEO. Unless said CEO is lowering employee population and pay, in which case they are doing a helluva job.
 
2014-03-12 05:15:19 PM

Mugato: Unless they started the company themselves, CEOs generally don't do dick.


img837.imageshack.us
You're believing the lie
 
2014-03-12 05:15:57 PM
...and there's outsourcing and any other "things that look good this quarter but ultimately suck" decisions.
 
2014-03-12 05:19:03 PM
The paper was authored by researchers from UGA and Penn State. HBR is just reporting on it.

But neither that nor the actual research will stop the armchair Farxecutives reflexively calling B.S.

/HBS reject
 
2014-03-12 05:19:13 PM

The Stealth Hippopotamus: Mugato: Unless they started the company themselves, CEOs generally don't do dick.

[img837.imageshack.us image 622x373]
You're believing the lie


There are always exceptions to the rule.
 
2014-03-12 05:27:30 PM

Dinki: employee population growth


If you're adding stores and capturing larger shares of the market this is a given. Increasing productivity only goes so far.

Dinki: employee pay growth


I'm not sure if you can really judge a company by this. If you start off really really high there is no room for growth. Would you call Cisco Systems a bad company because they haven't experienced employee pay growth? Their San Jose campus is awesome! Free dry cleaning, hair cuts and day care! All on campus and all free so the employees never have to worry about it!

Dinki: employee job satisfaction.


You can judge it by employee retention, I think that is fair.
 
2014-03-12 05:43:59 PM
The farther removed we are from the past, the more things look inevitable. We think we understand the past, and the forces that make people tiny. My grandfather was a naval officer in WWII, and the way he remembered it, an Allied victory was anything but certain. That's not the way it looks today. Patton was more necessary then than he is now.
That is even more true when we talk about economics, which we really don't understand very well at all. We think we know what conditions in the 60s caused trouble in the 70s, but we're a lot less sure about what conditions in the 90s caused problems in the last decade. So people look bigger in the 00s than they do in the 60s, no matter how you measure them.
 
2014-03-12 06:43:50 PM

rumpelstiltskin: The farther removed we are from the past, the more things look inevitable. We think we understand the past, and the forces that make people tiny. My grandfather was a naval officer in WWII, and the way he remembered it, an Allied victory was anything but certain. That's not the way it looks today. Patton was more necessary then than he is now.
That is even more true when we talk about economics, which we really don't understand very well at all. We think we know what conditions in the 60s caused trouble in the 70s, but we're a lot less sure about what conditions in the 90s caused problems in the last decade. So people look bigger in the 00s than they do in the 60s, no matter how you measure them.


Everything is obvious and inevitable in retrospect.
 
2014-03-12 07:20:18 PM

The Stealth Hippopotamus: If you start off really really high there is no room for growth.


If your revenues grow, there's room for growth there.
 
2014-03-12 07:43:15 PM
In other words, the CEO of a company is a more significant predictor of that company's performance than at any time since the question has been measured, starting in the mid-twentieth century.

This smells like one of those "real but not real" Wall Street things. Company hires Bob CEO, whom Wall Street agrees is a great choice. Wall Street rates the company as a Strong Buy or whatever, the stock rises, Bob CEO is a hero.

I mean, CEO's can make a huge difference...Steve Jobs really did save Apple from being, say, Novell. But how often is this the case?
 
2014-03-12 07:55:42 PM

jayhawk88: In other words, the CEO of a company is a more significant predictor of that company's performance than at any time since the question has been measured, starting in the mid-twentieth century.

This smells like one of those "real but not real" Wall Street things. Company hires Bob CEO, whom Wall Street agrees is a great choice. Wall Street rates the company as a Strong Buy or whatever, the stock rises, Bob CEO is a hero.

I mean, CEO's can make a huge difference...Steve Jobs really did save Apple from being, say, Novell. But how often is this the case?


Yep. For every Steve Jobs there's a Leo Apotheker and yet that guy still got a shiat ton of money just to stop farking everything up. When a CEO can completely tank a company and still walk away with millions in severance, that's when there's a serious problem.
 
2014-03-12 08:15:35 PM
"Two Towns Over More Important Than Ever"

--people who expect money from two towns over
 
2014-03-12 08:20:36 PM

underwhere: jayhawk88: In other words, the CEO of a company is a more significant predictor of that company's performance than at any time since the question has been measured, starting in the mid-twentieth century.

This smells like one of those "real but not real" Wall Street things. Company hires Bob CEO, whom Wall Street agrees is a great choice. Wall Street rates the company as a Strong Buy or whatever, the stock rises, Bob CEO is a hero.

I mean, CEO's can make a huge difference...Steve Jobs really did save Apple from being, say, Novell. But how often is this the case?

Yep. For every Steve Jobs there's a Leo Apotheker and yet that guy still got a shiat ton of money just to stop farking everything up. When a CEO can completely tank a company and still walk away with millions in severance, that's when there's a serious problem.


It would be interesting to see the methodology used to determine this effect, but it's behind a pay wall.
 
2014-03-12 08:25:45 PM

The Stealth Hippopotamus: Mugato: Unless they started the company themselves, CEOs generally don't do dick.


You're believing the lie


no ceo is going to sleep with you.
 
2014-03-12 08:45:13 PM

underwhere: jayhawk88: In other words, the CEO of a company is a more significant predictor of that company's performance than at any time since the question has been measured, starting in the mid-twentieth century.

This smells like one of those "real but not real" Wall Street things. Company hires Bob CEO, whom Wall Street agrees is a great choice. Wall Street rates the company as a Strong Buy or whatever, the stock rises, Bob CEO is a hero.

I mean, CEO's can make a huge difference...Steve Jobs really did save Apple from being, say, Novell. But how often is this the case?

Yep. For every Steve Jobs there's a Leo Apotheker and yet that guy still got a shiat ton of money just to stop farking everything up. When a CEO can completely tank a company and still walk away with millions in severance, that's when there's a serious problem.


Steve Jobs is worth every cent in salary and stock Apple gave him. But for him, there are 25 who fail their way up the ladder to bigger companies.
 
2014-03-12 08:51:43 PM
I work at a small company that is changing paths to keep up with technology.  The CEO they hired has amazing contacts in the field we are in and has been very helpful.

That being said, CEOs like Bob Nardelli aren't worth the underwear they are wearing.
 
2014-03-12 08:56:28 PM

underwhere: Yep. For every Steve Jobs there's a Leo Apotheker and yet that guy still got a shiat ton of money just to stop farking everything up.


You mean just like the article says?

FTFA:   The more resources a CEO has at his or her disposal to invest, the more their decisions will tend to matter (for good or ill) - that fits broadly with the conclusions drawn in this new research paper.
 
2014-03-12 08:57:16 PM

WhyteRaven74: If your revenues grow, there's room for growth there.


With the exception of superstars - why would any company pay an employee any more than the going competitive rate?

/companies aren't there for the employees.  They are there for the shareholders.
 
2014-03-12 09:27:06 PM
These are the highest paying jobs in America, in a business where using cutthroat tactics to leapfrog one's own peers and superiors is ubiquitous. It boggles my mind that companies don't see themselves as having the bargaining power with the salaries of their executives.
 
2014-03-12 09:35:20 PM

gingerjet: why would any company pay an employee any more than the going competitive rate?


For the same reason those Wall Street bankers get huge amounts of money, even if they crash the world economy - you have to attract the top talent!
 
2014-03-12 10:06:35 PM

gingerjet: WhyteRaven74: If your revenues grow, there's room for growth there.

With the exception of superstars - why would any company pay an employee any more than the going competitive rate?

/companies aren't there for the employees.  They are there for the shareholders.


No shiat.  Yet the companies where the employees are the shareholders are among the most successful.  Funny how that works.  It's almost as though if you have something to gain you'll work for it.
 
2014-03-12 10:08:41 PM

Scythed: These are the highest paying jobs in America, in a business where using cutthroat tactics to leapfrog one's own peers and superiors is ubiquitous. It boggles my mind that companies don't see themselves as having the bargaining power with the salaries of their executives.


That's because executive compensation in publicly traded companies (and in many privately held ones too) is generally hashed out by the board of directors....and C-level folks tend to sit on each other's boards.  So if Frank McMoneybags is the CEO of Company A and also sits on the board of Company B, he can horse trade with his friend Jake Wealthman who runs Company B and sits on the board of Company A.

shiat like this is why The Old Boys Network actually matters.  It's not the Illuminati, it's frat bros all the way down.
 
2014-03-12 10:09:04 PM

TheGreatGazoo: I work at a small company that is changing paths to keep up with technology.  The CEO they hired has amazing contacts in the field we are in and has been very helpful.

That being said, CEOs like Bob Nardelli aren't worth the underwear they are wearing.


cdn.crooksandliars.com
 
2014-03-12 10:26:10 PM
I was hoping that it was a HBS report so I could snark that CEOs with a Harvard MBA consistently underperform the market.
/Shucky-darn.
//Here's an extreme case in point: He's driven every going enterprise he's ever touched into the ground.
 
2014-03-13 02:58:04 AM
Some CEOs can be complete saviors (see Jobs, Steve).

Some CEOs can be complete disasters (see Lampert, Eddie).


But those are extreme cases and are not indicative of most CEOs, who are mostly just middling yes-men for demanding shareholders and not terribly important to their company's fortunes or futures.
 
2014-03-13 06:08:10 AM

Bonzo_1116: Scythed: These are the highest paying jobs in America, in a business where using cutthroat tactics to leapfrog one's own peers and superiors is ubiquitous. It boggles my mind that companies don't see themselves as having the bargaining power with the salaries of their executives.

That's because executive compensation in publicly traded companies (and in many privately held ones too) is generally hashed out by the board of directors....and C-level folks tend to sit on each other's boards.  So if Frank McMoneybags is the CEO of Company A and also sits on the board of Company B, he can horse trade with his friend Jake Wealthman who runs Company B and sits on the board of Company A.

shiat like this is why The Old Boys Network actually matters.  It's not the Illuminati, it's frat bros all the way down.


Yep, this.
 
2014-03-13 06:11:12 AM

The Stealth Hippopotamus: Mugato: Unless they started the company themselves, CEOs generally don't do dick.

[img837.imageshack.us image 622x373]
You're believing the lie


In Chrysler's case, I'd add Sergio Marchionne to that as well.  He's done a hell of a job.

But for every Lee Iacocca, there's a hundred Steve Ballmers or -- mirroring the extreme good case of Steve Jobs -- Eddie Lamperts.
 
2014-03-13 10:14:06 AM

RickyWilliams'sBong: In Chrysler's case, I'd add Sergio Marchionne to that as well.  He's done a hell of a job.


I love his music.
 
2014-03-13 12:00:47 PM
STEMs and MDs should still make more than them; higher demand, lower supply, do a more critical job. Capitalism says your CEO should probably not make that much.
 
2014-03-13 01:43:32 PM

gingerjet: WhyteRaven74: If your revenues grow, there's room for growth there.

With the exception of superstars - why would any company pay an employee any more than the going competitive rate?

/companies aren't there for the employees.  They are there for the shareholders.


and of course, which one is creating the wealth again?  (aint the shareholders sitting on their ass)

nevermind the customers who actually PROVIDE the revenue.  It's no wonder we're in a recession with this line of thinking.  We're supposed to just obey and worship the 'job creators'.
 
2014-03-13 03:25:31 PM

Nemo's Brother: underwhere: jayhawk88: In other words, the CEO of a company is a more significant predictor of that company's performance than at any time since the question has been measured, starting in the mid-twentieth century.

This smells like one of those "real but not real" Wall Street things. Company hires Bob CEO, whom Wall Street agrees is a great choice. Wall Street rates the company as a Strong Buy or whatever, the stock rises, Bob CEO is a hero.

I mean, CEO's can make a huge difference...Steve Jobs really did save Apple from being, say, Novell. But how often is this the case?

Yep. For every Steve Jobs there's a Leo Apotheker and yet that guy still got a shiat ton of money just to stop farking everything up. When a CEO can completely tank a company and still walk away with millions in severance, that's when there's a serious problem.

Steve Jobs is worth every cent in salary and stock Apple gave him. But for him, there are 25 who fail their way up the ladder to bigger companies.


Steve Jobs didn't invent the Apple computer, that was Steve Wozniak. Steve Jobs didn't write iTunes, that was programmers at Apple. Steve Jobs didn't invent the iPod/iPhone/iPad that was engineers at Apple. Those employees at Apple should have been compensated more than Steve because they actually made/make Apple happen.
 
2014-03-13 03:28:13 PM

rwdavis: Steve Jobs didn't invent the Apple computer, that was Steve Wozniak. Steve Jobs didn't write iTunes, that was programmers at Apple. Steve Jobs didn't invent the iPod/iPhone/iPad that was engineers at Apple. Those employees at Apple should have been compensated more than Steve because they actually made/make Apple happen.


Without Steve Jobs some other business owner/leader would have made more money than the programmers and engineers. That is the way it works and it is the right way.
 
2014-03-13 03:45:57 PM

R.A.Danny: rwdavis: Steve Jobs didn't invent the Apple computer, that was Steve Wozniak. Steve Jobs didn't write iTunes, that was programmers at Apple. Steve Jobs didn't invent the iPod/iPhone/iPad that was engineers at Apple. Those employees at Apple should have been compensated more than Steve because they actually made/make Apple happen.

Without Steve Jobs some other business owner/leader would have made more money than the programmers and engineers. That is the way it works and it is the right way.


It does work that way, but that does not mean it is the write way. If you subscribe to capitalistic theory, computer engineers and software engineers are rarer than MBAs (low supply). Their demand is higher than C-levels, by at least an order of magnitude. Their job is more critical, if a CEO doesn't exist, stuff still gets done less efficiently, if the engineers don't exist, stuff doesn't get done. These three factors mean according to capitalism, the CEO of Apple should make less than the software engineers and computer engineers at Apple. That last factor means that engineers at Apple should make more than the CEO in a meritocracy. Jobs long ago made back his initial monetary investment in Apple, at the end they were just severely overpaying him for his labor.
 
2014-03-13 03:47:59 PM

rwdavis: R.A.Danny: rwdavis: Steve Jobs didn't invent the Apple computer, that was Steve Wozniak. Steve Jobs didn't write iTunes, that was programmers at Apple. Steve Jobs didn't invent the iPod/iPhone/iPad that was engineers at Apple. Those employees at Apple should have been compensated more than Steve because they actually made/make Apple happen.

Without Steve Jobs some other business owner/leader would have made more money than the programmers and engineers. That is the way it works and it is the right way.

It does work that way, but that does not mean it is the write right way. If you subscribe to capitalistic theory, computer engineers and software engineers are rarer than MBAs (low supply). Their demand is higher than C-levels, by at least an order of magnitude. Their job is more critical, if a CEO doesn't exist, stuff still gets done less efficiently, if the engineers don't exist, stuff doesn't get done. These three factors mean according to capitalism, the CEO of Apple should make less than the software engineers and computer engineers at Apple. That last factor means that engineers at Apple should make more than the CEO in a meritocracy. Jobs long ago made back his initial monetary investment in Apple, at the end they were just severely overpaying him for his labor.


FTFM
 
2014-03-13 03:53:27 PM

rwdavis: R.A.Danny: rwdavis: Steve Jobs didn't invent the Apple computer, that was Steve Wozniak. Steve Jobs didn't write iTunes, that was programmers at Apple. Steve Jobs didn't invent the iPod/iPhone/iPad that was engineers at Apple. Those employees at Apple should have been compensated more than Steve because they actually made/make Apple happen.

Without Steve Jobs some other business owner/leader would have made more money than the programmers and engineers. That is the way it works and it is the right way.

It does work that way, but that does not mean it is the write way. If you subscribe to capitalistic theory, computer engineers and software engineers are rarer than MBAs (low supply). Their demand is higher than C-levels, by at least an order of magnitude. Their job is more critical, if a CEO doesn't exist, stuff still gets done less efficiently, if the engineers don't exist, stuff doesn't get done. These three factors mean according to capitalism, the CEO of Apple should make less than the software engineers and computer engineers at Apple. That last factor means that engineers at Apple should make more than the CEO in a meritocracy. Jobs long ago made back his initial monetary investment in Apple, at the end they were just severely overpaying him for his labor.


Tell me where this works your way. Without leadership Apple is nothing. Engineers are great and all, but they are cogs in a machine, and someone needs to drive it.
 
2014-03-13 04:03:53 PM

rwdavis: Their job is more critical, if a CEO doesn't exist, stuff still gets done less efficiently, if the engineers don't exist, stuff doesn't get done. These three factors mean according to capitalism, the CEO of Apple should make less than the software engineers and computer engineers at Apple.


How old are you?
 
2014-03-13 04:05:06 PM

R.A.Danny: rwdavis: R.A.Danny: rwdavis: Steve Jobs didn't invent the Apple computer, that was Steve Wozniak. Steve Jobs didn't write iTunes, that was programmers at Apple. Steve Jobs didn't invent the iPod/iPhone/iPad that was engineers at Apple. Those employees at Apple should have been compensated more than Steve because they actually made/make Apple happen.

Without Steve Jobs some other business owner/leader would have made more money than the programmers and engineers. That is the way it works and it is the right way.

It does work that way, but that does not mean it is the write way. If you subscribe to capitalistic theory, computer engineers and software engineers are rarer than MBAs (low supply). Their demand is higher than C-levels, by at least an order of magnitude. Their job is more critical, if a CEO doesn't exist, stuff still gets done less efficiently, if the engineers don't exist, stuff doesn't get done. These three factors mean according to capitalism, the CEO of Apple should make less than the software engineers and computer engineers at Apple. That last factor means that engineers at Apple should make more than the CEO in a meritocracy. Jobs long ago made back his initial monetary investment in Apple, at the end they were just severely overpaying him for his labor.

Tell me where this works your way. Without leadership Apple is nothing. Engineers are great and all, but they are cogs in a machine, and someone needs to drive it.


Cooperatives, especially small ones, are the closest thing. CEOs are just another cog in the machine too, without leaders you have to resort to democracies, which actually work on a small scale. Apple is too big, it should long ago have been split apart into multiple companies. Its monopoly on iOS devices alone is a good enough reason for it to be split. In general doers > leaders, it takes a ridiculous overabundance in the supply of doers for leaders to be worth more,
 
2014-03-13 04:10:10 PM

rwdavis: Cooperatives, especially small ones, are the closest thing. CEOs are just another cog in the machine too, without leaders you have to resort to democracies, which actually work on a small scale. Apple is too big, it should long ago have been split apart into multiple companies. Its monopoly on iOS devices alone is a good enough reason for it to be split. In general doers > leaders, it takes a ridiculous overabundance in the supply of doers for leaders to be worth more,


You're in the wrong country. There are a tons of real communist countries to choose from out there, you know, worker's paradises. Pick one that will work for you and be well.
 
2014-03-13 04:16:30 PM

rwdavis: Its monopoly on iOS devices


wat
 
2014-03-13 04:18:41 PM

R.A.Danny: rwdavis: Cooperatives, especially small ones, are the closest thing. CEOs are just another cog in the machine too, without leaders you have to resort to democracies, which actually work on a small scale. Apple is too big, it should long ago have been split apart into multiple companies. Its monopoly on iOS devices alone is a good enough reason for it to be split. In general doers > leaders, it takes a ridiculous overabundance in the supply of doers for leaders to be worth more,

You're in the wrong country. There are a tons of real communist countries to choose from out there, you know, worker's paradises. Pick one that will work for you and be well.


Not once have a framed any of my arguments in communistic terms, I have only couched my arguments in capitalism. I am anti-corporatist which is by definition a pro-capitalist stance as corporatism is an anti-capitalist philosophy. Capitalism is mean and viscous to everyone. Cooperatives do not equate with communism.

Regardless, there are no communist countries in existence now or in the past. There may have been a few hippy townships that were communist but certainly no nations.
 
2014-03-13 04:18:55 PM

FishyFred: rwdavis: Its monopoly on iOS devices

wat


This is why many wild animals eat their young.
 
2014-03-13 04:25:01 PM

FishyFred: rwdavis: Its monopoly on iOS devices

wat


There are millions of iOS devices and only one supplier. That is a monopoly. True there is a larger smartphone market but that doesn't change the fact that iPhones are a distinct market.
 
2014-03-13 04:45:42 PM

rwdavis: There are millions of iOS devices and only one supplier. That is a monopoly.


i.imgur.com

I know what you think it means, sonny.
 
2014-03-13 04:49:29 PM

rwdavis: FishyFred: rwdavis: Its monopoly on iOS devices

wat

There are millions of iOS devices and only one supplier. That is a monopoly. True there is a larger smartphone market but that doesn't change the fact that iPhones are a distinct market.


That isn't a monopoly. You are neither smart nor are you entertaining. I hope you're really good looking or you'll be living in a cardboard box when you grow up.
 
2014-03-13 04:59:51 PM

R.A.Danny: rwdavis: FishyFred: rwdavis: Its monopoly on iOS devices

wat

There are millions of iOS devices and only one supplier. That is a monopoly. True there is a larger smartphone market but that doesn't change the fact that iPhones are a distinct market.

That isn't a monopoly.


Please do tell me what other phone I can run my iPhone apps on that isn't made by Apple? Oh there isn't any. That means there isn't competition in that market. Hence monopoly.

You are neither smart nor are you entertaining. I hope you're really good looking or you'll be living in a cardboard box when you grow up.

Ha. You severely underestimate my age and income.
 
2014-03-13 05:20:52 PM

rwdavis: Please do tell me what other phone I can run my iPhone apps on that isn't made by Apple? Oh there isn't any. That means there isn't competition in that market. Hence monopoly.



That isn't a monopoly. That is the use of proprietary software. If Apple were to fix prices on smartphones and smartphone apps because they were the only player then we could begin to talk monopoly, but since android actually has a larger share of the market there is neither validity nor common sense in your accusation.
 
2014-03-13 05:23:41 PM

rwdavis: Ha. You severely underestimate my age and income.


rwdavis right now:

i.imgur.com
 
2014-03-13 05:41:19 PM

R.A.Danny: rwdavis: Please do tell me what other phone I can run my iPhone apps on that isn't made by Apple? Oh there isn't any. That means there isn't competition in that market. Hence monopoly.


That isn't a monopoly. That is the use of proprietary software. If Apple were to fix prices on smartphones and smartphone apps because they were the only player then we could begin to talk monopoly, but since android actually has a larger share of the market there is neither validity nor common sense in your accusation.


The smartphone market is too large to not subdivide into further submarkets. Android is a different market and is more an oligopoly than a monopoly. Samsung et al also need to be broken apart to ease entry into that market.
 
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