On spotting the illusion of action: Identifying future bonehead execs.

Published 20071217 by Olivier Blanchard | E-mail this post

Found on Kottke:

How America Lost the War on Drugs, a history of the United States government's efforts to stop its citizens from using illegal substances, primarily crack, heroin, and methamphetamines. Quite long but worth the read.
"All told, the United States has spent an estimated $500 billion to fight drugs - with very little to show for it. Cocaine is now as cheap as it was when Escobar died and more heavily used. Methamphetamine, barely a presence in 1993, is now used by 1.5 million Americans and may be more addictive than crack. We have nearly 500,000 people behind bars for drug crimes - a twelvefold increase since 1980 - with no discernible effect on the drug traffic."
It's not that hard to see how things got off the rails here. Dealing with the supply of drugs is ineffective (it's too lucrative for people to stop selling and too easy to find countries which seek to profit from it) but provides the illusion of action while attacking the problem from the demand side, which appears to be more effective, comes with messy and complex social problems. What a waste. The bits about meth & the lobbying efforts by the pharmaceutical industry and the medical marijuana crackdowns are particularly maddening.

This kind of reminds me of some of the political solutions you sometimes find in failing companies with deep pockets - like hiring some high-priced Marketing "consultant" to rewrite the Mission Statement and the company tagline while pretending that the more money is spent on the project, the more likely it is to have positive impact on the company's bottom-line.

Logic: "We're spending almost $200K on this new tagline and mission statement! Of course we'll see some results!"

Don't even get me started.

By the way, you can replace the above amount as well as this new tagline with anything you want and end up with the same result:

"We're spending almost $--(A)-- on ---(B)---. Of course we'll see some results!"

I can hear the end-of-year review already: "So, Bob, tell us what you've accomplished these last twelve months."

"Well, Chuck, we've spent a quarter million dollars revamping our various corporate logos, and another two hundred thousand on updating our corporate tag-line. It took a little longer than expected due to budget restrictions and it tied up my staff more than we'd feared since we have fewer folks than I'd like to get this done properly, but we finally got it finished - on budget and on schedule. (Smile. Bow. Invite applause.) We are now looking at the next phase of our project which will involve hiring the country's biggest PR firm and hottest ad agency to develop new media, com and marketing plans for all of our divisions. What we need are new ideas. A fresh outlook. A truing-up of our path for the future. We're going to start from scratch and breathe new life into our brand(s). We're also looking at some prescriptive retasking of multiplatform assets in order to maximize our groups' potential aligned mutual self-interest blah blah blaehhhh..."

Translation: I figured out how to spend every cent in my budget on things that sound relevant and awe-inspiring... and need to ask for more money next year so I can pull the same crap again only better... at least until I get recruited by the next board o' suckas.

Whatever. Political solutions may sound great, and they certainly cost loads of money and involve plenty of people with cool titles and Fortune 50 companies on their resumes... but they always flop because they are nothing but a whole lot of hot air.

Like guys who hire in as SVP of this or that and can tell you who they've worked for (I was VP of XYZ at Disney, and then moved to Apple, where I managed their ABC business, and then spent six years at GE serving as Senior VP of Marketing in their (whatever) group, then hopped on over to Apple Computers where I headed their technical services division and then...) but couldn't tell you what they actually accomplished during their twenty-year career.

"What did you actually do, though? What did you change? What did you contribute? What did you build?"

"Um... I was Senior Vice President of Sales at..."

*Sigh*

"Illusion of action" is one of my biggest pet peeves when it comes to the business world. Or the world of politics, for that matter.

We all know someone in our professional sphere of influence who spends most of their day doing nothing but has become an expert in either looking busy or creating the illusion that they actually do something valuable. What we are talking about here is the same thing but on a much grander scale.

Business students, listen up: Just because someone is an SVP or CEO or COO of this or that doesn't mean they a) aren't lazy, b) aren't as dense as a bag of hammers, and c) lack any semblance of common sense and/or professionalism. Some people (many, in fact) really do get promoted to the fullest level of their incompetence and greed. Here's what I am talking about (from CNN Money, by way of the Brains on Fire blog):

"In August and September, as his company is racking up the largest quarterly loss in its 93-year history, Merrill Lynch CEO Stanley O'Neal squeezes in 20 rounds of golf, including three rounds on three different courses in a single day. In October, O'Neal announces his "retirement," walking away with a compensation package valued at $161.5 million."
"Just hours after US Airways comes up short in its $9.8 billion bid to acquire Delta, CEO Doug Parker is pulled over by police in Scottsdale, and arrested for drunken driving."
"In July, as Bear Stearns executives futilely attempt to prop up two hedge funds that ultimately collapse amid the subprime meltdown, CEO James Cayne spends ten of 21 workdays out of the office, playing golf and competing in a bridge tournament in Tennessee. According to The Wall Street Journal, his fellow bridge enthusiasts claim that Cayne sometimes smokes marijuana at the end of tournament sessions."
"John Griffin, CEO of a Livermore, Calif., startup, pockets about $750,000 of seed capital after lying to investors lured by the company's promise to develop a "dirt eater" to clean toxic soil. After reportedly spending the money on such necessities as a Ferrari, Super Bowl tickets, and steroids, Griffin is sentenced to 30 months in prison. The name of the startup: VaporTech."
'"I like Mackey's haircut. I think he looks cute." -- Whole Foods CEO John Mackey, posting under the screen name Rahodeb, on a Yahoo Finance stock forum. The Federal Trade Commission reveals that Mackey authored this and numerous other posts over an eight-year period, hyping his company and himself while trashing the competitor he hoped to acquire, Wild Oats. "
"HBO President Chris Albrecht allegedly punches and chokes his girlfriend while drunk at 3 A.M. in a Las Vegas parking lot. "
"In July, bankrupt Northwest Airlines begins laying off thousands of ground
workers, but not before issuing some of them a handy guide, "101 Ways to Save
Money." The advice includes dumpster diving ("Don't be shy about pulling
something you like out of the trash"), making your own baby food, shredding old
newspapers for use as cat litter, and taking walks in the woods as a low-cost
dating alternative."
"After Bank of America announces plans to outsource 100 tech support jobs from the San Francisco Bay Area to India, the American workers are told that they must train their own replacements in order to receive their severance payments."

I am not making this up. Here's more:

"In April, just nine months after a Business 2.0 cover story trumpets the wisdom of Raytheon CEO William Swanson and his folksy hit book, Swanson's Unwritten Rules of Management, a San Diego engineer makes a shocking discovery: 17 of Swanson's 33 rules are similar - and in some cases identical - to those in The Unwritten Rules of Engineering, a 1944 text by UCLA professor W.J. King. While conceding that he failed to give proper credit, Swanson insists he didn't intend to plagiarize, suggesting that old photocopied material may have wound up in his "scraps." By way of punishment, Raytheon's board freezes Swanson's salary at its 2005 level of $1.1 million and cuts his restricted stock grant by 20 percent."

"In April, while under investigation for allegedly establishing a slush fund to bribe public officials, Chung Mong-Koo, chairman of South Korea's Hyundai-Kia Motor Group, says "I am sorry" more than 30 times during a brief encounter with reporters. To make amends, Chung and son Chung Eui-Sun, president of Kia Motors, offer to donate $1 billion to charity. Spirit of giving notwithstanding, Chung Mong-Koo is jailed for two months and tried on charges of misappropriating hundreds of millions of dollars."

"Dodging investors angry over the pay received by Home Depot chairman and CEO Robert Nardelli, who took home at least $120 million over five years as the company's stock price dropped 12 percent, Home Depot's board fails to show up at its annual shareholders meeting. The session is presided over solely by Nardelli, who sidesteps all questions ("This is not the forum in which we would address your comment") and cuts the meeting short after half an hour. The event's negative fallout, highlighted by demonstrators wearing chicken costumes and orange Home Depot aprons, leads Nardelli to announce days later that, for next year's meeting, "we will return to our traditional format ... with the board of directors in attendance." Nardelli resigns in early January, walking away with another $210 million in severance."

"In the midst of corporate America's scandal du jour - the backdating of stock options to enrich company executives - the Wall Street Journal discovers that William McGuire, CEO of UnitedHealth Group, received options on dates coinciding with the company's lowest share prices of 1997, 1999, and 2000. After a company inquiry finds backdating to have been "likely" (the odds of this happening by chance are around 1 in 200 million), McGuire steps down and agrees to give up about $200 million in proceeds."

"In an effort to top UnitedHealth in the annals of backdating, executives at Comverse Technology are alleged not only to have backdated their own options but to have invented fake employees to receive grants as well. In a 35-count federal indictment, prosecutors claim that CEO Jacob Alexander used a slush fund under the name I.M. Fanton to make awards as he saw fit. Alexander flees the country but is taken into custody in Namibia after a six-week international manhunt."

"Not to be outdone by UnitedHealth and Comverse, cable-TV operator Cablevision Systems admits in a regulatory filing that it granted stock options to a corpse. The company awarded the rights to purchase thousands of shares to former vice chairman Marc Lustgarten, despite the fact that he died in 1999; the options included provisions that allowed them to pass to his estate."

"After leading videogame-console startup Gizmondo to nearly $400 million in losses and a bankruptcy filing, edgy entrepreneur Stefan Eriksson wrecks his $1 million Ferrari Enzo in a crash in Malibu in February.Eriksson tests above the blood-alcohol limit but tells police that he wasn't driving, and that the driver, "Dietrich," ran into the hills after the crash. It's soon discovered that Eriksson's wrecked Enzo is actually owned by a British bank, and two more cars he claims to own, another Enzo and a Mercedes McLaren, have been reported stolen in England. Eriksson pleads no contest to embezzlement and drunk driving charges and is sentenced to three years in jail."

"Former Wal-Mart vice chairman Thomas Coughlin - whose compensation from salary, bonuses, and stock grants totaled several million dollars per year - is discovered to have cooked up fraudulent expense invoices in a scam to siphon off $500,000 over the course of seven years. Coughlin, who reportedly told enabling subordinates that he was using the funds for a secret antiunion initiative, pleads guilty and is sentenced to more than two years of home confinement."
"Mike Smith, mayor of New Lenox, Ill., pays a $1,462 tab at a strip club with his official village credit card. By way of explanation, he says none of the other attendees had the means to pay the bill."

These are people who run some of the world's most prestigious Fortune 500 companies. Thank goodness for the good ones.

*sigh*

Beware the person who makes it a habit to create the illusion of action. Aside from the fact that this type of person is at best dead weight in your organization, they will also invariably drag it down at some point during their tenure. This could be a specialist on your team, a mid-level manager, a department director or a senior exec. Lazy is lazy. Greedy is greedy. Unprofessional is unprofessional.

Learn to recognize the signs of a company killer, and this is one less thing you'll have to worry about.

Have a great Wednesday, everyone. ;)

Labels: brand strategy, greed, management