The title of this post paraphrases a quote from physicist Richard Feynman.
There are way too many people out there in business bullshitting to themselves, their staff and their customers.
The simple truth is that if you run your business like its amateur hour, no matter how much you want to fool yourself and your customers into thinking that you’re smart and good at what you do, eventually you will stumble and the truth will out.
Now I’ve worked with good CEOs, bad CEOs, lots of average CEOs, and I’ve been lucky enough to work with one great CEO in my career. He now runs one of the world’s largest companies.
The pig-headed arrogance of bad senior management is breathtaking in its ability to absolve themselves of blame, responsibility and accountability, all the while pointing to the shortfalls of others or factors outside their control as the root cause for whatever misfortune has befallen the company they run.
The sky is falling, the sky is falling
Recently, the great scapegoat for CEOs of underperforming companies has been the Global Financial Crisis / World Financial Crisis / Greatest Financial Crisis Since The Great Depression / The Sub-Prime Mortgage Meltdown or whatever else you want to call it.
It is the Great Global Excuse.
The theory goes that it’s the fault of the financial markets that CEOs went berserk spending the almost limitless credit their banks were throwing at them to acquire a variety of over-priced assets, which led to a corresponding impact on their gearing ratios and increased monthly repayment schedule, which had a corresponding suckhole effect on their revenues.
Now, at the throwaway interest rates that were being charged, short-sighted CEOs with a Business Degree, MBA or (God forbid) Economics Degree (or even worse, all three) and the common sense of a truck tyre would wake up in the morning, scratch their posteriors and decide to go on a rampant jihad of acquisition funded by bank credit managers with all the discipline of an alcoholic locked overnight in a bottle shop.
The CEO believes that he can do no wrong for he is the anointed one. The bank guys just want to make their CV look good so they can go and get a job at Mac Bank and retire rich beyond the dreams of avarice. This leaves the shareholders assuming the position following a lecture in banana-based economics — and here’s an opportunity for a great big shout out to Gail Kelly and the geniuses in Westpac’s marketing crew.
[By the way, has anyone found out how much that piece of sheer inspiration cost the shareholders of that pillar of Australian Banking? I would love to know…]
There’s one question I want to ask: “Since when does being a leader mean shoving all responsibility and accountability off to someone else only because the CEO cannot make a mistake by virtue of the fact that they are the CEO?”
Just going back to the title of this post for a moment. This quote is paraphrased from the report into the Space Shuttle Challenger Disaster that was restated for the investigation into the Columbia disaster. The thrust of the argument was that NASA was more concerned with the “pitch” rather than the “engineering”.
All show, no dough
I was recently offered a consulting job by a company that wanted me to look at their “out of control” ICT costs. The CEO and CFO were concerned that technology costs were too great a drain on their financial performance given that they were bleeding money from operational units due to the downturn. They wanted to cut back expenses until the economy turned around because the “improvement in trading conditions” would get the company “back on course”.
They were burdened with debt, having undertaken a number of acquisitions over the previous 18 months. Strangely, none of them were delivering anywhere near the results they claimed to be doing prior to acquisition. They also claimed their due diligence for these acquisitions was “world’s best practice”.
After having a look at the numbers and getting some other facts, I refused the job. Their ICT costs were about average, their operational units were burning cash like a dot-com and no amount of trimming in ICT would generate a material benefit for them in terms of cash burn. However, it would probably impact operations by going bargain basement on everything. Then I found out they were looking down the barrel of some tough questions from one of their investors about the performance of the company and their performance as managers.
They were more interested in the pitch to the investor than the engineering of the company. A couple of months later the investor decided he’d had enough and gave the CEO and CFO an ultimatum, they go, or he calls in his loans and, well, they go along with everyone else.
The CEO and CFO wanted to battle on to the bitter end, stay the course, see it through, finish the race… the investor, wisely, realised they were the root cause of the problem and dumped them like a bad habit.
The truth always catches up sooner or later.
The 1% Spend is written by a prominent Australian I.T. consultant who is choosing to remain anonymous (and candid).