For pretty much my entire career, CEOs have been almost invulnerable. Even when Steve Jobs, Apple’s founder and lead spokesperson, tried to get then-CEO John Scully fired from Apple, he lost and got fired himself.
I’ve watched CEOs at companies with zero-tolerance employee dating policies have affairs with subordinates and get a pass. (At Intel this was so bad it seemed like an unofficial CEO perk.) Even though Jobs went behind his board’s back to issue himself stock options, he survived that during his term as CEO.
Holy crap — have things changed. Almost every week, another CEO bites the dust for misbehavior. Last week it was brand new Texas Instruments CEO Brian Crutcher. The week before it was Papa John’s CEO John Shnatter (which I think was an obvious coup).
Other than the U.S.president, the CEO who is acting out the most right now and still has his job is Elon Musk. (Without any proof, he accused one of the heroic divers who carried out the Thai cave rescue of being a pedophile.) That leads me to wonder whether Musk is next.
I’ll share some thoughts on that possibility and close with my product of the week: the Fitbit Versa, which appears to be the best fitness smartwatch in market. It’s closer to Steve Jobs’ Apple ideal than the Apple Watch is.
The CEO Termination Feeding Frenzy
I’ve long expected the market to turn on CEOs and put them on the endangered list for employees, largely because their compensation has become unreasonably large. It really looks irresponsible, if not negligent, for boards to pay some of these folks — particularly those running companies that can’t seem to spell profit — massive amounts of money.
Instead of being humble about it, many of these folks seem to want to rub their employees’ noses in this fact. I was particularly taken aback by Brian Krzanich, Intel’s now ex-CEO. While announcing a layoff, he argued that he needed to be paid millions more because he was underpaid. It was the modern equivalent of the Marie Antoinette “let them eat cake” event. Given that she was beheaded, I expected his term to end badly — and it did.
Lately CEOs have been dropping like flies even though it’s often not known why the guys — and yes, they are mostly men — have been fired. The implication is that most of them were behaving badly in connection with some female employee. However, as with any feeding frenzy, you are likely to see some CEOs who likely shouldn’t have been fired get caught in the melee.
John Schnatter may have been someone who just got picked up in passing and he’s pissed. Yes, he used the “n-word,” but in context it wasn’t a racist statement. It was just one he should have avoided.
Yes, he shouldn’t have said it, but given that he was on record as having avoided using a celebrity because that celebrity used the word, Schnatter shouldn’t have lost his job. This one looks like his board just wanted him out. They may find that messing with rich people who own a huge chunk of the company whose board they serve on could end badly.
Musk Behaving Badly
I’m a fan of Elon Musk because he does some incredibly cool things. However, half the time I think he just likes to run with scissors because his life must not be interesting enough. The author of Brotopia identified him as having gone to one of the now infamous Silicon Valley sex parties — in costume, no less — and his excuse was that he didn’t see the blatant sex at the sex party.
Then there was the flame thrower thing. His company (Tesla) is in the most flammable state in the union but he apparently decided it would be a fun idea to sell flame throwers.
Then there was the Tesla autopilot fiasco. Even Consumer Reports argued that when people that see the term “autopilot,” they think they can turn the feature on and then do whatever they want, without having to drive the car.
There is an old story about a guy who rented a motorhome and asked about cruise control, and the rental rep told him it was like autopilot. He later drove off, set cruise control, and went to the back of the motorhome to make coffee. It didn’t end well for him or the motorhome. That incident alone suggests that the one thing you never should call even advanced cruise control (which is what the Tesla currently has) is “autopilot.” In my opinion, Musk should be held accountable for every death and injury to folks who treated Tesla Autopilot like it was autopilot.
Then there was Musk’s now famous conversation with financial analysts on a conference call. They asked legitimate questions, and he went off the rails on them, causing a sharp drop in Tesla valuation. That’s just stupid.
Most recently, he flew a small submersible to the location where 12 Thai soccer players were trapped in a cave. It did look like a poorly-thought-through PR stunt, and the lead diver, who clearly was focused on getting the kids out, didn’t want to mess with an untested piece of tech. Not that it was a bad idea, but you’d consider the device a proof of concept — not something you’d risk a child’s life on unless you had no other choice. That wasn’t the case.
Apparently, Musk didn’t like being told no. When he pushed, the diver apparently told Musk he could put the sub in an uncomfortable place in Musk’s body. Musk’s response was to go on social media and accuse the diver of being a pedophile. That is not a term that is interchangeable with “jerk.” It has consequences, and social media is an international platform. Were I Unsworth, the diver Musk attacked, I would sue Musk in France, where they are really aggressive when it comes to penalizing false claims like this.
Musk manages on the ragged edge, which means that from a financial standpoint, his companies are mostly one mistake away from going under. Tesla, in particular, doesn’t look like it will survive the decade. That suggests that rather than creating all of this drama, maybe focusing on the basics of running the firms would be in Musk’s and his companies’ best interests.
Wrapping Up: We Have a Board Problem
When Brian Krzanich got fired, I pointed out that the likely reason he had been put into the role — one that he obviously would not succeed in — was that Intel’s board was badly formed. I clearly was not the first to come to that relatively easy conclusion.
The recent list of CEO firings indicates that boards have not been husbanding their companies well. They have been selecting CEOs who shouldn’t have the job, or they’ve been scapegoating CEOs for problems that encompass the entire board.
One of the problems with a hot market is that the people running the firms seem to get the impression they can do no wrong, and the increase in personal wealth causes them to take their eyes off the ball.
In addition, many start to think they are above the law, and they drift to bad management practices and horrid governance. If this doesn’t get fixed, I expect not only that the next market correction might be unusually painful, but also that a scary number of industries effectively will move out of the U.S.
So, while I increasingly expect that Elon Musk will lose his CEO jobs — much like Uber’s CEO and founder lost his leadership role at Uber — I also think the heart of the problem may be with Musk’s boards — and just getting Musk to move on won’t save his firms. Given how big a footprint Musk has on the future of the U.S., you might argue he is too big to fail. Yet if something isn’t done to refocus him on his businesses, his failure is unavoidable.
I was one of the first users of the old Fitbit, and a year or so ago I swapped my Fitbit for a Huawei smartwatch that sort of sucked as it aged. It was a good watch, but its connectivity left a lot to be desired.
I recently switched back to Fitbit with its latest Versa product, which my wife gave me for an anniversary present. In my opinion, it is closer to the old iPod standard that Steve Jobs set than the Apple watch — something I think even Apple has forgotten.
What made the iPod so successful wasn’t how much it did, but how well it did the few things it did. The Apple Watch has a ton of functionality, and it has matured well, but it is a complex little beast.
The Fitbit, in contrast, is very focused on exercise, has one of the most accurate step counters in market, and doesn’t require a PhD in Apple products to use. It also works with both iOS and Android phones, much like the iPod eventually worked with both Apple and Windows PCs.
Unlike most smartwatches, which struggle to have enough battery for a full day, the Versa can last the better part of a week and can recharge fully in a relatively short period of time (like while you are getting ready in the morning).
It is relatively small and light, compared to other products, and it looks a bit like the Apple Watch (I’d actually prefer it looked more like a watch than an iPod mini on your wrist, but Apple was clearly the design target for this thing). At around US$200, this is also one of the more reasonably priced full-featured products, and given that it got me back on the Fitbit platform, it is my product of the week.