Are we entering the age of the deposed super leaders?

November 20, 2022

Some years ago, business cases were largely examples of near super-human business giants, the inheritors of the great man theory of history. And of course it was mainly the great man, the builders of industrial empires. The great entrepreneurs who magicked wealth from growth, and growth from risk and daring.

But now, the stories are more often cautionary tales. The gods have feet of clay. The emperor has no clothes.

The Masters of the Universe, was a title of a typical book in the 1960s about great business leaders. When I checked with more recent titles, I discovered Masters of the Universe refers now to a computer game of fantasy figures. Although, perhaps that’s not so different from those earlier aspirational books.

I see a shift around the time of the last economic depression, in late naughties. The hero-executives were being brought low. We learned about the Enron case. The major banking crashes that wrecked Iceland’s economy (the country not the supermarket, which had struggled earlier).

In the U.K. the high rolling financiers toppled like ninepins. Fred Goodwin of Royal Bank of Scotland was hauled before a Government committee to accept blame for excessive style and actions. 

Hollywood followed up with graphic, and not totally fanciful accounts of the Wall Street carnivores, a modern kind of Greek tragedy. 

Flash Forward

In time, the world’s financial system recovered from the recession. 

Flash forward to the present day. A book arrives for review. It’s called Pulling the Plug. It relates ‘thespectacular collapse of General Electric’. Once upon a time, GE Made stuff America wanted: fridges, televisions, light bulbs, then wind turbines and submarine detection systems.

Its credit rating was on a par with government bonds for its $600bn assets.

The company began with the efforts of Thomas Edison, whose achievements remain unsullied, for his business acumen as much as his most famous invention the Edison light bulb, ushering in an industrial revolution, and the age of electric power. 

Enter Jack Welch

The next significant change in GE was a shift from making stuff to financing the purchase of stuff. The shift was driven by Jack Welch, an engineer by training, but who succeeded by political and financial skills.

Success involved a shift followed with from a manufacturing basis to one relying on financial arrangements. The buy now pay later schemes created a finance powerhouse.  Welch became hailed as a super-leader, a process not unassisted by his own image-building skills. 

In his glory days he revelled in the tough approach which earned him the soubriquet Neutron Jack, the explosive power which killed off people leaving buildings intact. The style included his beliefs in the benefits of firing the 10% lowest-performing staff each year, to encourage the others. 

He left with a multi-million payoff, and a reputation of a super manager, hailed by Fortune magazine as the manager of the century. 

Later, the consequences of his action were seen as a short-term efforts to maximise shareholder value. His financialization approach collapsed as the 2008 slump took hold. 

The meltdown with Immelt

His successor Jeff Immelt was unable to pull off a rescue, and the company fell into the clutches of an asset management investor still chasing shareholder value. Its future is unclear.

Business Giants of 2022

Our new generation of business giants has not been doing too well. Let’s take some recent examples:

Elizabeth Holmes jailed for a rather old possible fraud in modern guise. Her company created a business with a non-existent medical diagnostic process. Discovery of its status, turned the presumed unicorn (rare beast in the commercial jungle) into a Dodo.

Stock in Meta, the future vision of the creator of Facebook, Mark Zukerberg is  dropping like a stone. 

Then there is the cryptocurrency implosion. In a single week, another billionaire, Sam Bankman-Friend sees his financial empire and his reputation shattered.

And how about the eccentricities exhibited by Elon Musk, currently engaged in the latest bizarre news story over whether Trump should be allowed to join Musk’s new plaything Twitter.

Blame the financial crisis?

It is no coincidence that stories of rock and roll leaders and their companies crashing and burning, are more frequent during financial crises. Some might think the business titans might have contributed to the crisis…

The wisdom of hindsight suggests that the stock market stars turn out to be have rocketed up based on risky gambles which make them vulnerable in difficult times.

From heroes to zeroes?

Im not suggesting our business leaders are mostly inadequates hanging on the celebrity status. But what is surely the case is that hero-worship is for fantasy heroes. And sometimes fantasies are exposed for being just that.


Elon Musk’s scheme for Twitter hits the ground limping

November 2, 2022

Elon Musk continues his chaotic takeover of Twitter. He has finally clinched the on-off deal for Twitter with a deal quoted as an over-priced $44 billion. He is now proposing an extension of the site’s blue tick badge scheme for $8 a month. Millions of users are threatening to quit.

His actions  over the last few months have been that of an enormously wealthy vaccinating adolescent. At times he reflected market opinion that his object of desire was too expensive, and arguably mutton dressed up to look like lamb. 

Anyway the deal was eventually done. Mr Musk tweeted his delight, describing himself as the chief twit. His sense of humour is rarely far from the surface when he is appearing in public.

But it became clear he has grand plans for his new plaything, but no clear idea how to put them into practice. The plan is appropriately grandiose. Something about enhancing humankind by liberating voices in the global town square. His immediate actions were to fire the top team at Twitter, bring in his own firefighters, and start a discussion on Twitter on how to achieve results. First he has to make it pay.

We need to pay the bills somehow

He tweeted ‘we need to pay the bills somehow’ partly to clean up the site from an unknown number of bots and false accounts. This started a Twitter debate in which his original idea of $20 a head payment was eventually fixed at $8. Millions of users currently using the site for free were outraged. As you would expect, and no doubt Elon Musk expected. Undeterred he brought the debate to close.

“Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark is bullshit. Power to the people! Blue for $8/month,”

[That’s how this bad boy does business, folks

His initial target is expanding the current blue-tick badge scheme. At present, it protects public authorities as as Govt Departments from fake sites. It also caters for celebrity tweeters from politics, show biz, and the arts.Improvements to the scheme had already begun under Twitter’s earlier owners.

Doubts are being raised

Doubts are being raised beyond those of ‘furious peasants’ like myself who currently pay nothing. An examination by Verified Handles, a site dedicated to facts and carefully examined opinion, states:

Even to non-verified users this is a significant change from any verification schemes in the past. I’m familiar with smaller sites that use paid verification as a means to support development of the site. Twitter will need to change its revenue model as advertisers leave the platform. Musk has publicly stated he wants recurring paid customers to make up half of the company’s revenue.

Following an already turbulent few days, the platform will be taking a big risk that undeniably will cause impersonation, untrust and financial fraud on a scale never seen, followed by untrust and financial fraud before if the planned change goes ahead. This will cause more disruption than the 2020 account hijack, where 130 verified accounts were hacked and use to promote a bitcoin scam.

I am reminded of the nominated new word of the year for 2022 Permacrisis. A period of sustained turbulence and crisis.

The Elon Musk Show BBC2 Part1. How to show a girl a good rocket video

October 15, 2022

The BBC has granted Elon Musk a three one-hour mini-series on … Elon Musk. Without charging him for three hours of advertising. First learning point. You don’t become the richest man in the world without being a great marketeer. The title is a hint that we are to watch show biz in its treatment. We are not disappointed. 

The scene is set for a heroic tale of the childhood genius focussed on fulfilling his destiny to rescue civilisation by creating interplanetary travel for when the Earth becomes uninhabitable. 

First few minutes of the show confirm my earlier suspicions. This is one crazy dude. 

Mom, also appears as in a scene from the Munsters with a dash of Cruella de Ville. She is dressed as Queen Musk giving an address to her loyal subjects.  We learn of her grand plan which involved her searching for a mate  brighter even than she was. She quickly establishes that her plan works. She believes she produced has a genius. Recalls his mathematical aptitude, and his superhuman ability shown as a toddler to go without sleep to permit his all-night studying of astrophysics stints.

I was having trouble staying objective, rational about the show.

The young genius growing up shows social problems well  known among precocious infants. His early obsessions continue into his still precocious teens. Mom was right about one thing, the kid was super bright. He was to hit California where the time was right for ground-breaking ideas. Backers were willing to discount evidence of weird behaviours as perhaps a necessary component of the superstars.

His persuasiveness is that of the utterly self-assured visionary. This is one of the varied categories of the charismatic individual, the creator of cults. Brightness, self assurance (with or without concealed anxieties) and the extraordinary willingness to work 24 hour days and expect others to do the same. It may or may not be significant, that his grandfather founded a technology cult.

The programme has interviews with assorted family and work colleagues mostly suffering the chaotic distortion of the gravitational pull of the Musk supernova.

Most found the stress intolerable, several including at least one wife was brutally dismissed. One ex-partner found more positive things to say. Their courtship was a chaste one. ‘At our second date he asked could he put his hand on my knee. He asked my to go back to his rooms to lack at films about rockets. To my surprise that’s what we did’. 

His lifestyle, aided by his lack of need for sleep gave him the idea that was to turn into PayPal. But he found this too trivial to occupy his restless mind, already preoccupied with greater things. He starts the first of several financial coups each netting zillions of dollars up front.

By then his interest in creating an inter-planetary future for humanity has grown into an obsession, His plans are supported by $250 million he had pocketed from PayPal. 

He starts building and testing his space rocket. It blows up on take off. Naturally,  he identifies the junior engineer who is fired for the misfiring of the rocket.Fires said engineer.

In 2006 he invests in small electric car company. Tesla. Scrapes though teething problems, major faults for early buyers. Musk was appearing to work 24 hours a day. Twins and triplets impair his apparently 24 hour working days’.  Solves by a lightening divorce and a lightening remarriage. 

Second thought. This is one crazy guy. 

Meanwhile back to the rocket trials. Another failure. 

Undeterred, he tries a third time, knowing failure would mean ‘three strikes and you’re out’. Fails.

 The Tesla project is burning up money.  Customers start cancelling. Elon starts firing top team members in increasing numbers. The 2008 financial crisis was approaching. 

Me: things seem as bad as today’s global situation. Musk was as vulnerable as our new CEO Liz Truss seems to be as I write.

By much squeezing of available resources, he manages to get  a fourth flight off the ground just ahead of bankruptcy.

Success. It reaches its planned orbit. It had been corporate life or death. It turned out life.  NASA gives him a life saving contract. 

There are two more episodes. Overall, I learned a lot of background information. 

Maybe there is more to learn from watching another two hours of The Musk Show.