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.

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Richard Branson offers staff autonomy over vacation times and duration. Simples?

October 3, 2014


Richard Branson has announced a revolutionary self-managed policy for his personal staff. At first sight it seems a step towards the idealistic dream of worker autonomy and self-managed work groups. So let’s look a little more closely at the emerging story

This week [september 24th, 2014], Richard Branson was reported as announcing a new policy for his 170 personal staff. They are to have full rights to setting vacations [‘holidays’ or ‘leave periods’ in British vernacular].

Empowerment

‘Empowerment’ of workers has been a theme in OB courses and popular leadership writing for a few decades. This seems to be a further example, with the added weight provided by the authority of Richard Branson.

The basic principle is easy to grasp. The notion has libertarian and emancipatory aspects to it. So what’s not to like about it? And why have such initiatives been the target of Critical Theorists who have tended to dismiss it as a managerial fad?

Behind the headlines

Branson hopes the plan will be rolled out to subsidiary divisions. He has been reported as being influenced by his daughter who told him of a similar scheme at Netflix. The back story begins to take shape.

As one admiring report put it, Billionaire Richard Branson may be the coolest boss ever.

Two ‘maps’ of the story

One perspective is to interpret the story as an example of subtle exercise of power masquerading as enlightened leadership. The scheme is at present on offer to the 170 personal staff of Richard Branson. In his own words, the workers have obligations to act in the corporate interest so as not to damage the company or theirs own careers. The benevolence conceals the power structure on organizational life. The majority of employees are not directly influenced.

Another perspective is to consider Branson to be an authentic leader whose moral compass is towards a happy and autonomous work force. He avoids the dilemma of enforcing democracy by inviting change rather ordering it. He shares a generally non-coercive style with some of the most successful modern entrepreneurs such as Facebook’s Mark Zuckerberg who have built creative organizations

Oh, and one more thing …

The story breaks as the engaging fun-loving Branson is launching his new book. The Virgin Way: Everything I know about leadership.

Simples?


Face to face in Moscow: Facebook’s founder meets Prime Minister Dmitry Medvedev

October 2, 2012

Facebook’s founder Mark Zuckerberg met Russian Prime Minister Dmitry Medvedev in Moscow to discuss intellectual property issues.

Zuckerberg was beginning his quest for new global markets, as the leader of the newly floated Facebook organization [May 2012]

The Voice of Russia reported:

On Monday [1st October 2012] Dmitry Medvedev and Facebook founder Mark Zuckerberg had an informal meeting at the Prime Minister`s residence outside Moscow.

Since Mr Medvedev has his personal video blog, not to mention accounts on Facebook, Twitter and LiveJournal, his meeting with Zuckerberg, whose social networking site already has over 995 million users, has become a hot topic for the media.

Mr Medvedev was reported as saying

“The social networking sites have become extremely popular worldwide. And Facebook`s contribution to this is obvious. If I am not mistaken, some 10 million Russians are on Facebook. Of course, it is not that much compared to the US, where there are about 30 million Facebook users. Still, these figures are impressive. We also have our national social networking sites such as Odnoklassniki (Classmates) and VKontakte (Staying in touch). Besides, everybody is using Twitter. This is a kind of a different reality. And you personally have contributed to this”

Mr. Medvedev and Mr Zuckerberg discussed copyright protection on the web.

“As a lawyer myself I am very interested in this issue. I used to do research on it in the past. I believe that if an object of intellectual property is not listed on the web as requiring special protection it could be used freely” Mr. Medvedev said.

Friends or not?

When the meeting was over, Mark Zuckerberg presented Dmitry Medvedev with a T-shirt printed with the address of Medvedev`s Facebook page. The Voice of Russia report did not say whether Dmitry and Mark had friended each other, and if so, when.

The IP challenge

The conversation ever-so-politely introduced the challenges of intellectual property rights facing Facebook and other Western organizations as they seek to work globally.

The bonds that tie

It occurred to me that for all the differences in culture, America and Russia have been parts of the world which have seen the rise of self-made entrepreneurs cum billionaires. In that sense Zuckerman has a head start over the more traditional Fortune 100 CEOs in doing business there.

Acknowledgement

Image from biz Russia. IP rights as indicated by Mr. Medvedev