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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Murray v Djokovic: Momentum swings are mostly in the emotions of onlookers

January 27, 2013

Australian Open Tennis Final 2013. The commentators talk frequently about momentum swings. Closer inspection suggests this is mostly revealing only of the emotional swings of the observers

Tudor Rickards

One thing trumps even watching the start of the Australian Open Tennis Final. That is an indoor court booked for an hour’s hitting just as the final starts. We trudge though snow. [Yes, this is the UK not Oz]. Others crowd around the TVs in the clubhouse.

Return to clubhouse to learn the match is well-balanced at one set all.

Set three

I learn that Murray has just lost the second set after appearing to be in charge. Calls for medical help on a gory foot blister. Much talk of momentum shift. Monumental effort needed by Murray, says Andrew Castle and John Lloyd on BBC TV. As far as I can see, nothing has ‘swung’. Both players are still serving and returning nervelessly. They seem to be deliberately conserving energies on opponent’s serve, in order to make winning their own service games easier.

At 3-3, the commentators still talking about Murray having to overcome ‘monumental’ disappointment of losing the previous set and having to cope with his blister. Their emotional state builds up as each Murray serve is seen as potential set-loser. Of course, the same applies to Djokovic. Who goes 5-3 up, and then wins third set.

Set four

Murray slightly weary. Drops serve. Djokovic now clearly is stronger physically. Murray loses the close points. Seems to be much more physical decline than evidence of effect of a metaphysical concept such as momentum. The fitter guy prevails. Now the commentators agree that Djokovic won because he played the better tennis, particularly at key points.

Momentum v Momentum Denying

In looking closely at this, I realize that momentum is a difficult to refute concept. As it relies on momentum swings, it is not disproved by a player coming back after losing momentum.

It seems to me that the concept could do with some closer attention. Me, I’ m still a momentum denier.