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May 28, 2006

The Top Sixteen Lies of CEOs

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At the suggestion of, and with the help of, Glenn Kelman, here are more lies. These are the lies of CEOs running a companies that are beyond the startup phase. Startup phase lies you’ve read here before.

  1. “Working together, we’ve established our goals.” In other words, these are the goals that the CEO decided will make him look good. Few managers believe that these goals are doable, and yet they are the ones who are going to have to accomplish them. But that’s what working together means: the CEO decides and the workers do.

  2. “It’s like a startup around here.” This could mean that the place lacks adult supervision; capital is running out; the product is behind schedule; investors have given up, and employees are paid below market rates. Sure, it could alternatively mean that the company is energized, entrepreneurial, making meaning, and kicking butt, but just be sure to double check.

  3. “Your project will be a skunkworks reporting directly to me.” This means that no one else at the management level buys into the idea. The CEO might protect you—as this lie implies. Or, you may be fighting for your life against the naysayers when the CEO moves on to the next brilliant idea du jour.

  4. “I wanted to do this, but the board wouldn’t let me.” This is a cop out. A good CEO tells the board what she wants to do. She doesn’t seek permission—forgiveness maybe, but never permission. So this statement means one of two things: the CEO didn’t really try her best to get something approved or the board is losing confidence in the CEO.

  5. “I expect you to figure this out.” This is a loaded, supposed backhanded compliment. It’s supposed to mean, ”I have such confidence in you that I know you can do this.” Sometimes it does means this. Most times, though, it means that the CEO has no clue and is praying that you can save his butt.

  6. “Our sales pipeline looks good.” This means that the vice president of sales leaned on the regional sales manager who leaned on the regional sales rep to pump up the forecast because the CEO doesn’t want to look bad to the board of directors.

  7. “We will be profitable soon.” After leaning on the sales organization and it “came through with a great pipeline,” the CEO could then ”reliably“ predict profitability. He never did check with the CFO, though. If the company isn’t profitable, then it’s the fault of the vice president of sales or CFO anyway.

  8. “The stock price is not important; what’s important is building a great company.” There are handful of visionary CEOs who mean this when they say it. However, you don’t work for one of them. If one could get an honest answer out of CEOs, most would tell you that they’d rather have a rising stock price than a great company. Very few have the courage to build a great company and trust that a rising stock price is a natural outcome of this accomplishment.

  9. “I’ve never worked with a better group of people.” The career limiting comeback to this is, “Well, I have—starting at the top.” This can be a legitimate morale boosting statement when it is infrequently made. However, if a CEO spouts this off more than once every five to ten years, and you know there are clearly bozos on the team (often protected by the CEO), then you know that he’s playing you.

  10. “I’m open to new ideas.” The CEO must have recently read a book by a management guru. She’s certainly open to his own new ideas. She’s probably open to new ideas from the consultants that she hired at $10,000/day. Maybe she read a new idea in a blog, God help us. The relevant question is whether she’s open to new ideas from the rank-and-file employees who really know how to fix the company.

  11. “I want to hear the truth; I don’t want yes-men around me.” Maybe this is the truth: he doesn’t want yes men around—he wants yes women. But I doubt it. It could be that he’s so arrogant that he believes that he’s always right so there’s nothing to disagree with. But I doubt that too. The most likely situation is that he’s just lying, and he wants people to always agree with him.

  12. “I will gladly step aside when the time comes.” Sure, with a $10 million severance package, who wouldn’t be glad to step aside?

  13. “This is how we did it at (name of previous company he was fired from), and it worked.” And that’s why the company let him go. And that’s why the employees at the previous company rejoiced when the news spread. And, unfortunately, that’s why the directors of this company hired him: because he was a senior-level packaged goods guy who was available, and the board thought that your tech products should be sold like laundry detergent.

  14. “I don’t need to understand all that whiz-bang stuff to be a good CEO.” Absolutely. Your customers aren’t that smart. Neither are your employees, vendors, and partners. The CEO just needs to stand there: tall, white, and gray haired, and let everyone kiss his ring.

  15. “I don’t need to rehearse my speech.” This is because he’s not to going to gauge audience reaction since his limo is waiting to whisk him away. He’ll simply ask his handlers, Trixie and Biff, how they think he did. And they will tell him that the emperor has very fine clothes indeed.

  16. “We are a customer-focused company.” If only the CEO had appended two additional words: "this quarter." Because next quarter the company will be an innovation-driven company. And the quarter after that a Six Sigma driven company. And the quarter after that the company will be producing purple cows. And the quarter after that it will be evangelistic (depending on whether the CEO reads my book or Seth's first).

Bonus: “I can telecommute and still keep my house on the golf course in Carmel.” The CEO should be living and dying with the company. If anything, he should be there more than anyone.

Rather than these lies, here are four things you’d like your CEO to say:

  1. “I don’t know.”
  2. “Thank you.”
  3. “Do what’s right.”
  4. “It’s my fault.”

Written at: Alesund, Norway

Comments

Remembers me of Elizabeth Charnock!

These are all great. But #13 made my head pop off.

I worked for a terrible public company I won't name (but it begins with "S" and ends with "omera").

We had a tanned, well-coifed CEO from a packaged goods company. He required his sec'y to book a hotel only if the gym had the right weight lifting equipment, no matter the cost, and he flew first class (not business) or not at all--all while the company lost 20 million a quarter, every quarter, without fail (on just 20 million in revenue). Everyone cheered when he was fired. I'm sure he was shocked--he thought he was a genius, having sold billions of Nutrasweet packets. I'm sure it made sense to someone that he'd make a great CEO of a telecom hardware company.

(Unfortunately we still had the same board.)

Ps. He had entire bookcase FILLED with management books, so everyone could see he owned them.

There was a show last night about Vivendi... CEO Jean-Marie Messier was probably as good at 'lying' as they get... but lying in and of itself is not enough, one has to have the aura and persuasiveness to go with it...

Andrew,

Vive le difference. (What? Duran Duran is out? :-)
Contrary to popular belief, strategy isn't a 70 page document detailing a 5 year plan. It's as simple as a one-liner that describes what offering you will sell to which customers, what makes you their best choice, and why they should pay you. Sure, this will change over time. So what? Doing is key, and "just use the force" sounds cool, but doing without thinking is what's available to headless chickens. We can do a little better-- can't we? ;-)

Amit,

Strategy is so 1980s :-)

Strategy gets in the way of execution. Sometimes (well, almost always) the best thing to do is just DO, DO, DO.

In other words, stop thinking and start tinkering.

You'd find something pretty surprising along the way:

More, innovative, ideas will start popping up than if you had constructed a "bulletproof" business strategy document.

This one is my favorite: "Our problem is execution." In other words, you don't have a strategy :-)

I may be sparking some emotions here, but MJ, I respectfully disagree with you.

Yes, your company needs money to survive. But, if it's driven solely by money, it's going to run itself straight into the ground.

A money-first mindset drives you to think win-lose, instead of win-win.

A money-first mindset drives you to think cashflow first, customers a distant second.

A money-first mindset drives you to restrict customer value as much as you can, so you'll fatten the oh-so-precious-bottom-line.

It's a real pity most companies are run that way. Instead of getting customer value, we've been accustomed to rude, unintelligible service reps. And, it absolutely doesn't stop there.

When companies focus on the bottom line first, they forget the most important ingredient to grow that bottom line:

Providing customer value.

As a notable author once said, money's like water; you need it to survive, but it's not the point of life.

"“We are a customer-focused company.”"

Every company is, or should be, a money focussed company. With money we pay wages. We can allow time off. We can reduce workloads so staff can spend more time with their families. For the more immature of us, we can buy XBOX360s and iPods for everyone and allow everyone to play with them during work hours.

Telling us you're money-focussed is at the very least honest. Sure. Have other things in your "focus" as well like "the environment" or "innovation" or if you must "the customer" but never forget that the exchange of money for goods or services is the reason there's a company.

Of course, if you're a billionaire then you can have an "innovation focussed" company or a "candy-focussed" company. But then it's not really a company, it's just something to do to fill the time while the grown ups are talking.

As always, right on. How's Norway?

**************************

Thanks! Norway is like Hawaii except 40 degrees, the sun goes down at 10:30 pm, and almost everyone is Haole. :-)

Guy

"Rather than these lies, here are four things you’d like your CEO to say: ... 2. 'Thank you.'"

Actually, I'd like to hear "Thank you -- here's a pay raise for you for working hard and well. How about some time off?"

Great list. Laura, the "he" refers to the just-read guru...

I'm proud of never said that :)

Well, I hear that all the time by at least directors above. It seems to be the buzzwords most Asian high-level executives use. As a matter of fact, I have heard all of them from different people.

nice post, Guy. :)

Magnificent!

How about ... "Yes, we do support part-time in management position"?

As always, a great one!

A couple of additional lies:
1. "My door is always open" - but only to people who come to massage my ego

2. "We have never been in better situation, our market is inifinite and extremely receptive of our products". This one usually a few days before major layoffs.

3. "MY job is to get out of my TEAMS way and let them do their jobs!"...ya right!

4. "I have full confidence in my sales team", or in other words, call me personally to get the final quote and close the deal.

Business is like a poker game. There’s only so much money on the table, so for one to get more money, another player must lose money. Hence, there are many lies.
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ROFL - I'm voting #14 for lie of the year!

Cheers.
Scott

Is it me, or does it seem like everybody in business is a bunch of liars?

I have had way too much experience, with 3, 4, 5, 11, and 13! This list is great, Guy - thanks! (11 burns me a lot!)

Just a little gender check here in an otherwise fabulous post:

10. “I’m open to new ideas.” The CEO must have recently read a book by a management guru. She’s certainly open to his own new ideas.

of course, you roq for making some of your CEOs female in the first place!

ROFL... This is such a great post. The biggest problem with hit however is the CEO that is guilty of it will in fact say that Guy Kawasaki is lieing. LOL They tend to believe their on bullshiitake so much that these TRUTHS don't affect them.

If I had a dollar for every time I heard #13 I'd buy Microsoft.

I actually had a short run with a company that hired me on the #2 principle, and you are DEAD RIGHT! No adult supervision and the capital has run dry.

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