So I have to accept this superficiality yet still be grounded in my business?
Yes, being grounded is what beats the superficiality. If you know what’s going on, deeply in your heart and soul as well as your brain, you are less likely to screw up with your decisions.
The third myth you mentioned concerns executive bonuses.
Yes, that’s destroying companies. The crisis in the United States is not an economic or financial crisis but a management crisis. My feeling about executive bonuses is that any candidate for a chief executive job who even raises the issue of bonuses should be dismissed out of hand. That’s a slightly different position from what is prevailing today.
Are you on any boards?
No. I get asked occasionally, but I don’t want to commit to anything regularly. I don’t get asked, however, hourly, weekly, or monthly. But some big boards have asked me.
So why shouldn’t they have bonuses?
I defy anybody to measure the effect of a single individual or a few individuals on the overall financial performance of a company. You can do it in the short run if you assume stock price or profit are an indication of success, but any fool can manipulate balance sheets, income statements, R&D, or investments and influence stock prices and profits in the short term.
In addition, how can you measure it in the long run unless somebody stays there for 20 years? If a CEO is in place for five or six years and somebody else replaces him, if the company does well, the successor will say it’s all because of me and if it does badly, the successor will say it’s my predecessor’s fault.
Beyond that, this approach creates narcissism. It creates the sense that the company is the chief executive, and nobody else matters. That is what has been trashing companies.
How many companies do you know that when they don’t meet their numbers on Wall Street fire 5,000 people? How come 5,000 people suddenly became redundant? What makes people redundant from week to week just because you don’t meet your numbers? What you are doing is trashing the future of the company, cashing in on the future of the company, to make the wolves of Wall Street happy. It’s complete madness.
Companies are communities. There’s a spirit of working together. Communities are not a place where a few people allow themselves to be singled out as solely responsible for success. And how could you call such a person who asks to be singled out a leader? Which means the heads of the Fortune 500, with a few exceptions, aren’t leaders.
But this madness continues because we are seized by this sense of greed and narcissism. The ideas that leaders are more important than managers is a part of that narcissism.
Another myth you seem to have been questioning in recent work is that the best management is in business and that “public service management “ is an oxymoron.
That’s complete and utter nonsense. There are great managers in every sphere and there are terrible managers in every sphere. What we are getting in the United States is terrible managers in corporations – people who are too disconnected.
American business is not a model for how to run business today. It’s also no way to run health care. There’s a lot of writing these days, particularly from people out of Harvard Business School like Michael Porter, that we can solve the problems of health care by making it more competitive and treating it more like a business. No country on Earth treats health care more as a business than the United States and their health care system is a disaster. Health care is a calling; it’s not a business.
Who do you look to for management wisdom – who do you read with some sense of excitement?
I never thought of that. There are people I have time for. Years ago, Dick Rumelt from UCLA, who only strategy professors know. He’s not on any list of gurus, but is always thoughtful. There are lots of people doing interesting things, but nobody I turn to consistently. Lately information comes to me in diverse ways, through letters or e-mail. It comes from here and there. I don’t look to any one person in particular, except – and it’s about politics, which is where I am working more now – David Brooks of The New York Times. I read all of his columns; they are the only things I find consistently wonderful. Recently I was taken by a piece in the New Yorker on modern desserts, looking at what is happening in Barcelona.
Do you read anybody on management any more?
No, not that much. It’s boring.
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