
Why CEOs are so stupid - blasdel
http://www.markbernstein.org/Sep09/WhyCEOsaresostupid.html
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btilly
Absolutely. We make up narratives, then fit facts and stories into those
narratives.

For an excellent example, read Good To Great then read The Innovator's
Dilemma. Both books look at the rivalry between Nucor and Bethlehem Steel. The
difference is that Good to Great tries to fit that example into a theory of
great CEOs, while The Innovator's Dilemma tries to fit it into the narrative
of disruptive innovation. So in Good to Great it is hard to see why Bethlehem
Steel was full of idiots, while The Innovator's Dilemma makes it painfully
clear why the bad decisions that Bethlehem Steel made were inevitable given
their customer base and market pressures.

Same story. Same facts. Different narratives. Radically different impressions
of the competence of the people involved.

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adw
To summarise: "confirmation bias". He's got a point.

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arithmetic
Yes, confirmation bias at play. But I'm still not sure if that makes it OK to
title the article "Why CEOs are so stupid" - that's a gross generalization
even for this particular CEO, given that there was this _one_ interview where
he messed up.

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seldo
I think the title was satirical. His point is that CEOs are not actually _so_
stupid, we just look at the ones who fail and point out all the stupid things
they did, while the successful ones may have done an equal number of stupid
things, but we didn't pay attention.

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dcurtis
To suggest that he consciously said this to lower expectations is probably
giving him too much credit. What he said is true enough that I'm sure it was
just the first thing that came to his mind.

~~~
ShabbyDoo
There's something American going on here. You can't mention that a 400lb
person is fat in that person's presence, and you can't say that your product
might not be better than the iPhone. We know both things to be true, but we're
not supposed to say it.

~~~
pyre
He's definitely 'allowed' to say that, but from an investor standpoint, he's
not showing very much confidence in his product and the future of his company
when he says things like that.

~~~
netsp
Really? Doesn't this assume that investors are dumb or that they prefer blind-
but-optimistic CEOs?

I just heard an interview with the CEO of Carsales.com (just went public). He
was asked if he was worried about free classifieds doing to them what they did
to print. Fair question. I'm sure that as CEO of a classifieds site he has
thought about this . He said (paraphrased) "No. Sellers prefer us because we
give them a good price _and_ get the car sold." He alluded to an inherent
connection between the first and second part of that sentence, that payed
classifieds are inherently better at selling cars then free ones.

Does this 'demonstrate confidence' to investors? If you believe him, you
believe he is blind to his biggest threat. I assume that most investors don't
beleive him. What does that demonstrate?

If he was talking face-2-face with an investor and got asked that question,
would they be impressed? Anyone here an investor that would say yes?

~~~
roundsquare
Well, investors depend on what the CEO says. What he is trying to avoid is
sounding optimistic and then falling short of expectations. The up then down
in the stock price looks bad.

However, its a good point that we should want a _correct_ representation
instead of a pessimistic one. We should seriously wonder about a CEO who
drastically under predicts performance just as we would one who over predicts
it.

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QE2
Honestly I thought the question was rather pointless to begin with.

Sprint didn't make the Pre. Sprint doesn't compete with the iPhone. The iPhone
is a device, Sprint is a carrier. The iPhone may very well end up on Sprint in
the not-too-distant future.

Also, if you look at the subtext, you might see that Hesse is delivering a
veiled attack on the iPhone--that it's all about branding and hive mind.
Michael Jordan was a great basketball player, but he was far from the
greatest, even during his career. His style and flash are what got him his
place in the spotlight, just like the iPhone.

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makecheck
The fonts on that page are nice. He's using the free ones here:
<http://www.exljbris.nl/>

