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Our pal, Rick


"We can love the player but hate the game"


I don't buy into the idea that CEO's are stupid. I don't find them to be particularly shortsighted or clueless. Believe it or not, I have a hard time even seeing them as greedy, in a general way.

I've shared my bias on this. My dad was a CEO, which would naturally incline me to think of them favorably. Nobody thinks of their dad as evil. Not even Ted Kennedy. So of course I'm biased.

I'm just saying, I've been around a lot of these guys. I grew up around them, usually during "down time", when they didn't have Eliot Spitzer's wicked Orcs transcribing their every word. They are just people. Some of them are jerks, some are the salt of the earth. Most of them are pretty impressive but all of the ones I've met have been more or less normal and human (whether they thought so or not).

To lump them together and judge them, as a group, to be Evil gives CEOs both too much and too little credit. Take them case by case, action by action. Judge their motives, if you want to bother, by starting backwards from the idea of them not as CEO's but rather just another guy you met at, say, a basketball game.

"Sick Rick"

As a case study, let's create just such a CEO. Let's call him Rick. We met Rick at a Piston's game when one of our brokers hooked us up with insanely great seats because our trading generates monster commission ("Retail value: $99! HAHAHA").

Without any pre-discussion, we lobbed a full beer towards the Pacer bench in near perfect unison with Rick. We immediately understood Rick, and he us, in a more intimate way than our respective spouses ever could.

So it was every bit as natural for Rick to tell us that he's "in the car game" as it was for us to call each other silly nicknames and exchange dirty jokes. We're that kind of pals with Rick.

"Man... that must be a tough business these days, huh Rick?" we say, causing Rick to visibly flinch. In a fit of emotion Rick pours out his whole story. For the purpose of simplicity, we'll say that Rick's story is roughly this (only he still hasn't told us where he works... with that mess we're almost afraid to ask him).

We feel bad and our beers are soaking into Ron Artest's shirt. We offer to get the next round for Rick.

Why is our buddy Rick acting so silly?

While we're standing in line for beer, we ponder aloud, in a stilted, business school case study kind of way.

"Assuming our friend, Rick, isn't stupid, evil, greedy and short-sighted, why would he being doing things that make it look like he is?"

Because his other choice involves horrifying professional risk to himself and people he works with. Rick, being a person (and not particularly heroic or a "natural leader"), would rather avoid that type of thing for as long as he possibly can.

It's not as though Rick doesn't realize that his business is "troubled". Rick has strangers coming up to him in the street to tell him he's at the helm of the Titanic. He's got 10 people on the hold at any given moment, all of them hoping for the chance to tell him he's screwed. He's got 10x that number of people in his own organization happy to tell anyone but Rick how horrible a job Rick is doing.

It's not that Rick is a fool. It's that Rick isn't Winston Churchill. If he promises "nothing but blood, sweat and tears" there's a better than 99% chance that Rick will lose his job and someone else will finish wrecking the company.

The way Rick sees it, the course of actions he's taking is horrible but at least he knows exactly why. He has no idea what would happen if he stopped the incentives and tried to spend the type of money it would take to actually make a real change at the company.

But he knows it would be horrible so he's putting it off as long as he can. He knows it ends poorly but he's afraid of the other choices.

We can disagree with Rick without having to loathe him. We can even buy him a beer without wanting to spit in it. He's not evil, he's just a guy in a horrible situation (for which, let's face it, Rick gets pretty well paid).

No positions in stocks mentioned.

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