May 09, 2005

The Myth of the Executive Job

Just to be Fair and Balanced - I wrote here about the Myth of the Manufacturing Job. This was not an anti-manufacturing, anti-union screed per se, but I was trying to show the code-words used by politicians as well give some context to the discussion.

Now to pick on the other end of the corporate ladder: there are just plain too many Executives Positions in American business. We still have too much overhead. In this unbelievably sophisticated information age, why do we have more managers, more executives to manage (babysit) the real producers in a company?

We used to have a CEO, a CFO and, maybe a COO. Now we have all kinds of CxO's

CTO - Chief Technology Officer
CPO - Chief Procurement Officer
CPO(2) - Chief Privacy Officer
CMO - Chief Marketing Officer
CIO - Chief Information Officer
CGO - Chief Growth Officer
CQO - Chief Quality Officer
CDO - Chief Diveristy Officer

When you confer titles like that on people you are just asking for it. The first thing they do is stop doing actual work (the Chief Officer is above the fray, a strategy person) The second thing they do is work on their Org Chart and begin justifying more staff (Chief Officers need staff to tell them what's going on - and that staff growth is usually in the Corporate Office, not out in the real world as Chief Officers hate to be lonely at HQ). The last thing they ever do is get their hands dirty and drive change at the front lines of the business world, where it counts.

I evolved a personal business philosophy by working at the grassroots, working level of many different business operations, and I really believe that if you are not Selling, Designing, Making, Buying, or Fixing (service), you are an overhead cost burden to the firm that should be zero-base justified each year.

Why does your position exist?

Is it to coordinate, track, check-up-on, communicate, story-tell, or work on "process" issues? Some of these things may be necesssary evils in a modern corporation, but nevertheless, they still are evil.

Of course we need an executive staff to support the broad needs of the company. But these should be small elements, staff jobs -- not "Chief Officers." They should have a small group of support specialists serving the needs of the people actually doing business.

I think the growth in these Mythical Executive positions is a result of inexperienced senior leaders with no real depth in their market or trade. Jeff Immelt @ GE sees it this way:
Jeff, the Harvard Business School graduate, is out to banish Cordiner's ghost for good. "I absolutely loathe the notion of professional management," he told an MIT audience in September. Which is not an endorsement of unprofessional management but a statement that, for instance, the best jet engines are built by jet-engine people, not by appliance people. Rotate managers too fast, moreover, and they won't experience the fallout from their mistakes— nor will they invest in innovations that don't have an immediate payoff. "
He's right. This strange, tri-polar (US, China. India) global economy can ill afford know-nothing executives moving from job-to-job, industry-to-industry, faking their way through and escaping before disaster. Again, since they don't really know anything, they have to build a large staff to keep them informed enough to appear successful.

How do we cull the mythical executives? Well, the pendulum always swings the other way. Our system forces companies to re-trench and evaluate cost structures frequently. In time, shareholders will ask "How REAL are these executive positions? What do they actually do?"