Blog: Simply Nonsense

Gambling CEO Style: Always All-In

16 March 2018

Gambling is a popular metaphor among CEOs—"doubling down” and all that stuff. So let’s use it to consider the compensation of those CEOs who gamble with their bonuses.

First, CEOs gamble with other people’s money. This is nice work, if you can get it.

Second, CEO gamblers collect, not when they win, but when they appear to be winning. Since it takes time to know a winning hand, the CEO gamblers usually collect in the midst of the game. This is like taking the pot with a couple of aces on the table, while the rest of the hand remains closed. Poker players call this kind of thing a semi-bluff. No semi for these CEOs! Just make sure that the best cards shown.

Gambling is a popular metaphor among CEOs—"doubling down” and all that stuff. So let’s use it to consider the compensation of those CEOs who gamble with their bonuses.

First, CEOs gamble with other people’s money. This is nice work, if you can get it.

Second, CEO gamblers collect, not when they win, but when they appear to be winning. Since it takes time to know a winning hand, the CEO gamblers usually collect in the midst of the game. This is like taking the pot with a couple of aces on the table, while the rest of the hand remains closed. Poker players call this kind of thing a semi-bluff. No semi for these CEOs! Just make sure that the best cards shown.

Third, CEO gamblers also collect when they lose. This, I assure you, does not happen in real gambling, which has yet to adopt golden parachutes. If it did, the real gamblers would be all-in all the time—every single chip. Just like those CEOs who casually bet their companies.

Fourth, some CEO gamblers collect just for drawing cards. No need even to show those aces. CEOs who are not much good at managing the company can be brilliant at managing the compensation. For example, some get a bonus for signing a big acquisition, long before anyone can have any idea if it will work. (Most, by the way, don’t). Some risk-takers!

Fifth, CEO gamblers can also collect for staying at the table. This is the greatest boondoggle of them all. It’s called a “retention bonus.” Not only do these CEOs get paid for doing the job (so to speak); they also get paid for not leaving the job. Now that is really nice work, if you can get it.

Back at home, check the beds of these CEOs. You will find them rather crowded. Cozying up are the compensation consultants, who join the CEOs in screwing everyone else. And don’t forget the board directors—voyeurs in these beds—who explain that, after all, everyone else is doing the same kind of screwing. This kind of followership they call leadership.

I must add that, in one respect all of this is like real gambling: win or lose, the game is played now while the social consequences trickle in later. So, board directors,  how about this instead, no gambling involved, just a win-win for the society and the economy:

Dismiss out of hand all candidates for the CEO position who seek a compensation package that would set them apart from everyone else in the company. (You can say: “Didn’t you just give us a spiel about ‘teamwork’?”) Indeed, terminate the interview at the mere mention of the word “bonus”, definitive proof that the candidate has no concern for the company, indeed no business running a business of cooperating human beings. (“You just said that ‘Human resources are a company’s greatest asset.’”) Turn the tables upside down and strike a blow for responsible gamesmanship.

© Henry Mintzberg 2018, who gambles with a bit of his own money in www.CoachingOurselves.com. An earlier version of this appeared in the Globe & Mail (3 April 2009). Guess which one in the photo is the CEO.

“Guns don’t kill, people kill.” Sure, but… people with guns kill.

4 October 2017

This blog is updated from one posted on mintzberg.org/blog on 25 October 2015, under the title “Do the people of America have the right to bear nuclear arms?”

The Second Amendment to the United States Constitution gives the people of America “the right to keep and bear arms.” Companies that sell arms thus make a great deal of money, the consequences be damned. So here is a conversation I fantasize having with the people who run the National Rifle Association.

“Do the people of America have the right to bear nuclear arms, say in a shopping bag?”

And they reply: “Are you some sort of nut?”

This blog is updated from one posted on mintzberg.org/blog on 25 October 2015, under the title “Do the people of America have the right to bear nuclear arms?”

The Second Amendment to the United States Constitution gives the people of America “the right to keep and bear arms.” Companies that sell arms thus make a great deal of money, the consequences be damned. So here is a conversation I fantasize having with the people who run the National Rifle Association.

“Do the people of America have the right to bear nuclear arms, say in a shopping bag?”

And they reply: “Are you some sort of nut?”

To which I retort: “Not at all. This is the answer I expected. We have now established the basic point: that a line has to be drawn somewhere. Where do you draw it: between nuclear bombs and cluster bombs? cluster bombs and automatic weapons? automatic weapons and handguns?” (A friend who hunts tells me that a one-shot rifle is all he needs. But he hunts deer, not people.)

I draw the line between guns and knives because, with knives in every kitchen, it’s tough to control them. (Handguns account for far more murders in the United States than do knives.) The right to bear arms may have made some sense when muskets were the only arms available, and took time to reload, with no 911 to call. But technology has moved on: now we have arms that can mass kill as fast as anyone can dial 9-1-1.

Here’s another mantra of the gun lobby: “Guns don’t kill; people kill.” Actually, people with guns kill, whether a toddler who mistakenly shoots a sibling or a lunatic in a hotel room who wantonly murders many people. (In total, on average, 93 Americans will die from gun violence today.)

Then there is the mantra that “We need more guns, not less”, presumably so that an innocent bystander can be ready to kill some killer. Can you remember the last time you heard that an innocent bystander killed a killer? In contrast, today may well be the latest time an innocent bystander was killed by a killer.

A young woman, traumatized by witnessing a mass killing, mouthed this mantra to a TV reporter. So why didn’t she have a gun in her pocket, finger on the trigger ready to kill him? After all, she could have bought one just as easily as he did. OK, so she didn’t expect a mass killing in her neighborhood. But fear not (really fear yes): with this attitude, one can’t be far away.

And here is a truly true fact: In the official copy of the Second Amendment, kept in the National Archives, this right to bear arms is qualified: “...a well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”  Like the Swiss who, in case of hostilities, keep their one rifle in a closet, tightly regulated, Americans were given the right to bear arms for the sake of security, not murder, not even for the profit of private companies. 

So what’s going on here? Can people be that mindless, or that manipulated? It looks to be both. The Tea Party website used to have the following on its list of “Non-negotiable Core Beliefs”: “Gun ownership is sacred” and “Special interests must be eliminated.” The gun lobby is apparently not a special interest! And think about the ability of special interests to use the media to manipulate the minds of millions, including that young woman.

Can’t get rid of guns? How about getting rid of the right to take them anywhere? Better still, how about a constitutional amendment that puts a "not" in there somewhere? Dream on. Let’s stop kidding ourselves. This is not about buying, keeping, or transporting guns. It’s about bribery. When the Supreme Court granted corporations, as “persons” in the law, the right to make political donations to their hearts’ content, it legalized bribery. With these donations came the lop-sided lobbying that now dominates Congress, and is destroying the country’s renowned democracy. Guns are just the most blatant example of how the decent folks of America have lost control of their country.

© Henry Mintzberg 2017, 2015. To go deeper into this world out of whack, see my book Rebalancing Society https://www.amazon.ca/Rebalancing-Society-Radical-Renewal-Beyond/dp/1626....

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In a dangerous world, mine can no longer be bigger than yours

12 August 2017

Why do we have juveniles running the world, obsessed with demonstrating that "mine is bigger than yours"? The president of the country with the largest nuclear arsenal on earth insists that no other country will ever have a bigger one, as if 7000 warheads are insufficient. Why does this country give any single person—let alone this loose cannon—the power to launch that? The only answer I can imagine is that “getting them before they get us” has had higher priority than protecting life on earth from an inadvertent catastrophe.

For his part, Putin insists on making Russia bigger, if not better, at the expense of its neighbors. At the expense of its people too, who pay the price of these leadership ego trips. But more so the people of North Korea, and the American soldiers who fell in Vietnam and Iraq.

Why do we have juveniles running the world, obsessed with demonstrating that "mine is bigger than yours"? The president of the country with the largest nuclear arsenal on earth insists that no other country will ever have a bigger one, as if 7000 warheads are insufficient. Why does this country give any single person—let alone this loose cannon—the power to launch that? The only answer I can imagine is that “getting them before they get us” has had higher priority than protecting life on earth from an inadvertent catastrophe.

For his part, Putin insists on making Russia bigger, if not better, at the expense of its neighbors. At the expense of its people too, who pay the price of these leadership ego trips. But more so the people of North Korea, and the American soldiers who fell in Vietnam and Iraq.

Blame not just Putin, but NATO, because when the Cold War ended, it too decided to get bigger, by taking in nations on Russia’s flanks. With the Cold War gone, NATO had nothing to do. And so it found something to do, namely bring the Cold War back. Putin  was quiet then, not now.Talk about irresponsible posturing.

Meanwhile China sticks it to a weaker neighbor over some irrelevant hunk of rock in the sea This it does to claim--or is it to grow?—its territory. Boys may be boys, but we had better get the juveniles out of the schoolyard before they blow us all to bits.

Russia and China are ruled by power. America is ruled by reverence. Americans revere their president the way Catholics revere the Pope. Now CNN broadcasts its relentless disparagement of the incumbent alongside its mindless deference to the office, as if the two can be separated. Will American children be reciting the name Donald Trump alongside Thomas Jefferson?

Face it: the president of the United States of America is an unscrupulous ignoramus.  Yet almost half the voting population put him into office, and may well do something similar in the future. Accordingly, despite the many thoughtful and concerned people in the United States, can anyone outside the country ever trust it again? Now we have the incumbent facing off on behalf of the “free world” against the devious brute of North Korea. They deserve each other, but no-one else deserves either of them. Hold your breath.

The problem is built into the organization—really the disorganization—of our world. In a village with weak government and no police force, the thugs take over. This is the state of our global village. Three countries have taken over, and vie with each other for power: over who has more nuclear weapons, or greater control of its neighbors, or an additional hunk of rock in the sea. Thanks to “leaders” who never made it past the schoolyard, we may never make it past them.

What's the alternative? To wake up, not such leadership, but all of us who tolerate its nonsense. Thankfully, more and more people across the political spectrum, hitherto passive, are getting the message. Never before have so many concerned people been prepared to vote with their feet, their ballots, and their pocketbooks. They just need some way to channel that energy into constructive change. And that will take some new thinking. So how about this, for starters at least?

There are almost 200 countries in the world, some of whose governments are insufferable, but many others that are quietly democratic. Acting together, as a coalition of concerned democracies, the latter could exert their influence to challenge the bullies who put us at risk.

We need world government with teeth and legitimacy, not a Security Council whose five permanent members all have nuclear weapons, histories of bullying, and rank (with Germany) as the largest exporters of armaments in the world. This is an Insecurity Council, and judging from Syria, a War Council. We need a Peace Council.

Does such change sound utopian? Sure it does. Shall we therefore stick with what we have, and destroy ourselves sooner or later?

© Henry Mintzberg 2017. See Rebalancing Society…radical renewal beyond left, right, and center.  

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