“A small team of A+ players can run circles around a giant team of B and C players.”
— Steve Jobs
“A's hire A's and B's hire C's.”
— Donald Rumsfeld; one of Rumsfeld's Rules. Proof to follow:
Meet a pigheaded CEO who is fettering our economy
I previously believed that pure, unadulterated capitalism was the ideal catalyst to expand our economy. However, once I began interacting with certain capitalists, I saw how their human foibles hampered their success, and therefore the success of their businesses and our economy.
Here's an example: While speaking with the president and CEO of a lawn equipment manufacturer, he said that he wanted his company to begin manufacturing tractors. However, he did not want to be just another “me, too” producer of mediocre tractors because that market is already flooded with umpteen ones from many manufacturers who compete on price because they can't develop tractors that would truly stand out from the crowd—tractors that people would gladly pay more for, and hence tractors that would be more profitable to manufacture.
Dr. Laurie Roth, the entertaining and insightful host of The Roth Show, suggested that America could successfully compete with cheap labor around the world if we became “first in quality and innovative ideas again.” She is correct.
I have many ideas for improving tractors, from a tire that can quickly and reversibly morph into a track to improvements that would allow a small tractor to do jobs that now require huge tractors, bulldozers, or even a heavy equipment front-end loader. Currently, manufacturers rely upon brute size and mass to give their products more powerful abilities, but this reliance upon more weight to do more work is an egregious waste of resources. I can make a 600-pound garden tractor do things that tractors weighing ten times as much cannot do, proving that bigger is not necessarily better.
“Any fool can make things bigger [and] more complex. It takes a touch of genius—and a lot of courage—to move in the opposite direction.”
— Albert Einstein
I told this CEO that I had several ideas that would enable his company to manufacture superior and more profitable tractors. I know that corporations are usually resistant to pay independent inventors for their ideas, so I offered to give him one idea free, or for a nominal sum ($1). I also explained that I would sign any contract he gave me; a contract written by his legal staff prohibiting me from suing them for patent infringement. What did I ask in return? Only that he consider my other ideas—inventions that I would also supply to them without obligation. If he thought my inventions were valuable, I would accept any payment that he, in his sole discretion, deemed to be adequate compensation. Furthermore, I wouldn't just give him ideas; I would give him fully functional products that I developed at my own expense and proved to work.
I was willing to make that offer because I don't have one good idea; I have so many that I can afford to give away some to get my foot in the door. However, when manufacturers won't accept free inventions that could give them a huge competitive edge, you must question if they’re doing everything they can to improve their products and hence the American economy. The answer is obviously no!
Did he jump at the chance? Hardly. He said “no,” explaining that he would continue to rely on innovations generated within his company.
“What innovations?” I wonder with exasperation every time I use the snowblower his company produced. I have at least 17 inventions pertaining to snowblowers that would make snowblowing faster, easier, more effective, and more comfortable. If he utilized my inventions, he could dominate that market and the tractor market. But no, he'd rather stagnate. Now I understood what President Hoover meant when he said, “The only problem with capitalism is the capitalists.”
“With some exceptions, the wrong people are running U.S. companies. It's been that way for years, and it hasn't gotten much better.”
— Carl Icahn
So why did he say “no”?
Once he found out I am a doctor, he told me that he is on the board of directors of a hospital, and snidely said every doctor he knows is knowledgeable about medicine but, other than that, can barely screw in a light bulb.
While docs often like to kid about that extreme level of specialization, that stereotype obviously does not apply to everyone in medicine. I have a real knack for inventing, but also a flair for building things. Thus, I can turn an idea in my head into a working device. I've done this for so many projects for so many years that I am very confident about my inventing ability. If I meet someone who might benefit from it, I will matter-of-factly mention it.
Bragging is useless, but so is false modesty. Many people hide or deliberately minimize their talents to avoid being accused of bragging (speaking with excessive pride), but if the pride is proportionate to the accomplishment, it isn't excessive, and therefore isn't bragging. It's fact.
However, such facts can annoy people with fragile egos. He undoubtedly would have liked me better if I told him how wonderful his snowblower is, but what's the point in lying? It's not wonderful. It's OK, but at over twice the price of other snowblowers in that class, it should offer better features and performance. I straightforwardly explained that I could help him make better snowblowers, tractors, and other lawn & garden equipment.
“Having been born into this family, I've never really worried about my job. My great-grandfather built this company …”
— Dave Rife, one of the White Castle owners, on Undercover Boss
I think this rubbed him the wrong way because he inherited the company and therefore became president and CEO because he was born in the right family. Many people who benefited from nepotism have egos that are necessarily fragile or just filled with hot air and bluster. When you accomplish something on your own, it helps to build healthy self-esteem that no one can take from you. On the other hand, when you're president and CEO because you happened to slide down the right birth canal, you have good reason for doubting your qualifications.
During our long conversation, he said something that substantiated my supposition about his ego. When we discussed the first season of American Inventor, he emphatically told me how much he hated one of the judges on that show, Doug Hall, who he termed a “know-it-all.” (In psychological terms, that's called projection.)
I was taken aback by his caustic remark because Doug Hall is a very successful inventor and engineer who actually knew what he was talking about—unlike some of the other judges, who based their votes on emotion so often that contestants soon realized they could increase their chances of advancing in the competition by giving a sob story.
Spare me the melodrama; just explain the invention's merits. Doug felt the same way. In my book, that's good. Doug also gave opinions based on his years of experience to explain why an invention either wasn't truly an invention, or otherwise wasn't destined for commercial success. That's also good; feedback from a knowledgeable person is beneficial. I wondered why anyone would object to that, but Mr. Fragile Ego obviously did. I think that he wanted to be revered as The Man Who Knows Everything, so others who know more, or are more talented, are a threat to his ego. Hence what Rumsfeld said: “A's hire A's and B's hire C's.” B's do not hire A's.
“Big egos have little ears.”
— Robert Schuller
“Even worse … is the leader who responds with scorn and derision, or even anger, to subordinates' input. After a few exposures to the great leader's devastating negativism, there won't be much more forthcoming in terms of new ideas.”
— Automobile executive Robert (Bob) Lutz in Guts: 8 Laws of Business from One of the Most Innovative Business Leaders of Our Time
Comment: Years after I spoke with the pigheaded CEO, I invented a lawn & garden product that does something seemingly impossible: enable a simple device without engines or motors to significantly outperform powered machines costing thousands of dollars. Had that CEO connected with me, his company could have introduced this eye-popping technology, but the chance I'll propose it to him is zero, so he blew a one-in-a-lifetime opportunity.
pigheaded (adjective): obstinate to the point of stupidity; stubborn and tenaciously unwilling to yield; bullheaded, hardheaded, headstrong, mulish, immovable, inflexible, ossified
“Many leaders are threatened by talent, fearing that they won't be the smartest person in the room.”
— Wharton professor Adam Grant echoing advice from Jack and Suzy Welch in Even Smart Leaders Make These Mistakes. Jack Welch is the legendary former CEO of GE. Another mistake cited is to only hire from elite schools. In Work Rules, Google HR head Laszlo Bock wrote, “We now prefer to take a bright, hardworking student who graduated from the top of her class at a state school over an average or above-average Ivy League grad. The pedigree of your college education matters far less than what you have accomplished.”
“The greatest CEOs find ways to open communication so the company can listen to workers and find new ideas. Perhaps this is why on shows like Undercover Boss – it is always the boss who learns the most.”
— Gary Burnison in Act Like Malcolm Gladwell and Recognize Blind Man's Brilliance
“[They] never go it alone. [They] understand that it is naïve to believe you've considered every possible angle of an issue without seeking outside counsel from a varied and extended network. … [They] defy logic and conventional wisdom and blaze new trails. [They] don't dwell on why something can't be done, but only consider how it might be accomplished.”
— Excerpt from The 7 Characteristics That Set Great Leaders Apart
This experience changed my opinion about the inheritance tax. I previously believed that people should be able to leave their assets to their family without limitation. There is no legitimate reason to tax modest estates, but I can now understand how great wealth passed from generation to generation can perpetuate a business dynasty that can outcompete other companies not because they have better ideas or better products, but because their inheritance gave them such a huge head start that they can rest on the laurels of their ancestors and still roll in the dough—like the Ford family. Society is benefited when companies produce the best possible products; society is harmed when a glut of lackluster companies dominate the market so much that they crowd out startup companies that could offer better products.
I've met people who grew up sheltered in such wealth they didn't even know people got up in the morning and went to work! One man didn't realize this until he was drafted into military service. Imagine that: Becoming an adult without seeing a single person go to work!
“Zombies … do not seek alternatives or look for new solutions and always try to solve new problems using old recipes. They only exist.”
— Nelson Biagio Junior in Are You a Corporate Zombie?
UPDATE that manifests the exiguous common sense of the company and CEO alluded to above: Their best snowblowers once featured electric start powered by a battery — nothing great, but what you'd expect. Now their top models, pricier than ever, lack a battery, so to start them with the electric starter, you must plug them into a 120 Volt outlet. Stupid!
If omitting the battery was a good idea, automobile manufacturers would have done it decades ago, but there are compelling reasons to include a battery: to start the engine, just turn the key. With these new snowblowers, you must find an electrical outlet and extension cord, unwind the cord, plug the cord into the outlet and snowblower, start the snowblower, unplug the extension cord, then wind it up and put it away or risk tripping on it.
Wouldn't you rather just turn the frigging key?
Many people want, and others need, electric start snowblowers. They should be easy to start anywhere, not just in your garage or near your house, because snowblowers often clog and need to be manually cleared with the engine off. I often turn my snowblower off at the end of my long driveway to speak with the mail lady or my neighbor, move branches, etc. Or I might simply run out of gas thanks to an opaque tank, no fuel gauge, and unpredictable fuel usage.
Now this nitwit manufacturer changed their snowblowers so restarting in all those conditions will be impossible for some and an annoyance for others — if you pay for electric start, you should be able to use it instead of the recoil starter. This is the kind of idiocy that results when second-rate minds are born into families that give them a company to run. This one is being run into the ground.
I spoke with a dealer selling that brand who said some of their new models have engines made in China. I was surprised by how forthright he was in opining that this change and the silly new 120 Volt starter were evidence that this manufacturer was more focused on his bottom line, not what is good for customers. The dealer thought that Mr. Nepotism would eventually regret these shortsighted decisions when customers wake up. And they will.
“A's hire A's and B's hire C's.”
“If a business leader pretends that customer service is the top priority, but won't ever risk profits to delight a client, she's probably chosen to sacrifice tomorrow's customer for today's gain.”
— Joel Peterson, JetBlue Airways Chairman
A wise businessman once said that his best customers, and the ones he appreciated the most, were those who criticized his products because that gave him a chance to improve; his worst customers were the ones too apathetic to complain.
“Do not correct a fool, or he will hate you; correct a wise man, and he will appreciate you.”
— Author unknown
“Your most unhappy customers are your greatest source of learning.”
— Bill Gates
“Few better information sources exist than a customer saying, "I tried your product. I don't like it. Here's why." The smartest companies – positioned to thrive through the Transparency Revolution – treat this information like a five-course meal. They acknowledge the error, fix the defects, and start spotting opportunities faster than anything an inanimate survey can provide. And their buyers love them for it.”
— Tom Gardner in Should You Take the Ultimate Risk?
“Our default response in life is to experience inertia. In other words, our most common everyday process – the thing we do more often than anything else – is to continue to do what we are already doing.”
— Marshall Goldsmith, executive coach to over 150 CEOs
“After observing managers for 42 years at 15 companies, it became clear to me that managers often fail because they were never trained to manage. They get promoted into supervisory positions because of their technical or professional abilities, not because of any managerial competence or skills.”
— Steve Smith in The #1 Reason Why Managers Fail
Comment: Or they're born into the right family.
“You got some fast learners and you have some that ain't gonna never catch on.”
— DIRECTV installer, speaking about Mike White, Chairman, President, and CEO of DIRECTV, on Undercover Boss
Comment: That series has repeatedly documented how corporate leaders often struggle to perform basic jobs.
“[He] would be great standing in front of Walmart, shaking hands when they come in the door.”
— A Lucky Strike employee, frustrated by the ineptness of Steven Foster, co-founder and CEO of Lucky Strike Lanes, on Undercover Boss
“[He] didn't know what a ratchet was … He just seems like the type who would check out your groceries.”
— Sky Zone maintenance worker, speaking of Sky Zone CEO Jeff Platt, on Undercover Boss
Comment: Jeff Platt is actually smart, but like everyone, he has gaps in his knowledge. For example, if I spoke to an audience of college graduates with science degrees about permittivity, many of them wouldn't know what it is and just about everyone wouldn't understand it well enough to do anything novel and useful with it. Ultimately, that is why paychecks are much smaller than they could be and why our seemingly advanced world isn't filled with countless things that could make it phenomenally better. My job as an inventor is to fill some of those voids.
“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”
— Robert Heinlein (Wikipedia's Competent man discussion of this)
Comment: Should. And could, and much more, but humans have instead largely become masters at frittering away their time, aided and abetted by digital distractions such as computers, Internet, cell phones, iPods, videogames, and TV. The best way to enslave a man isn't to chain him; it is to entice him into chaining himself. The transistor and its progeny empowered us, then enfeebled us.
- Excerpts from 10 Signs your CEO is not that good: “#1: Ego over Outcome … #9: Active Dis-harmonics: Healthy friction is a good thing. Experienced and opinionated people coming together to hack out a better way of doing things is not only good, it’s excellent.”
- How to be Disagreed With as the Boss
- Who Gets To Tell The Emperor He's Naked?
- How To Connect With & Influence Any CEO
Comment: The “Any CEO” title is misleading; this article briefly explains how to connect with CEOs who are shining examples. A true “Any CEO” article would also explain how to connect with CEOs, such as one I spoke to, who pride themselves on being narrow-minded bigots and think they're qualified to disparage others not fortunate enough to be born into a family that gave them an international corporation to run.
- 5 Must Reads for Creative Leaders
- Book by Sheila Heen and Douglas Stone: Thanks for the Feedback: The Science and Art of Receiving Feedback Well (Even When It’s Off Base, Unfair, Poorly Delivered, and Frankly, You’re Not in the Mood)
- Wealth 'Poisons' Kids, Says Aussie Finance Tycoon
Comment: Indeed it does, and the pigheaded, close-minded CEO discussed in this article is proof of that.
- CEOs Tend to Overstay Their Welcome, Hurting Firm Performance, New Study Finds
- Strong Personalities Are Weak When Faced With Change
- 8 Surefire Ways to Demotivate Your Employees
Excerpt: “Not honoring creative thinking and problem solving. When employees take initiative to improve something—a company process or an individual task, for instance—don’t blow it off. Instead, take a good, hard look at their suggestion. Don’t ignore it, or you risk losing that employee’s creativity in the future.”
- Smart Organizations Should Also Be Stupid, According to New Theory
Excerpt: “We see functional stupidity as the absence of critical reflection. It is a state of unity and consensus that makes employees in an organization avoid questioning decisions, structures and visions. … Short-term use of intellectual resources, consensus and an absence of disquieting questions about decisions and structures may oil the organizational machinery and contribute to harmony and increased productivity in a company. However, it may also be its downfall.”
- Why Successful People Love Bad News
- Why Successful People Don't Become Very Successful
- CEOs who look the part earn more but do not perform better.
- Want better returns? Hire a good-looking CEO
- A Strong Bond to an Idea Makes Collaboration More Challenging based on Blind in one eye: How psychological ownership of ideas affects the types of suggestions people adopt
- Finding Good Ideas: How To Improve Product Development based on Exploring New Product Development Project Review Practices
- Identifying the Arrogant Boss based on Arrogance: A Formula for Leadership Failure
- Narcissistic Bosses Destroy Morale, Drive Down Bottom Line
- Employers Often More Interested in Hiring Potential Friends Than the Very Best Candidates
Excerpt: “Employers are often more focused on hiring someone they would like to hang out with than they are on finding the person who can best do the job …”
- How to Handle Your Insecure Boss based on Power, defensive denigration, and the assuaging effect of gratitude expression
- 3 reasons why every CEO should do their own customer support
- Lonely At The Top: Why Executives Need Sparring Partners
- Six Signs Your Boss Is a Coward