Marx and the Corporations: Chapter 7 - The Management

These days, we have more opportunities than 25 years ago to participate in face-to-face or virtual events, teaching and debating about topics as management or leadership. It was more about books and articles in those days. Related to these topics, I would like to point out something interesting. Have you checked some speakers' resumes, such as content creators, influencers, inspirational speakers, current and former CxOs, etc.? It's pretty impressive! I've always wondered when they find the time to participate in all these events around the globe while simultaneously achieving the great things they've presented in their CVs. When I worked in corporations, I was connected to the business 24 hours a day, including weekends, and I always had my laptop with me, even during vacations. The accomplishments of these individuals are genuinely remarkable. And what about corporate CxOs? In addition to their daily responsibilities, they are invited to speak at events, write books, share their insights on attaining greatness, and write memoires about their significant decisions. It is indeed spectacular!

Now, changing the angle, let us look at some of the great mistakes made by the corporate CxOs across the last 20-25 years. I will not mention corporations like Enron or Lehman Brothers, but I will look into the strategies of some of the large IT companies without mentioning their names, of course. But they are well known.

One of the biggest mistake was a lack of vision and conservatism regarding Cloud adoption. Many CxOs of the most prominent IT players in early 2000 missed it, didn't invest, and didn’t consider it a potential goldmine. It was the same reluctance after 2008 when the private cloud took off. This explains the current ranking of the world's top cloud providers. Amazon is in first place with a market share of one-third of the global volume. Microsoft comes second with 22%, followed by Google with 11%, Alibaba with 5%, and Oracle with 3%. It is incredible to note that Amazon, founded in 1994, and Alibaba, founded in 1999, were not originally IT companies. Microsoft hugely invested and caught the train, specifically for Enterprise Cloud, which is weird also, in the last seven years, while Oracle in the previous two years. Acknowledging of being late in the Cloud game, other companies made massive investments in acquisitions, which still need to pay off. On top of that, some companies continued to invest heavily in hardware and on-site data centers, along with the services they require, even though the revenue for those offerings was declining abruptly quarter after quarter due to the increasing use of Cloud technology. Unfortunately, the CxOs failed to recognize this trend.

Cloud is only one topic, by far the largest, but consider others where companies invested massively and didn’t get a decent ROI so far from things like Blockchain, Robotic Process Automation, or even some particular AI initiatives.

Another mistake was the acquisition strategy and how the companies acquired were integrated within the giant corporations. The prices paid, the revenue, and profitability targets for the acquisitions business were utterly unrealistic, set at high levels to cover the big bonuses for the ones who lobbied and signed the deals. In MEA or CEE, these are called corruption; in Western Europe and the US, they call them lobby, discovery or integration bonuses. Irrespective of what one calls them, people use the cash for the same things: expensive cars, villas, and yachts. A significant difference versus a communist regime where all these, even used by the leaders, were not owned by them but by the Party or the Government. I am still deciding which one is the worst.

A common mistake was betting on your company's products while on the market there were other better, cheaper, more advanced, or broadly disseminated products. Instead of using, even promoting, and servicing what made sense and the customers wanted, some corporations continued to invest in their own obsolete and less marketable products.

Last but not least, from 1995 to 2010, there was a concept in management to rotate top managers irrespective of their primordial skill. An R&D manager moves to operations, an operations person to workforce management, a consulting manager to HR and so on. This movement created two problems: the poor performance could not be easily recognized and taken action against, and second, a group of people took control of the company for a long time. No fresh thinking, no new views and ideas. Practically, it is a similar model to that of communist dictatorships. Meritocracy was forgotten; leaders were tied with strings to their chairs and time to time changed roles at the organization's top. Most companies have dropped this model in recent years, with few exceptions where "rhinos” are still in charge of different verticals.

Somehow related, another mistake was the managers' nominations, specifically geography managers. According to their career path, to be promoted, bureaucrats were supposed to have exposure to management roles around the globe. So many large corporations ended up having Australians leading CEE business, South Americans or Western Europeans leading MEA, Americans and Canadians leading Western Europe, and so on, you get the picture. These assignments took 2 or 3 years, and the results were generally at most mediocre, definitely could have been better with locals. Who cares if one is changing jobs after two years? As a CEE manager, for example, after two years you hardly know the 20 countries within and their capitals. To succeed in business, one must understand the local culture exceptionally well and be accepted by the local companies and government officials. Who else knows better than locals? This is a controversial POV; I accept different opinions, though my experience with this mix of geographies approach is mostly negative.?

The bottom line is that these mistakes were made by those who come today to speak or write about their outstanding achievements. It is a bit cynical, don't you think?

My feeling was always that leaders are always born with certain qualities, while managers can be formed. Let's take a few examples of the formed ones.

A Country Sales Manager who, among other things, should have sold licenses for our product always kept with him a briefcase. We, his colleagues, were wondering and making jokes about what was in that briefcase. A client told us one day: the offer and contracting papers through his private company for a similar product owned by the competition. You see, the guy was not wasting time.

Another one is a manager who I used to work with. He was supposed to be fired by his boss and had even been warned about it. Fortunately, his boss was terminated before the firing could be carried out. In contrast, our boss remains firmly entrenched in the organization, serving as a bottleneck nobody is pleased to confront. Lucky for him!

One of the most intriguing managers I had ever dealt with was a guy who had written on his office door on paper the message: ”Do not even think to open this door." Only the Latin "Hic sunt leones” – “Here there are lions” used on the ancient maps part was missing. He used to suddenly disappear for days and days without replying to emails or calls, a tremendous blocker for the business and the few hundred people reporting to him. Not that it matters much, but he was an expat.

One can often encounter the habit of not replying to emails, especially when addressing high-level management in corporations. Such behavior indicates in my view a lack of respect or even of early education. In Romania, we refer to it as "missing the first seven years of early childhood." Any resemblance from your own experience? I bet you have.

While working on an ERP implementation, our company hired a manager who came directly from Saskatchewan, a frigid province in Canada, where he was responsible for an oil underground ducting pipes project. Not the most successful move.

As we discussed in the last chapter, bureaucrats must be promoted. Some have reached important roles, specifically in smaller countries or countries perceived to have problems. I have witnessed expats or even locals in certain CEE or MEA countries appointed to CxO roles only to harm the business but be very vigilant. During their tenure, the revenue declined by double digits, but in exchange, they initiated multiple internal investigations to keep the staff occupied.

I will recount now the story of an “ideal” top manager. Since birth, our protagonist has always had a silver spoon in his mouth. A fairy godmother blessed him always to be a boss, and he has never known poverty. He has a consulting background and quickly progressed to management roles. His performance has been mediocre, yet his goals were always high and ambitious. The leading quality that set him apart was that people feared him. He was a bully who intimidated his subordinates. Whenever his name was mentioned, an awkward silence would ensue. At corporate events, he would eat quickly and alone at a tall table, as if he had single-handedly vanquished all his colleagues, then rush back to his work, which he always deemed more critical. He would always initiate an extensive transformation program upon being appointed to a new role, using it as a convenient excuse. Everybody knows business is complex when transforming organizations, and one cannot improve the results or reach the targets. After a few years in a role, he may take on a new position that is higher in the hierarchy, therefore beginning another transformation initiative. This process may continue until he reaches the very top of the corporation, moving from one transformation to the next. While it may seem simple, it can be a complex and challenging journey. Well, one needs some promoters and a good use of the network, which we will debate in a future chapter. Do any individuals within your company come to mind while reading this? I bet they do, as it is not about me!

Do not get me wrong, I met and worked with brilliant managers over the years. They exist in large numbers in many corporations, but today, I preferred to mention only a few examples of the lousy ones – just for fun!

Next week, a new chapter will be 8. The KPIs.

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