I think the fact that so many CEOs got it wrong is actually an argument for why the shouldn't be fired.
If one or two CEOs got it wrong, you could argue that they were incompetent, ignorant, or greedy and they should have been better informed because plenty of other CEOs were. Everyone getting something wrong says to me that the failure wasn't down to individual mistakes and there was something larger at play.
If your CEO is a lemming, they are not capable of leading a company. They should be fired.
If you want to see a real leader, look at Tim Cook. He made decisions based specifically on where the company is, where it's going, and already factored in external factors (such as the pandemic growth). Contrast this to dozens of other "CEO"s who made a horrible decision hastily, executed layoffs horribly wrong, and then vaguely blamed a pandemic. The exact same lazy gameplan because these CEOs cannot lead, might as well replace them with chatgpt, maybe they'll write better layoff emails.
As a reminder, the CEOs core role is to steer the company. When that ship slams into an iceberg, you have failed your core role. What happens when workers fail their core role?
I think that's a bad take. Tim Cook is arguably the best CEO out there right now. Saying all CEOs should just do what Tim Cook did is like saying all swimmers should just be more like Michael Phelps.
> When that ship slams into an iceberg, you have failed your core role.
I agree with your line of thinking, but I don't think any of these companies failed in their core role. Looking at the FAANG companies, stock prices are down a bit, but none of these companies are on the verge of collapse and all are still market leaders in their respective areas.
Hell, for all we know, this could have been the plan all along. Hire a bunch of people while interest rates are low and let them all go when interest rates go back up. I realize that layoffs are not a good thing and they affect real people, but the reality is that they are not a sign that a CEO is failing in their core role.
> What happens when workers fail their core role?
It depends... If I've got one employee on my team who continually fucks up our deploy process causing outages. Yeah, they probably need to be fired. If every developer on my team fucks up our deploy process causing outages, then issue is probably that our deploy process is bad and firing people isn't going to fix anything.
The consequences of all swimmers not being like Michael Phelps are significantly lesser than the CEO example to the point that I don't think this comparison could ever be a fit one. If a swimmer swims more slowly, big deal, nobody cares. If a CEO makes bad decisions people's lives can be uprooted. There's a key difference here.
> If a swimmer swims more slowly, big deal, nobody cares. If a CEO makes bad decisions people's lives can be uprooted. There's a key difference here.
You've completely missed the point of my analogy. If you compare everyone else the the person who is the best in the category, then everyone else will pale in comparison. Using "You're not as good as The Best" as a reason to fire someone is stupid since there's only one person who can live up to that bar.
I absolutely did not miss your point. I don't think everyone needs to be the same as the "best". I do think that when we operate an economic system we need to have a certain level of quality in important positions-- one that has not been met. This isn't a game and our lives hold more weight than a swimming competition.
I'd much rather eliminate scarcity and the need for people to have a job to provide their basic needs. Accomplishing that is even more difficult though
I can appreciate your point, but you have to also consider that a characteristic of Apple is the sheer size of the business. Apple can afford to be more conservative with their business plans because they can weather storms more readily.
If Apple failed to plan for a huge economic event that let competitors gain some ground, they can survive that misstep because they have such a huge moat. Conversely, if Apple did over-hire, they can also survive that climate due to their size and stay the course while others falter.
If you're captaining an ocean liner (Apple) you don't worry too much about 5-10' seas and 10 knots of wind. If you're captaining a 50' yacht (eg. all the mid-sized SaaS businesses announcing layoffs) you definitely pay attention to that sea state.
Why would Meta have needed to either though? Or really Alphabet, Microsoft, Twitter, or a bunch of other companies? Maybe a handful more people to deal with scaling issues on products specific to pandemic needs, but the pandemic was always going to be temporary. They hired heavily in excess of just pandemic related concerns, it was more about expecting a paradigm shift. (Even now they almost all have substantially more people than before the pandemic though ,so you could argue it is less an error of type and more an error of magnitude)
Or maybe there just wasn't enough information to make an informed decision and the safest thing to do in that situation is just stay with the pack.
It's like if someone asked you to open a car dealership in a town you knew nothing about. The safest thing to do is just pick the area where all the other dealerships already are. You don't gain a competitive from doing that, but you also ensure they don't either.
It's not the ideal strategy, but doing what everyone else is doing so you don't fall behind makes the most sense some times.
I could see an argument for locally rational in the same way that no one gets fired for using IBM, but it's usually pretty clear to the lower level employees that something isn't right. Middle management and lower level employees all knew the economy was messed up, it's hard for me to conclude that the C*O's don't rationally know the same thing.
> You don't gain a competitive from doing that, but you also ensure they don't either.
In fact, you may gain a competitive advantage from doing the opposite of the herd if the herd is about to run off a cliff.
Wasn't the subprime mortgage crisis similarly caused by an entire industry engaging in practices simply because "that's what everyone else is doing"? Wasn't the irrational exuberance of the dot-com bubble also propped up by groupthink? Why can't bad decisions be called out for what they are and not be excused as rational economic behavior?
> Why can't bad decisions be called out for what they are and not be excused as rational economic behavior?
My point is that we only know it was a bad decision after the fact.
The economy is incredibly complex and anyone who tells you they can consistently predict what comes next is lying to you or lying to themselves. Even experts who dedicate their lives to studying economics get things wrong regularly. Calling for a CEOs head because they failed to predict something that pretty much everyone of their competitors also got wrong seems stupid.
To be fair, I think the culpability of CEOs has to be balanced with the corporate boards that appoint them and give them direction, and the major activist shareholders who were the ones who gave them marching orders to the tune of unrealistic growth targets into a volatile skewed economic situation in the first place.
But the point is when everyone gets something wrong, there should be time for at least reflection and steps to remediate such a mistake from happening again in the future. Just saying the "economy is complex" is no excuse. If anything, it is defeatism.
> there should be time for at least reflection and steps to remediate such a mistake from happening again in the future
I agree with you there, but when almost the entire industry got something wrong, I don't firing your CEO does anything to prevent that mistake from happening again. If you ask yourself, would it be reasonable to believe another person would have done better in this situation, I don't think the answer can be "yes" when pretty much everyone got it wrong.
Maybe the shareholders should stop and reflect upon whether their expectations of exponential growth, even in a booming market, especially in a booming market propped up by abnormal conditions, are reasonable. Because sure they lose money but they're not losing their jobs.
If one or two CEOs got it wrong, you could argue that they were incompetent, ignorant, or greedy and they should have been better informed because plenty of other CEOs were. Everyone getting something wrong says to me that the failure wasn't down to individual mistakes and there was something larger at play.