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by hookahboy
652 days ago
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You've totally missed the point of the article - the failure is not idiosyncratic to any one CEO or to an individual manager's failure, it's the result of incentives that put these kinds of CEOs in charge, who then single-mindedly work towards a particular goal - please short-term shareholders. It is very much a theme. |
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The timeline of expiry of these patents and the cutting of what appears to be non directly profitable activity of science/r+d can run 30+ years.
The bigger the pipeline, the longer the demise, potentially.
Jack Welch got rid of the 1% who achieved expected results in unexpected ways, but these people were the innovators that gave the company its life blood.
Immelt inherited a bad deal with an engineering company that had turned to making financial transactions to generate pseudo wealth, rather than innovative ideas. Maybe could have done more, or differently, but Jack Welch well and truly started the spiral with a short sightedness that prevented him from seeing the horizon, distant though it was.
In the west especially, people of purported financial management skills rarely are able to see past the next annual report, partly because that is how they are trained and partly because shareholders have too much power.
As recently as Dave Packards day the employee was catered to before the shareholder - I don't believe HP would have ever contemplated a dividend in the same year as lay-offs, but now the unsecured creditors, the shareholders dominate managements concerns.
The system is as much to blame as the individuals and has created perverse incentives that are a slippery slope to climb back up from.