This week I’m introducing a new category of posts to my blog.

These entries—which I’ll group under the heading “Unconventional (mis)management non-wisdom”—build on an observation I first made in a post titled: “Is nothing sacred?

In that post, as you may recall, I offered examples of CEOs and/or successful businesspeople who either did not fit the mold of the stereotypical CEO or manager, or did not act in the way we might expect one to.

Importantly, however—and as I was careful to point out—they did so with no apparent cost to their organization. (In fact, in some cases it seems to have actually contributed to their success.)

For instance, I offered examples of successful CEOs, company founders, and other executives who:

  • …had no coherent vision for their company when they started it (Hewlett-Packard and 3M)
  • …lacked charisma (Douglas Conant, formerly of Campbell Soup)
  • …had little or no confidence in their product (Paul Allen of Microsoft)
  • …don’t bother adhering to budgets (Charles Koch)
  • …dismissed the idea of setting goals (Ray Kroc)
  • …weren’t really all that hard-working (Andrew Carnegie)

I even found a couple of CEOs who:

 

Weird, right?

Well, just to be clear, it wasn’t my aim then—nor is it my intent now—to suggest that these CEOs don’t know what they’re doing. Quite the contrary, in fact.

Nor is it my hope to convince you that these business “mavericks” are the smart ones, and everyone else is wrongheaded or misinformed.

Far from it.

Instead, the point I’m trying to make is simply that for each and every pearl of management “wisdom” that you might come across, or have otherwise come to believe, there exists an equally convincing argument for behaving in precisely the opposite way, or engaging in precisely the opposing action.

(To find out more about why this realization is so important, and what that says about “good management” and its practice, please see my post: “It’s not what you do. It’s when you do it.”)

Alright – that’s enough preamble. Let’s get to this week’s example:

 

  • In their book, What (Really) Works: The 4+2 Formula For Sustained Business Success (2003), authors William Joyce, Nitin Nohria, and Bruce Roberson argue that one way for a company to encourage talented workers to “stick around” is to make them eligible for stock options. The aim, they contend, is to make “the employees feel like owners, operators, and independent agents.”[1] This is not by any means a novel idea; many companies offer stock options or profit-sharing to their employees[2] – presumably to encourage them to work harder (and pursue the organization’s broader goals, instead of their own self-interests) as well as convince them to hang around longer.

And so in light of this, it is interesting to hear Phil Knight (the former CEO of Nike, and current chairman of the board) explain in a letter to shareholders how Nike’s employee stock option program was responsible for the loss of key people at the company:

“This has been one of the problems. We have lost experienced people for whom the stock option program has created lifetime financial security.”[3]

 

See you next week.


[1] Joyce, William, Nitin Nohria, and Bruce Roberson. 2003. What (Really) Works: The 4+2 Formula for Sustained Business Success. New York: HarperBusiness, p. 35.

[2] Google, Facebook, and Apple, for instance.

[3] Letter to shareholders, 1998 Nike Annual Report. Full excerpt from that letter: “This has been one of the problems. We have lost experienced people for whom the stock option program has created lifetime financial security. Add that to the incredibly competitive nature of our industry and you’re going to see key contributors leave for other challenges. This is an insight I think the media has missed this year. I can honestly tell you I hope we have that problem again. We won’t spend any time trying to fix that one.”

http://s1.q4cdn.com/806093406/files/doc_financials/1998/letter_ar.html. Retrieved May 26, 2016.