The Insulated Executive

I’ve worked for and with many large companies that began to rot from the inside, and a distinct pattern has emerged. What’s more, this same pattern can be observed in politics, and is arguably one of the primary causes of national decline. The path I’ve seen so many Fortune 500 companies take is eerily similar to the one our country is on. President Trump’s actions can be explained by examining the natural progression of any large organization.

In the early days of a company’s founding, the chief executive is very present and aware of all the day-to-day activities. He can’t afford not to be, when every dollar counts and each day must be squeezed for maximum value.

The founder typically knows the names of all employees. He makes the rounds and talks to them. He holds all-hands meetings and communicates with each worker. He talks of his open door policy, where anyone can come see him about their concerns or suggestions at any time.

During these days the company feels like a real team, with everyone pulling together under a common purpose to accomplish something bigger than themselves. The company starts racking up its first major successes, and it energizes and motivates the whole team to keep becoming better and better. Lackluster employees are easy to identify and weed out, because there isn’t anywhere for them to hide.

As things progress and the company keeps growing larger and more financially successful, some changes begin to occur.

New layers of middle management are brought in, usually with pedigrees from well-known universities or competitors. They didn’t take part in growing the company from its infancy, but they still act like they are the most valuable players, there to take the steering wheel from the rubes who built everything, and steer the company in a new direction.

After the new managers, comes the assistants. Every manager wants to create his or her own personal fiefdom by hiring as many assistants and paper shufflers as they can. Under their logic, anyone they directly hire will become like a servant to them, beholden and indebted for the opportunity to work in their department.

This results in a large layer of totally unnecessary workers who are mainly there to boost the egos of the management and do all their busy work for them. These extra hands become idle and begin searching for ways to make themselves more relevant, which leads to the next stage.

Policy changes, new departments, human resources, team-building exercises, meetings, more assistants, consultants, business travel, inclusion mandates, rule books, diversity seminars…these are all the signs that the original company has been subsumed by corporate clones who are more interested in feathering their own nests than in continuing the financial growth trajectory and increasing profitability. They have nothing original or innovative to add to the company, so they fall back on the bureaucratic busy work that they believe makes them look important and useful.

An increasing number of women and minorities are hired to fill these non-critical positions. Their principles seem to be different. They are more concerned with petty power games and self-aggrandizement than with providing value. They only hire other women and minorities for the best jobs. They seem obsessed with office politics, playing games of favoritism and grooming a field of supplicants. They hold grudges and enjoy punishing those who don’t demonstrate sufficient fealty to them. The guy who just keeps his head down and works hard all day is accused of not being a “team player”, because he doesn’t enjoy wasting time in pointless meetings.

With all these changes the corporate structure begins to resemble a more pronounced pyramid. Instead of everyone being on the same team and each job being just as important as the others, a hierarchy is formed on the basis of credentialism rather than productivity. There is a large base of workers who handle the daily workload, doing everything required to fill orders and serve customers. These people are on the very bottom, with the lowest pay and the least respect. They are seen as expendable and replaceable, even though they keep the gears turning. The company would not be able to function without them, but it could function just fine without the HR department, the marketing assistants, and the Chief Diversity Officer.

The middle of the pyramid is formed by the new managers and all of the extra people they brought on board to fluff their egos. They insist that they are indispensable and that without their special brand of witchcraft the company would be flopping around like a dying fish. They command exorbitant salaries while contributing very little to the financial bottom line. With most of them, it would be very difficult to describe what they do in terms that a child could understand.

And above all this you have the C-Suite executives and the CEO/President/Founder of the company. Something has changed with the CEO. In the early days, he seemed more energetic, happier, and much more down to earth. He would eat lunch in the break room with the rank and file workers, and ask them how their day was going. He would make the rounds and touch every person on the line with his personal warmth. People had the feeling that he actually cared about them, that it wasn’t just a phony act.

But now, he seems more tense, more reserved, more troubled. The pressures of running a fast-growing company have caught up with him. The unrealistic demands from the investors weigh heavily on him. The constantly-expanding workforce generates more complexity for him to manage. His newfound wealth and power has gone to his head and inflated his ego. Where he used to talk about how none of this would be possible without the dedication of every single team member, he now congratulates himself on his amazing business acumen, forgetting about the lower levels that hoisted him up to that high perch.

The executive has now all but ceased communication with the base of his pyramid, except through intermediaries. It’s the middle managers who control all the daily activities, and they filter information up to him with their own set of priorities. The middle managers have one overriding concern, which is to make themselves look good and cement their job security. If anything is going wrong, they can choose from any number of lower workers to place the blame on. If things go right, they are first to take full credit for themselves.

As the executive drifts further away from the ground-level realities of his company, he takes more and more meetings with his “trusted” management and advisory staff. All of them are eager to outdo each other with tales of how wonderfully their department is doing, while none of them have the courage to sound the alarm on serious threats to the company’s long-term stability. A false picture emerges, where everything is rosy, the employees are all as happy as can be (except for the bad apples who won’t kiss up to them), and the customers have never been more pleased. The future is bright and there is nothing to worry about, so long as you keep paying our wildly inflated salaries so we can read our crystal ball for you. The executive starts making decisions that favor his managers rather than the rank and file workers. After all, he needs to keep them happy because they are so hard to replace. The worker bees are a dime a dozen.

Something quite different is happening in the lunch room and the factory floor. A growing chorus of grumbling and resentment is taking hold. Rank and file workers feel more and more isolated and deprived of the success they helped build. They watch as their useless managers steal all the credit for their own hard work. They see the shiny new cars that the overpaid bosses drive to work, while they can barely afford to replace the water pump in their 15-year-old beater. They see long-time friends and co-workers either quitting for better opportunities, or being fired for petty infractions. They eye the circle of suckups that the manager has surrounded herself with, who don’t get anything done but play politics all day. They recognize that the very best people in the company are all gone because they couldn’t abide the flood of incompetence and pettiness that took hold.

The morale is sucked out of the organization, little by little. The core values and mission statement of the company become murkier. Open communication has been replaced by rumors and shadowy conspiracies. Departments become competitive, rather than cooperative, with each other. Over time, most of the base workers have been replaced. The new breed doesn’t have any sense of the sacrifices and hard work that it took to bring the company up to its current level of success. They have no real sense of loyalty to the founder or the business, they are just there for the paycheck. The old friendships have dissolved, replaced with top-down management by out-of-touch narcissists. Most of the middle managers don’t have any idea how to do the jobs of the people they manage. They don’t know how to properly evaluate the work being done, so they fall back on what they know and reward the ass-kissers who talk a good game.

Company communication becomes like a game of telephone. Vital information rises from the all-seeing eyes on the ground up to the middle managers, who don’t know how to properly interpret it. They put their own self-serving spin on it before passing it up to the C-Suite, who in turn filters out anything that might arouse the President’s suspicions. By the time any one piece of knowledge reaches the ears of the Chief Executive, it has been so perverted and distorted as to be worse than useless.

The Founder begins to spend his days daydreaming about cashing in his chips and spending more time at his lake house, fishing and barbecuing. He longs to leave behind the pressures of running a growing concern, answering to all the investors, bankers, accountants, and hangers-on. It’s no longer fun, it has become a grind. He starts deferring more important decisions to his vice presidents, while he eyes the exits looking for a graceful way out. Eventually, somebody shows up from a hedge fund or a foreign investment bank, and offers to buy the founder out at a very attractive price. By that time, the decision is easy. He is grateful for the chance to make his escape before things really start falling apart. He takes the money and runs, but not before delivering one last speech to the employees. Only this time, he hardly recognizes any of the faces peering back at him. Many of them look like foreigners, and most have a sort of blank, lifeless expression. He can see that they are bored, that they don’t care what he has to say, and that they are just counting down the hours until quitting time. It’s all over but the ding of the timeclock as they wearily punch out.

 

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