Every Halloween children (and no small number of adults) go to great lengths to look like zombies, vampires, witches, superheroes and so on. However, a group of real monsters lurk year-round in the upper echelons of corporate management, terrifying investors with their ineptitude and, paradoxically, selfish cunning. (Corporate management isn't the only scary thing going this Halloween; read 5 Horrific Things That Can Haunt Your Finances.)
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The Shape Shifters
Some monsters are human by day and beast by night, like werewolves, but a Jekyll and Hyde CEO keeps a company in a state of constant uncertainty by shifting between man and monster at random. Jekyll and Hyde CEOs are not all bad. In their more volatile moments, they are more likely to make the deep cuts or the dynamic changes needed to go from a stagnating operation to new areas of growth. Many such CEOs have been found in the tech sector with the label applied to Larry Ellison, Bill Gates, Jeff Bezos and others. However, too much Hyde and not enough Jekyll can lead to fragmented corporate strategies and implementation, as plans are altered on a whim.
The Mad Scientists
Dr. Jekyll was, of course, one of the famous mad scientists in literature, along with Dr. Moreau, Dr. Frankenstein and many others. Driven by dreams of pushing boundaries and ambitions that earned them the labels of megalomaniacs, these men achieved great and terrible things. In the management world, there are many mad scientists who have taken an idea from paper to a working corporation - in fact, a little bit of madness seems to be required even to take on the job.
Again, the tech sector fields many of the most recognizable candidates, but a likely frontrunner would have to be Steve Jobs. Jobs' ability to micromanage, terrify and burn out employees is only matched by his grandiose vision for Apple and its products. Now that the iPod, iPad and iPhone have all been such smashing successes, we can recognize his genius. But be honest, many people reacted to the initial rumors of Apple's entry into the smartphone market as they would have if Jobs had announced his intentions to turn all Apple's resources to reanimating dead tissue with lightning. I just wish he'd quit cackling every time an iPhone is sold. (Learn more about Jobs and his management style in What Would Jobs Do?)
The Invisible Man
Although technically another mad scientist from the literary world, his crowning achievement was to make himself unnoticeable. Unfortunately, this type of management monster is far more widespread than any other - CEOs who go on collecting their sizable paychecks without making any noticeable impact on the company.
One of the most painful things about the upwards trend in CEO compensation is that many CEOs of middling to no talent are getting paid superstar wages just because that's where the market is and the fat cats know it. There are many responsible and competent CEOs who keep a low profile (and usually low compensation). That said, there are many CEOs - particularly in maturing industries - that keep a low profile until their compensation review comes up and then go right back to being invisible when the new contract is signed.
Nobody likes the idea of an advanced civilization out in the galaxy, especially when they appear - at least in popular accounts - to have an unhealthy obsession with probing. The management equivalent, the alien CEO, is so named for being an outsider brought into companies that have traditionally filled the top positions with executives who came up through the company's corporate ladder.
An alien CEO is a good idea in theory, coming in with fresh ideas and no ingrained assumptions that build up in any corporation. However, the outside solution rarely lives up to the hype for that exact reason - a failure to fully understand the corporate culture. Often these CEOs come into the company with huge compensation packages loaded with incentives and undertake the harsh cuts needed.
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Even if these changes are badly needed, resentment naturally builds as the employees see their friends lose jobs as the alien CEO reaps huge bonuses. For this reason, many alien CEOs have a short stay at the top. An excellent example is Robert Nardelli at Home Depot. He came in and met all his goals and more, but was forced to resign (with a golden boot of more than $200 million) because his management style clashed deeply with the corporate culture that made Home Depot a success in the first place.
The undead who feast on human blood have enjoyed a pop-culture resurgence in recent years. Their management counterparts have never waned. The vampires of management covers the broad scope of executives that, unsatisfied with a paycheck equal to the GDP of some small nations, begin to tunnel wealth out of the company through family and friends. (Learn more about the vampire pop-culture resurgence in The Big Business Of Vampires.)
Awarding bids and contracts to companies owned and operated by family and friends is not in and of itself illegal - so long as the best price is sought for the services. Obviously, the potential for abuse is staggering. In recent memory, CEOs have hired children as million-dollar consultants and advisors, awarded contracts to companies they wholly-own and thrown their spouses lavish parties with statues dispersing vodka from their nether regions. A list detailing the ways that vampiric CEOs can suck a company dry is too long and painful for most shareholders to bear.
When the Halloween costumes are washed, folded and put away, the monsters of management will still be prowling Wall Street. Not all of them are bad, much in the same way that the Frankenstein monster wasn't inherently evil. Some, like the mad scientists, the aliens and the Jekylls and Hydes can give a company the push it needs to create shareholder value. Others, specifically the vampires, are best left in the crypts when discovered - or else their actions will one day haunt your portfolio. (For related reading, take a look at The Ghouls And Monsters On Wall Street.)
For the latest financial news, see Water Cooler Finance: Ghosts Of Economies Past.
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