Several years ago, there was an article in the Business Insider publication titled “The 15 Worst CEO’s in American History.” Of the 15, four strike me as having particularly valuable lessons we can all learn from. Here they are, with these descriptions basically lifted from the Business Insider (BusIn) article:
- Most Innovative Geniuses Are Not Multi-Talented Business Leaders – Thomas Edison, the greatest inventor in US history, formed the Edison Phonograph Company with the hope of profiting from the phonograph technology he created. Edison himself ran the company through most of the years it operated. His invention was the ability to record sound on wax cylinders that unfortunately were very difficult to manufacture. Because of this, sales were limited. Unfortunately, had lost interest and was off to pursue his next batch of innovative ideas. In response to this design flaw, competitors, notably Columbia, designed and sold lighter discs, commonly called records. The Edison phonograph business was subsequently shut down.
- Overconfident, Charismatic Individuals Can be Very Dangerous – In 1986 Ken Lay became the CEO of Enron. As BusIn described it: “He presided over most of the company’s growth which was largely fueled by diversification into energy generation and its gas distribution businesses. Lay was so successful at marketing the firm to Wall St. and to the press that Enron was rated America’s Most Innovative Company by Fortune for six years in a row, from 1996 to 2001. It became clear in 2001 that Enron was hiding portions of its liabilities off its balance sheets. Also, most of its assets and earnings were doctored. By the end of the year, Enron filed for bankruptcy. In 2006, Lay was found guilty of securities fraud and other charges. He died shortly before his sentencing.”
- Beware of Putting a Person in Charge Who Has No Relevant Industry Experience – In 1983, Apple hired a CEO who was a marketing and sales genius from a giant consumer products company where he was President. His most publicized decision was firing Steve Jobs who was in charge of the Apple MacIntosh personal computer business which was really struggling. As BusIn put it, “This CEO lacked sufficient technical background to be a product manager at Apple. During his tenure, he heavily invested in a number of failed ventures, including Apple’s Newton, an early PDA-type device, cameras, and CD players. In 1993, his lack of technical knowledge regarding Apple’s and competitive products cost him his job. “
- Avoid Being Seduced by Your Past Successes – In 1990, Kodak was clearly the king of photography. Its film products where the underpinnings of the entire industry. Two risks were staring them in the face; lower-priced Fuji film and digital photography, a technology invented in Kodak’s own research labs. Film had been and still was the profit engine of the company, and that is where Kodak leaders put all their energies. The CEO at that time and into the early-to-mid1990’s was Kay Whitmore. His view was that Fuji was a low-level player going nowhere and digital was viewed as a distraction from keeping film, the golden goose, the key priority. He was basking in his past success and had no sense of urgency. Kodak slowly atrophied to bankruptcy.
Terrific lessons for all of us to remember.