July 31, 2008 6:05 AM PDT

What to do when the executive has no clothes

Posted by Steve Tobak
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Technology executives are notorious for their out-of-proportion egos and hot-headed tempers. Michael Dell, Larry Ellison, Bill Gates, Steve Jobs-- even Andy Grove--are all members of a long list of distinguished high-tech executives who are famous for not suffering fools lightly, among other things.

But what happens when they're the fools? What happens when a high-powered executive has his head up his you-know-what and has lost all sense of objectivity? What happens when a gutsy employee speaks up? Well, in many cases he gets his head chopped off for his trouble. In shrink speak this is called transference, which in this case means unconsciously taking one's own feelings of inferiority and guilt out on another.

Given a choice, the vast majority of people would rather forgo the whole decapitation thing rather than declare that "the emperor (or should I say executive) has no clothes." Not surprisingly, this phenomenon is rampant in the technology industry.

So, what should you do when you come across this kind of thing? I'm not talking about ideas that sound good at the time and later turn out to be real bombs. If you don't wipe out from time-to-time, you're not taking enough risks.

I'm talking about ideas that are so obviously dumb that half the company must be wondering what the exec-in-charge was smoking when he came up with it.

(Credit: Dell)

Case in point: Dell's second foray into the crowded MP3 market. If everyone who e-mailed me this morning can see what a bad idea it is to go up against Apple's lethal iPod-iTunes combination, not to mention all the other MP3 players and services out there--a second time, no less--you'd think somebody would have pointed that out to whoever's in charge of this product line at Dell.

Yeah, I know, it's different this time. It's cheap, it's an end-to-end solution, yada, yada. Give me a break. I still think it's a dumb idea. And I'm sure that lots of folks at Dell think it is, too, but they're afraid to speak up.

I've worked with quite a few CEOs who, let's just say they didn't take criticism of their ideas or methods all too well. Come to think of it, I don't either. What can I say; at least I admit it.

My favorite example: When microprocessor-maker Cyrix launched its long-awaited Pentium competitor--the M1 aka 6x86 processor--CEO Jerry Rogers actually priced it higher--that's right, $1 higher, to be exact--than Intel's comparable chip. Then, when he couldn't get any PC-makers to bite (I wonder why), he decided to launch a Cyrix-branded PC to show Dell, Gateway, and Compaq what they missed.

Let's see what other examples of this kind of thing I can come up with off the top of my head.

Motorola somehow thinking it could just milk the RAZR design--even after everyone else had done the thin thing and moved on--in a market with product cycles shorter than the lifespan of a tic.

Intel's failed multibillion dollar foray into the communications market. Maybe that wasn't so obvious, but I called it and I'm sure I wasn't alone.

(Credit: Gateway)

Then there were Gateway's thousand and one desperate ideas to revive the failing company: the Gateway stores; shutting down its international business; the move into consumer electronics; Ted Waitt's silly ads; rebranding the company twice; and relocating its corporate headquarters not once, not twice, but three times.

Anyway, there must be zillions of examples of this kind of thing. If you can't speak up to your boss, at least do it anonymously for CNET's readers to enjoy.

Last word
In all seriousness, you make your own decisions and then you live with the consequences. In my experience, life is too short to let your company go down in flames because you're afraid of a little abuse. Besides, dysfunctional executives typically appreciate employees who aren't afraid to speak their minds, even while they're cursing you up one side and down the other.

What if you get canned for it? That's their loss, not yours. Besides, then you get to use one of my favorite lines: "I've been fired by better people!"

Steve Tobak is managing partner of Invisor Consulting LLC. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure.
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Add a Comment (Log in or register) 16 comments
by benjwah July 31, 2008 6:31 AM PDT
I'd file the MP3 player under "wipeout from time to time" - It's not gonna sink the company and it's a risk but in the (almost inconceivable) scenario that they became a half-decent player in the market, that very same executive will be paraded through the streets of Dell town for all the villagers to praise.
My money however, would be on a somehow simultaneous quick AND slow death. Like a car crash, it happens in an instant, but it will seem to observers to be in slow-motion.
Reply to this comment
by mkesterco July 31, 2008 6:38 AM PDT
Every time I my ex boss was (majorly) wrong and I made a point of it... he fired me. He would calm down, call me, beg me back, give me huge raise (20+%) and the cycle would start over. After the 5th time, I wouldn't go back... instead I demanded a contract labor position that paid more for less work.....
Reply to this comment
by toddbernhard July 31, 2008 6:50 AM PDT
Just vote him and his party out of office.
Reply to this comment
by twolf2919 July 31, 2008 6:59 AM PDT
A couple other good examples: 1) the CEO of Sony dismissing the Nintendo Wii as a "niche market product"....never mind that it's outselling the Sony PS3 by a 3-to-1 margin.
2) Palm's introduction of the Foleo - a device that performed almost no useful function without being tethered to a Palm cell phone. Everyone, including analysts, the general public, the press thought it was a ridiculous idea. But either through the hubris of the CEO or him paying homage to the guy with the idea (the inventor of the Palm itself), the product got produced....and promptly canceled.
Reply to this comment
by evilned July 31, 2008 7:11 AM PDT
I have two words.

Palm
Folio

:)
Reply to this comment
by SnidleyWhiplash July 31, 2008 11:47 AM PDT
You don't even need the second word. "Palm" all by itself is enough of an example of an entire company built on not doing anything new, and being quite proud of it.
by Ted Todorov July 31, 2008 8:07 AM PDT
" 1) the CEO of Sony dismissing the Nintendo Wii as a "niche market product"....never mind that it's outselling the Sony PS3 by a 3-to-1 margin."
Obviously he hasn't learned a thing, as he just called Apple "a boutique company". Has he compared the market caps of Apple & Sony lately?

As for Dell's new MP3 player, with Rob Enderle on board as a consultant -- the train wreck should be impressive.
Reply to this comment
by DigitalFrog July 31, 2008 10:41 AM PDT
Not a tech company, but I remember when Triaminic came out with ads for non-drowsy children's cough syrup. Non-Drowsy??? they missed the whole point!
Reply to this comment
by Renegade Knight July 31, 2008 11:56 AM PDT
Convergence demands that you be able to deal with MP3's. Maybe they make it this time. Maybe they don't. The fact is that while the crappy MP3/PVP player market is crowded, the good MP3/PVP player market isn't.

My Archos is pretty good comparied to what's out there. It's outright crappy compared to it's own potential. That's pathetic, and it opens the doors for another player.
Reply to this comment
by juchestyle July 31, 2008 12:26 PM PDT
I once heard a vice president in front of the entire IT department say "I don't know why we need a data ware house, I can pull all of my reports manually in under 30 minutes."

What a tool!
Reply to this comment
by cheezr July 31, 2008 7:23 PM PDT
if you work for the executive, keep your resume up to date and keep your mouth shut.
if you dont work there, enjoy the show!
Reply to this comment
by RicRoe August 1, 2008 8:25 AM PDT
One current example... eBay where newly appointed CEO John Donahoe has thrown out the script that helped build the brand into a billion dollar global marketplace by providing casual sellers a platform from which they could list and sell unwanted items.

Millions of people earned small incomes to supplement incomes.The site grew as casual sellers began expanding from selling unused household clutter to actively seeking merchandise to sell for profit.

Now Mr Donahoe is instituting new policies aimed at squeezing out these small casual sellers and replacing them with mega sellers.

Case in point in buy.com which is not listing half a million items on eBay. The problem... buy.com has a sell through rate of less than 3% on eBay, indicating the products being offered are flopping and may be indicative of the fact that eBay buyers have no interest in new merchandise which is already available elsewhere on the web.

Mr Donahoe has instituted policies which have pushed sellers off the platform such as fee increases, feedback changes, biased seller ratings, and non functioning default search methods.

Mr Donahoe has allowed buy.com to place millions of listings at zero costto list, while charging allother sellers listing fees then lowering the paying sellers listing visibility.

As CEO, Mr Dopnahoe has shown a clear lack of understanding his customers and has succeeded in alienating buyers and sellers alike as he hangs the future of his company on the mega seller concept.

When it proves a failure, the alienated buyers and sellers will already have found new homes, and will be unlikely to return to eBay, preventing them from sucessfully reversing course.

Talk about a CEO that is out of touch, the best example is happening daily over at eBay. Look quick, if they stay their present course, they may be the next Enron.

It is unlikely that eBay will be able to rebuild if Mr Donahoe is wrong
Reply to this comment
by SooperGenius August 1, 2008 9:36 AM PDT
How about the Big 3 automakers that waited until early this summer (THIS SUMMER!?) to shutdown SUV production. With the dollar low, think of how popular an American made high MPG car might be about now.

These guys get $M for what?
Reply to this comment
by bobkatdell August 1, 2008 1:12 PM PDT
Companies change---people change, times change and in order to succeed in business, we have been listening a lot. Hopefully some of the changes you have seen to date are indicative of things to come: delivering to consumers personalized technology and experiences that make the new digital life better. In that respect what you are referencing is not simply another Dell MP3 player it?s about delivering an experience where customers can receive multiple sources of content on multiple devices.
Reply to this comment
by jabailo August 1, 2008 3:22 PM PDT
The next "bubble" to burst should be the high pay of these "Super Execs" who end up losing billions for investors with nothing to show. Vista? A nine year slide in stock price from $60 to $25. How do these guys get away with it?
Reply to this comment
by Hit_BY_A_Train August 3, 2008 8:52 AM PDT
Anyone interested in watching *The Emperor* strip (in real time) needs to go to the discussion boards at eBay! Click on *Seller Central* and watch the train come down the track!
Reply to this comment
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About Train Wreck

Steve Tobak is a marketing consultant and former chip industry executive. Train Wreck provides insight into dysfunctional corporate behavior, among other things. When he's not airing the industry's dirty laundry, Steve likes to hang around the house, make believe he's working, and drive his wife crazy. Find out more at www.invisor.net or email Steve at trainwreck@invisor.net. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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