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The CEO is the Most Confident Man in the Company

Posted by Bob Warfield on November 5, 2011

I heard somewhere that one definition the Navy has of a ship’s captain is that he is, “the most confident man on the ship.”  A CEO could be similarly defined.

Why confidence as the defining quality for these leadership roles?

It’s because these roles will ultimately have to deal with leadership in the absence of data.  A lot of folks, particularly those from the engineering disciplines, view decision-making as a matter of waiting until there is enough data to make the decision obvious and then making it.  Unfortunately, leaders frequently have to make decisions absent sufficient data.  To be clear, another role of the leader is to make a determination whether the necessary data for a good decision is “tragically knowable“, but if it isn’t knowable, they still have to lead.  They can’t afford to heave to in the information doldrums and wait it out until inspiration strikes.

I’ve been thinking about all this after reading a series of posts in various places that have absolutely harpooned Reed Hastings of Netflix.  These posts have labeled Hastings egotistical, arrogant, full of hubris, and most recently Om Malik says he’s a narcisist.  None of these is very sympathetic to the man or to the role of CEO.  Wikipedia defines narcisist as:

“narcissism” usually is used to describe some kind of problem in a person or group’s relationships with self and others. In everyday speech, “narcissism” often means inflated self-importance, egotism, vanity, conceit, or simple selfishness. Applied to a social group, it is sometimes used to denote elitism or an indifference to the plight of others.

I don’t know whether Om means to be so derogatory, and I suppose the article he links to good be interpreted as giving narcists a back handed compliment by implying the can be good leaders.

Nevertheless, I do wonder whether all of these bloggers really understand what it means to be in a leadership position without sufficient data and with a scenario that demands rapid, decisive, decision-making.  I know Reed Hastings reasonably well, having had a startup acquired by him and going on the work for him for a short time after.  All I can say is that “arrogant, egotistical, full of hubris, and narccissistic” are the furthest things I would use to describe the man.  In my experience, he is self-deprecating, humble (he sold the Porsche he bought not long after his first IPO because he thought it was too ostentatious), and filled with a need to collect as much data as possible to do the right thing.  In fact, I’ve chided one of my all-time favorite bloggers, Seth Godin, on the need to collect data if it is available rather than “Just doing it.”

Based on what I know about the man, some set of circumstances were happening at Netflix that forced him to make some decisions without data that have led to the company’s current problems.  More than likely, the circumstances involved the content owners radically increasing their prices to Netflix.  They created one of those times when there was no opportunity to test, decisions had to be made, and it was “bet your company time.”

Watching this debacle, I am reminded of a common Silicon Valley saying:  CEO’s never deserve as much credit as they get when times are good nor as much blame when times are bad.

Is your CEO the most confident man in the company?  I hope so, because they sure will need to be.

2 Responses to “The CEO is the Most Confident Man in the Company”

  1. schlafly said

    Hastings should be happy if he is only being called a narcissist. He is the symbol of corporate greed and callousness, next to Bank of America for its $5 debit card fee. The Occupy Wall Street movement has moved on to Occupy Netflix. Okay, maybe that article is a joke, but Hastings admitted it to the NY Times.

    But you are right about Captain Kirk. He had the confidence to be a leader, and he could make a decision. In Star Trek TNG, the captain can’t make a decision without asking his counselor what she senses about the enemy alien’s feelings. The other Star Trek shows are even worse.

    • So if Netflix’s media partners are increasing their fees to Netflix by 20x and Netflix has to find a way to change the economics to survive, that makes Netflix and its CEO a symbol of corporate greed and callousness fully on a par with the Wall Streeters?

      Sorry Roger, I can’t even get on board with BofA being in that category. After all, in both of those cases people can easily vote with their feet and nothing disingenuous was going on, nor did the wreck and entire economy and put millions out of work as Wall Street did. Both of these companies paid the price for their bad decisions immediately, did not require bailouts on the public dole, and did not proceed to use their bailouts to pay record bonuses while still delivering little of value back to the public.

      If you want to whine about these kinds of incidents being in the same category as what Wall Street has done more than once, take a number. Karl Marx got there a long time ahead of you!

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