Larry Weidel argues quarterly pressures push CEOs toward short-term thinking, unlike visionary founders like Jobs and Gates. He describes a Midwest company that shrank from 800 to 300 employees when leadership lost focus, and contrasts Facebook founders selling stock after the IPO with Warren Buffett's long-term succession planning.
Questions this video answers
About 800 employees.
They currently have about 300 employees; approximately 500 people lost their jobs.
Good to Great.
Welcome to part three of the Becoming a Leader series. I was talking with John Addison a couple hours yesterday and he was saying that how few, even CEOs take the long view. He said so many. And I guess it's because CEOs have to keep their job by their quarterly performance. You know, every quarter they have to make projections and then they have to get with the analysts and the regulators. They have to, then they have to announce did they make their projections or not. And if they miss a whole bunch of them, of course they're gone. It makes them short sighted. So you see it even at the top, the visionaries like the well Art Williams or like Steve Jobs or Gates, these are people who pretty much owned everything and even Facebook in the beginning where they were thinking about what was good for the whole, the overall enterprise. They looked at the thing is like it's my baby. They weren't on a short sighted thing of how much is this going to pay me? Now you find out that Mr. Zuckerberger and some of his boys were, they got greedy because right after they had that ipo, they went in and sold tons of their stock and put, you know, a couple billion in the bank. And that caused the stock, the stock is just now starting to get back to where it's decent. But it caused all the investors to say this guy has lost his confidence and it focuses on the future of growing Facebook. He's more interested in putting money in his pocket. And it's interesting, the first day he became a CEO, he got short sighted. But what John was saying is almost none of the CEOs take the long term view. And there's an example, I won't use who it is. One of the companies that we sold products with, they had 800, got up to where they had 800 employees. This was the CEOs. It wasn't CEO. Have the owner, president, founder, owner, CEO. That was his baby. Well, he gets to the end of his years and he goes public and now he becomes the CEO and he's getting close to retirement. So he cashes in. See, he was looking down the road, compounding. Everything was built on growth. But he got it to this point and he started thinking of other things. He started, his mind started wandering, how about this? How about my future? How about my quality of life? Or oh, another thing, how about my money? What's going to happen there? Well, as soon as you take your eye off the ball of where this thing is headed long term, especially the person steering the ship, the person in charge, it's not going to grow. And because growth takes your total attention, it's like driving a car fast. If you're going to drive your car at the maximum speed limit, you're going to have to pay attention. You're going to hit something, drive off the road. You can't go to sleep. But growth takes effort, attention, Problem solving takes everything you got. But his mind wanders. You see this all the time. He cashes in and of course, he still does the CEO role. But suddenly, without him being aware of how it changed, his focus changed, the company now starts going down. He wound up turning the company over to another person to run. He got out entirely. You know, he thought, this is going to be his baby. His dream was even back here when he had zero people involved. You know, we're going to get up to where these are just numbers. You know, where they had like first his first big employee and then he had ten. And it was a hundred. Wow, 200, 400. And he's thinking, sky's the limit. We're going to go. We're going to go global. We're going to go worldwide. We're going to have 10,000. Eventually he gets to this point, his focus changes, cashes in his number one focus. Guess what now, little town out of the Midwest. They employed 800 people. Everybody works there. He lives there still. He's got his money, but he wasn't thinking about his quality of life. He wasn't thinking about the impact on other people. Got his eye off the ball, and as a result, they have now they're headed down. They currently have 300 people employed. 500 have lost their jobs. And these are people he sees every day when he gets out. He drives around, goes to the store, goes to restaurants, does anything. He's running into these people and they are not giving him the happy smile because they know because of what he did caused the company to crater and them to lose their job. So, folks, just a thought. While you're. When you're involved in something, keep looking down the road. Obviously, this guy was not going to live forever, but he wasn't thinking about the impact of cashing in. He didn't have a successor in place. He didn't have, like Warren Buffett, the last probably 15 years. Warren Buffett has had an incredibly detailed survivor program that will kick in automatically if he dies. In terms of running Berkshire Hathaway, it's all done. It's secret, but it's written down. It's in stone succession. He's thought about after he's Gone. Will this thing compound on out? Because he wants to. Because all his friends and relatives and Omaha, Nebraska, pretty much most of the town either worked for the company or invest in the company, and he wants it to turn out well even after he's gone. So he's made provisions. So that's the point. Just keep your eye on the board down there. Most people don't. So that's why I saw some of your comments about, you know, the Jim Collins Good, Good to Great book, and that's really what we're talking about. The deal is, unfortunately, I'm sure Jim Collins wishes he had a forum where he could spend hours explaining because, you know, if he wrote a book, he's got thousands of hours of research and stories and this, that and the other about good to great. But all he can share with you is what he puts in that book. And it's just the tip of the iceberg. But if he had the time, I mean, he could really get down there and explain a lot of this stuff like we're doing here, because these issues that we talk about, this is what everything comes back to. It's not like, hey, let's get this first 10, then we're going to get the next 10, then next. No. This is where greatness comes from in all walks of life, down through history, in every industry, business, personal, whatever. These are the principles that cause some people to do better and to rise up and improve things for themselves and others, or just improve things overall and rise to the top, whereas other people are just kind of spinning their wheels, doing the same thing over and over, really never going anywhere. And it comes down to how they use 24 hours in a day. And I'm sure Jim Collins, who wrote Good to Great, would love to be able to spend time. But even if you go hear him speak at some of these meetings, he's going to speak for an hour and he's off the stage. And most of everything you hear in that one hour is stuff you would have heard in the book.
