I’ve been sitting on a post by John Gruber entitled SHOULD A CEO BE A NERD ABOUT THEIR COMPANY’S PRODUCTS? Gruber talks about a post from Ben Schlappig that talks about Airline CEOs and their knowledge of their competitors’ offerings. Schlappig says that there are essentially only two types of Airline CEOs: those who know nothing about their competition and those who know everything about them even including how many seats they have on a given flight. There is, he says, virtually no one in the middle. Furthermore, he says, those airlines run by CEOs who know all about their competitors are almost always the best.
Gruber says that the same principal applies to other businesses as well. If the CEO is the typical product of an MBA program and their concern is mostly the financial aspects of the business, the company is unlikely to excel in whatever their product is. As Gruber puts it,
If the CEO’s primary perspective on the company is via spreadsheets — if it’s all just P&L to them — that company is not going to excel at quality. Or if they do excel at quality, they won’t for long.
All of this reminded me of one of my favorite hobby horses: Boeing. Back when Bill Boeing was still running the company, his office was nextdoor to the shop floor, and he often stopped in to see how things were going. When the suits took over, one of the first things they did was move the corporate offices to Chicago. They didn’t care about what their competition was doing. They didn’t even care about what their own company was doing. It was all about the financial aspects and how they affected the stock price. Bill Boeing was a nerd who knew everything about the aircraft industry. These clowns didn’t know anything about it and had nothing but contempt for their technical staff who did . The results were predictable: Boeing aircraft started falling out of the sky and no one wants to fly in them.