Seeing Like a CEO

" Performance in highly collaborative processes may be hard to measure and easy to game. Canning supposed underperformers and rewarding "your best" might in practice lead you to shed your best and reward the cunning and disloyal. [...] The key fact to note about Harry Stonecipher is not that he was influenced by Jack Welch. It's that he was, for the first time in the firm's history, an outside hire. Stonecipher had been President of McDonnell Douglas, which had under his stewardship been merged into Boeing. But he had no access to, no visibility into, no way to monitor, judge, understand, or discipline the je ne sais quoi that made Boeing work.

In order to do his job, Stonecipher undertook to rationalize and simplify and render legible the firm. Lacking access to "soft information" that could only come from developing relationships within Boeing over years of collaboration, he sought to manage the firm on the basis of "objective" so-called hard information. Among the most salient hard information in any business enterprise is cash flows, so the sway of "bean counters" was elevated automatically. Among the least legible information in a firm, to an outsider, is the quality of employee judgment calls, so internal expertise was demoted. "

Anyone can cut costs.

It takes a pioneer to increase revenue.