The Problem with Celebrity CEO Culture

Are you as disturbed as I am about the ascendancy of the celebrity CEO, the buy-in of the mainstream business media in the concept and the interest-conflicted Wall Street analysts that decide these CEOs’ fates? The slew of stories that eviscerate Carly Fiorina are as bad as the ones that elevated her to “single-name” celebrity status in the first place.

Can a single person really hold that much sway over the fortunes of a company? My experience says no. But that doesn’t stop the media and the analysts from trying. Do your single-day pass thing at Salon and check out this surly piece from a former New York Times writer, and then check out the Carly culture vs. HP culture in Monday’s Times. A CEO can’t matter this much.

Meanwhile, Fortune has put Carly on the cover so many times since 1999 that it felt duty bound to put a parenthetical in its obit for Carly’s run at HP acknowledging that the magazine had played a part in creating her celebrity (that it was now trashing, of course). It’s like watching the trajectory of Hollywood celebrities in the supermarket check-out line. I don’t think we do that with CIOs here at the magazine, but stop me if you think we have.

The HP board screwed up by seeking a celebrity to run the company, a celebrity that assured that every move the company made would be analyzed to the nth degree by the analysts and the media.

How do you rebuild a struggling company in that kind of atmosphere? You could say that Gerstner did it at IBM, but in fact Gerstner was working from a much more solid base, and services was a route that anyone seeing the market and the state of the company would have taken if they’d had a grain of sense.

The problem here is boards who assign outlandish levels of responsibility and accountability to a single person, lavish too much money on them (isn’t that where all our schadenfreude comes from deep down–the obscene amounts of money that celebrities of all kinds receive?) and then push them in front of a band of analysts who have no economic stake in long-term strategies. It is all about the short-term shuffle of money, mergers and breakups–not because the analysts are inherently evil, but because that’s how the system is set up and it’s how they are rewarded (analysts come from investment banking companies that earn their living doing all these deals).

What analyst is going to have the patience to wait for HP to build itself up to the point where it can afford to compete successfully with IBM–competition that CIOs desperately need over the long term?

Contrary to the harping we’re hearing today, the Compaq acquisition was a route to that, and it wasn’t going all that badly. HP will probably be broken up into slices to compete with Dell at the low end without the benefits of Dell’s direct model, and IBM consulting at the high end, without the legions of other offerings that make IBM so attractive to buyers.

The HP board and the business analysts don’t seem to understand that corporations, not consumers, are HP’s long-term customers, and what they want is a stable, diverse company that can offer the whole range of IT needs, from low-end desktops to high-end strategy and really innovative new scientific and technology products from HP’s legendary R&D people. Who is listening to the real market here?