The MBA Myth and the Cult of the CEO
This is great work. It&#x27;s a real job gathering and analysing all that CEO performance data.<p>My guess is that most people were suspecting this anyway. The fact is the CEO is there for a few years making a few key decisions, a large company is like an oil tanker, and markets are quite hard to predict.<p>Taleb has cooked a fair bit of soup on the fooled by randomness idea, but in this case his observations are correct. It is very very hard to show that CEO performance is something other than random.<p>That&#x27;s not to say that everyone&#x27;s performance is pure chance. Sports generates a lot of reproducible data about its performers, and we can tell from the numbers which players are better.<p>This is why it&#x27;s not such a big deal for most people that Ronaldo or Messi get paid a lot more than their teammates, and the rest of society.<p>What does bother people, including myself, is that people are given far more credit for outcomes than is credible. Why should there be a many-multiples reward for being slightly up the senior management ladder at each step? Is it not most plausible that the leaders just under CEO also understand the firm&#x27;s situation, and can make sensible decisions? And the step under them? Is it really so hard to find a CEO that you have to pay hundreds of grunt salaries to get one?<p>The other issue is MBAs. I don&#x27;t think anyone is surprised that it doesn&#x27;t help at all. I went to a well known business school too, and it&#x27;s not like they tell you how to run a company. It&#x27;s really just a kind of brainstorming exercise where you have bit of a think about what a company might do to be successful. What it does seem to be is a kind of stamp of ambition. People who go to business schools are keen to work hard to reach the top of the business world.<p>This might seem fine, but you have to wonder whether the best managers are ambitious people who want to be managers, or people in the line of business who want to compete for the same jobs.<p>I know who I&#x27;d pick.