Why C.E.O.s are getting fired more
It&#x27;s the same short-termism you see in the sports world.<p>Every season starting around now, the top clubs in Europe will start to fire managers who aren&#x27;t performing well. Despite the fact that a soccer team is something that has a bit of momentum and can&#x27;t be changed all that quickly.<p>You then hire a new guy, and you have to pay a premium. For one, there are fewer people available because you&#x27;re in a hurry. For another, any new guy will see there&#x27;s a risk of getting canned, so he&#x27;ll want more money to compensate. And finally, you&#x27;ll have painted yourself into a corner because you need someone who is perceived to be better than the guy you just canned.<p>- The board members live off being board members. So just like analysts at banks, they herd together. Nobody is going to stick their head out on a candidate who is not like what they think everyone would want.<p>- There&#x27;s an illusion of control. The idea that you can change outcomes predictably is a big problem. This guy will turn around sales. That guy is better with people. The reality is such judgements are quite blurry and likely to be spectral rather than binary. And a lot depends on environment.<p>- Desperation for action. If things are going badly, something must be done. This is something, so it must be done. (Yes Minister). This is another area where an understanding of statistics would help. Your team&#x2F;company&#x27;s losing streak is utterly natural. Replacing the guy at the helm when you get a streak is just likely to cause the next guy to get undeserved credit (which reinforces the cycle).