This has been quite a week for CEO mistakes.  First came the hubbub about Scott Thompson, CEO of Yahoo, inflating his resume to include a computer science degree he did not actually receive. According to Mr. Thompson someone at a recruiting firm added that degree claim in 2005, he didn’t know it and he’s never read his bio since. A simple oversight, if you can believe he hasn’t once read his bio in 7 years, and he didn’t think it was ever important to correct someone who introduced him or mentioned it.  OOPS – the easy answer for someone making several million dollars per year, and trying to guide a very troubled company from the brink of failure. Hopefully he is more persistent about checking company facts.  “A billion here, a billion there”  But luckily for Mr. Thompson his errors were trumped on Thursday when Jamie Dimon, CEO of J.P.MorganChase notified the world that the bank’s hedging operation messed up and lost $2B!!  OOPS! According to Mr. Dimon this is really no big deal. Which reminded me of the apocryphal Senator Everett Dirksen statement “a billion here, a billion there and pretty soon it all adds up to real money!” If he goes to Las Vegas I think Mr. Dimon might be what they call a “Whale.”  Interesting “little” mistake from a guy who paid himself some $50M a few years ago, and benefited greatly from the government TARP program. He said this would be “fodder for pundits.” Does he expect everyone to simply overlook losing $2B? He also said this was “unfortunate timing.” Is there a good time to lose $2B?  But neither of these problems will likely result in the CEOs losing their jobs. As obviously damaging as both mistakes are, which would naturally have caused mere employees to instantly lose their jobs – and potentially be prosecuted – CEOs are a rare breed allowed wide latitude in their behavior. These will be considered “one off” events that gain a lot of attention, but the media will have forgotten within a few days, and everyone else within a few months.  5 CEOs that truly deserve being fired  By comparison, there are at least 5 CEOs that make these 2 mistakes appear small. These 5, frequently honored for their position, control of resources and personal wealth, are doing horrific damage to their companies, hurting investors, employees, suppliers and the communities that rely on their organizations. They should have been fired long before this week.  #5 – John Chambers, Cisco Systems. Mr. Chambers is the longest serving CEO on this list, having led Cisco since 1995 and championed much of its rapid growth as corporations around the world began installing networks. Cisco’s stock reached $70/share in 2001. But since then a combination of recessions that cut corporate IT budgets and a market shift to cloud computing has left Cisco scrambling for a strategy, and growth.  Mr. Chambers appears to have been great at operating Cisco as long as he was in a growth market. But since customers turned to cloud computing and greater use of mobile telephony networks Cisco has been unable to innovate, launch and grow new markets for cloud storage, services or applications. Mr. Chambers has reorganized the company 3 times – but it has been much like rearranging the deck chairs on the Titanic. Lots of confusion, but no improvement in results.  Between 2001 and 2007 the stock lost half its value, falling to $35. Continuing its slide, since 2007 the stock has halved again, now trading around $17. And there is no sign of new life for Cisco – as each earnings call reinforces a company lacking a strategy in a shifting market. If ever there was a need for replacing a stayed-in-the-job too long CEO it would be Cisco.
Our attention is grabbed weekly by business problems for which CEOs make excuses. But the 5 worst CEOs have long track records of steering their companies out of growth markets and toward failure.