Wednesday, May 09, 2012

Job Value

Tomorrow I'm back mentoring my award winning charge, Edgar, who became the unlikely winner of The Next Big Thing, an entrepreneur competition for inner city schools in London. And now it gets serious since he has real investment and the onus to turn this into a life changing opportunity.

This success got me reflecting on what makes a good business person, and the current controversy about major company executive pay.

In sport, it's ironic that Di Matteo has done better at Chelsea than superstar managers, and England Rugby wisely gave their head coach job to a schoolteacher not a 'star coach'.

Indeed, I would go as far as to say that the biggest mistake I've made in business is to recruit from the outside (usually at ridiculous salaries) rather than to promote from the inside. So, what is the value of 'superstar managers' ? Are they just snake oil merchants ?

And for a startup there is no more crucial role to fill than the star salesperson, and over and again, you find startups employing washed out salespeople from multinationals on ridiculous base salaries based on their Rolodexes. I have never, ever seen this work. Find a couple of bright, enthusiastic graduates, give them a database and a phone and lots and lots of training in your product and you'll get much better results.

Almost without exception, in my view, the multi-million salaried bosses of listed companies got lucky. Last week Sly Bailey resigned as CEO of Trinity Mirror after presiding over a fantastic increase in her salary whilst the company lost nearly 95% of its value in a decade.

There is a cosy club of headhunters and non-execs that are now in the firing line for allowing such ludicrous situations to arise. Anyone working for Trinity Mirror that presided over 90% decimation of their business would surely have long been sacked.

We live in a re-calibrated world where superstar managers should be cast as a past indulgence.