Tuesday, March 12, 2013

Epic Fail: Marissa Mayer, Ron Johnson, Tim Cook and the Cult of Mediocrity

Since writing about the stock market is so damn boring these days - yeah, the Dow closed at another record high today, marginally so, though the S&P and NASDAQ couldn't quite keep up - let's take a look at some of the people who think they are shaping our collective futures.

I'm (yes, shifting to first person singular for a change) speaking here about the wannabe executives who have been boosted by people bigger than themselves - one, in particular, Steve Jobs, was actually bigger than life - and we have a triumvirate of massive failures, waiting to happen, astride some of the biggest corporate structures in America.

Marissa Mayer, the recently-installed CEO of Yahoo! (YHOO), has been catching the most attention of late, first, for her dictum that Yahoo! home-workers must begin to come into the office, and just today, on word that the redoubtable Ms. Mayer is now personally reviewing every potential new hire at the Silicon Valley firm she heads.

What a nice way to tell the HR department to F-- off! Seriously, Yahoo! employs something like 11,000 people, so, can one expect Marissa to personally interview every new employee? There's a solution to this little time-consumption mess she's created for herself, and it's called a hiring freeze. Expect one soon.

On the same matter, Ms. Mayer, is said to be leaning more towards employees who've earned degrees from prestigious universities, rather than on merit (an old-fashioned idea that people who've actually accomplished something are valuable), in order to create the correct "culture."

There's something a little disturbing about Ms. Mayer's approach to business and culture, in a way that's kind of creepy. While she told all the home-workers to make tracks back to the office or leave the employ of Yahoo!, she herself had a nursery installed near her office, so she could keep an eye on her newborn son, a benefit the former home-working-mothers do not enjoy.

Two words for Ms. Mayer: elitist. bitch.

Mayer's main claims to fame include graduating from Stanford and being the 20th employee hired by Google founders, Sergey Brin and Larry Page. Nice placement. Yahoo! stock has risen about 40% since Mayer took over as CEO, but there's little evidence to suggest Mayer has had any positive impact on the company. The site has had some redesign lately, though nothing radically different, and it still suffers from poor infrastructure and an assortment of glitches.

If Yahoo! disappeared from the internet tomorrow, it would not be missed. There are plenty of other websites which do what Yahoo! does, yet better, though, admittedly, with less organization. The internet would surely survive without Yahoo! and there would be a great talent pool of unemployed brainy types seeking more challenging employment in the valley.

Let's talk next about Tim Cook, the immediate successor to the late Steve Jobs, founder of Apple (AAPL), which, at the time of his death, was considered the greatest corporation operating in the world. Just before his death in October, 2011, Jobs, knowing he had only a few months left to live, handed over the reins to his corporate empire to Tim Cook.

Jobs, never to be mistaken as a person with great people skills, groomed Cook in his own ways, though he could certainly have not imparted his genius for inventiveness and style, nor his uncanny business acumen. For the first year under Cook, the stock soared, likely on the impetus that Jobs had left in his wake. A year out, however, Apple stock began to nosedive, and continues to falter. Apple hasn't had any new devices since the iPad Mini, and they're losing share in the smart phone wars to Samsung and other competitors.

Cook, like Mayer, happened to be in the right place at the right time, will surely be well compensated for failure, and will lead Apple back to the depths of despair the company suffered when Jobs was kicked out and replaced by John Skully. The innovation and no-nonsense management style of Jobs is long gone. Other consumer electronics firms are running circles around the once-innovative Apple.

While this is not entirely Cook's fault - one cannot be blamed just for being numb and uninspired - he'll be along for the ride... and the fall.

Third in our review of 21st century anti-heroes is another Apple wunderkind, Ron Johnson, who took over JC Penny (JCP) after being hailed as the grand designer of Apple's wonderfully-simple, yet practical stores.

Again, Johnson's story is more myth than meat. While he was head of the retail division, he also had Jobs inspecting and critically appraising every aspect of his work and also had Mickey Drexler as an advisor. Drexler, formerly of the Gap, Inc. and famously, the inventor of J. Crew, is widely and rightfully regarded as a retail genius.

In November, 2011, Johnson got the job as CEO of JCP off his glowing resume and plenty of hype. Wall Street types were peeing themselves over the thought of a person so gloriously-self-proclaimed-as-revolutionary taking over the reins at the failing mass merchandiser. Initially, the stock got a huge bump, trading as high as 43/share on the promise that Johnson would turn the company around.

The results have been nothing short of horrifying, mostly to holders of JCP stock. The hoped-for turnaround has produced nothing but a string of quarterly losses that have brought the share price down to $15, slicing it by nearly two-thirds from the heady, halcyon days of Johnson's visionary resurrection.

To his credit, Johnson has taken some responsibility, expressing in the most recent quarterly conference call that some of his strategy has not worked out very well. The company is teetering on the brink of bankruptcy, and, if it goes under, will not be missed. Like Yahoo!, there are plenty of competitors in the retail space.

It's a symptom of our misdirected times that Wall Street failures are initially hailed as heroes. They've done little to achieve their notoriety, and, arguably, are learning on the job. They are not genii in their own rights and never will be, only people who are bright followers and poor leaders. It's not their fault that they're doomed to failure, though it is sometimes fun to watch them squirm under the bright glare of public scrutiny.

If only there were a mechanism like the stock market for politicians... but, I'm entering dream-land now.

The moral of this story is that genius cannot be replaced and those chosen to walk in the footpaths of such will be handsomely paid and praised, but that garden path soon becomes adorned mostly with thorns.

The failures these people will beset upon themselves and those around them figure to be of epic proportions, and, in the case of JC Penny and Apple, already have reached what some would consider crisis stage. Companies come and go, but the stupidity of seeking out role models from the rich and connected seems a character flaw that never gets old.

...so, to close out today's chapter of "as the world yearns," this cute little song off the Beatle's Rubber Soul album came to mind. It's relevant on many different levels; recalling so many of the people I used to know but now realize that they too were mere phantoms, apparitions and shadows. This video comes complete with the lyrics, so listen along, read and learn...

Dow 14,450.06, +2.77 (0.02%)
NASDAQ 3,242.32, -10.55 (0.32%)
S&P 500 1,552.48, -3.74 (0.24%)
NYSE Composite 9,059.96, -22.27 (0.25%)
NASDAQ Volume 1,672,772,125
NYSE Volume 3,482,609,250
Combined NYSE & NASDAQ Advance - Decline: 2661-3765
Combined NYSE & NASDAQ New highs - New lows: 387-29
WTI crude oil: 92.54, +0.48
Gold: 1,591.70, +13.70
Silver: 29.17, +0.318

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