Zuckerberg, Musk and how to mitigate bad executive decisions

Top executives sometimes make stupid decisions. The goal of any support group is either to help prevent those decisions, or to quickly point to the adverse impacts to the decisions so they can be reversed before causing terminal damage to a company.  You can’t do either without solid — and often real-time — metrics because you’re seldom brought in before a bad decision has been made.

After the fact, you must instead create and present a compelling argument to limit the damage.

My bad approach to a problem

Years ago, when I worked for IBM, I was given the chance to meet with the head of my division and speak candidly. The rule was I could not be held accountable for anything I said. (I expect that policy was revisited after my meeting, because the first words out of my mouth were: “Are you a complete idiot?”) I had just joined the Internal Audit division, but before that I was running sales compensation — and I have a degree in a related field. So I knew how commissions worked, and knew the division head had just effectively killed the division. 

What did he do? He took the sales compensation program and inverted it. Instead of the low, fixed salary and high commission setup that had many sales reps earning seven figures, he wanted a high salary/low commission model. The change prompted all the top sales people to quit. Revenues dropped by a whopping two-thirds, putting the division deep into the red and costing him his job.

The issue: execs who don’t understand motivation and productivity

It amazes me how many top executives don’t understand the tools that are used to motivate and attract employees. Meta CEO Mark Zuckerberg recently announced that he was unhappy with employee performance, so he was going to change the performance metrics mid-year and force out the bottom performers. He may have instead effectively told all Facebook employees to find jobs at other companies. Zuckerberg isn’t alone in doing stupid things. Elon Musk’s recent comments about Twitter’s employees have led to resignations at that company, and his comments about working from home at Tesla are undoubtedly doing the same thing there.

Reminder: this is occurring in what remains a very tight job market. 

Part of the job of any staff group (IT is a staff organization) is to help keep top executives like Zuckerberg and Musk from making stupid decisions that could damage the company. That’s where employee metrics come in; the ability to survey and get a bead on employees is critical to potentially reversing a bad decision before the outcome is unrecoverable. Granted, neither Musk nor Zuckerberg seem able to admit mistakes, let alone use metrics to avoid them, and both are known to be vindictive. (That’s something Sheryl Sandberg seems to be learning at the moment.) So the presentation of metrics alone might problematic and reason enough to avoid working for either man. The response to an internal memo by employees at SpaceX likely has key people thinking about leaving that relatively successful company as well.

Across the tech industry, there are major employee shortages at the moment, so driving employees to leave seems ill advised. With the right employee metrics — watching for things like increased LinkedIn or Glassdoor searches, longer lunches or time off during the day, or union recruitment — a corporate leader can re-calibrate messaging and determine whether that messaging is mitigating the problem. (Metrics can also let you know that maybe you should consider a company that is more supportive of its employees and isn’t suffering from off-the-rails executives.)

Lessons learned?

Mucking around with compensation and perks is something executives seem to do way too often, given most have no understanding of how these things relate to productivity. Musk and Zuckerberg are hardly alone in mistreating workers, but if employees are adequately monitored, at least you can get figure out how bad the problem is before a company becomes non-viable. And you can use that information to potentially mitigate or reverse what those at the top of the food chain are doing.

In the end, we all work in a numbers business. It should be unacceptable not to use data to ensure the care, feeding, and especially the loyalt, of the employees critical to success. When senior executives misbehave, it’s up to those who understand the real issues and can get metrics to convince them to reverse a bad decision.