Investors often are only concerned about the numbers, the financials. Long term viability of a corporation is only good to the extent it improves short term financial earnings: earnings-per-share, cash flows, liquidity, dividends. These are all I need care about. I convince myself, like Larry the Liquidator, that by doing this I am performing a highly valuable and ethical service for society; that without my efforts money would not flow into newer and better niches in the marketplace and the economy would stagnate.

As an investor I look for a CEO who shares my sentiments; who will take a detached view of the operation over which I will put him or her in charge. I’m looking for individuals with big egos, who are motivated by cash and the niceties it buys (e.g., access to exclusive sporting clubs, fancy wheels). I confer corporate power on these individuals with the understanding they will use that power to increase the financial wealth of the investors, within a 3-5 year time-frame.

These CEO’s are not the individuals who founded the firm, the one’s with their name on the side of the building. These are individuals who were selected based on their interviewing skills and referrals for being ‘team players.’ They served investor’s needs in smaller amounts and have grown to a position where investors trust them with larger amounts. These are professional c-men with no emotional or paternal stake in the corporation.

Those of us schooled in Thucydides, The Peloponnesian War roll our eyes at the naïveté. We’re interested in political power, how it ebbs and flows in the corporation. Descriptions of behaviors and power grabs by Thucydides, written in the 5th century BC, are just as fresh and relevant today as they were in his day. You only dare to share, cooperate and seek consensus when you have incontestable power.

Investors look for CEO’s who do not shy from the use of threats, manipulation and domination. They seek c-level officials who have little concern for the corporation except to the extent it affects their personal branding for future c-level slots. They seek c-level personalities who are abrasive, demeaning and self-serving: these signal the CEO is not growing too attached to their position, or the people under their command. The CEO needs to be with the investors at the moment they pull the trigger for a financial windfall⁺ (e.g., mergers, acquisitions, buy-outs).

There are (many?) exceptions. But just in case, we act as though we are dealing with the rule and not the exception. Successful CEO’s by necessity are masters of disguise. Direct reports know the truth, are far less practiced in the art of deceit, and it’s to their demeanor that we look for the true signals⁺ of intention.

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Home Page August 2010