Quoted by Matt on July 6 2009:
C.E.O.’s with law or M.B.A. degrees do not perform better than C.E.O.’s with college degrees. These traits do not correlate with salary or compensation packages. Nor do they correlate with fame and recognition. On the contrary, a study by Ulrike Malmendier and Geoffrey Tate found that C.E.O.’s get less effective as they become more famous and receive more awards…The C.E.O.’s that are most likely to succeed are humble, diffident, relentless and a bit unidimensional.
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4 comments so far
FN 06 Jul 09
That quote is so out of context it’s not even funny. First of all, the study by Kaplan, Klebanov and Sorensen looks at 316 CEO candidates involved in LBO and VC deals and attempts to attribute performance based on 30 abilities. I’m too lazy to buy the paper for $5 and read it, but I can tell from the abstract that they didn’t even look at companies that were not VC or PE backed (for example 37signals). Further more, they have 316 data points and are trying to do factor analysis on 30 potential dimensions. I’m pretty sure that the sample size is barely significant, if at all. Most egregiously, finding a correlation is one thing (which is what the abstract states) but the way it’s quoted makes it sounds causal. Please.
mike 06 Jul 09
oh, this is precious! 37signals is posting something that includes praise for humility.
Joe Grossberg 07 Jul 09
Humble and diffident? From where I’m standing, you guys seem quite confident and bold.
Relentless? You explicitly limit work days. (Yes!)
A bit unidimensional? DHH suggested that people take up whittling (i.e. the wood-carving craft)!
Yet 37Signals is a success.
So why is this quote highlighted on your blog? It seems to contradict your company philosophy, if anything.
Jeremiah Staes 07 Jul 09
Having seen both sides of the coin, I think the skills it takes to run a large, multi-thousand employee company are different than a 5-20 person shop. Very different; and I would even venture to say that they’re almost incompatible.
Watching CEOs and other C-levels shoehorn themselves into small operations is painful. They have to make too many resource decisions; they don’t have their normal cadre of advice. Not that that is a bad thing; when dealing with billions, it makes sense to have that delegation and a CEO fits more into a “chief delegation officer.”
Now, in small orgs, the CEO has to be more of a focus. There’s a bigger direct relationship and many times companies those size are still carried in workload by founder/CEOs. Transferring the big company CEO to a small company without some sort of transition period is usually a disaster.
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