There are curious similarities between the doomed head of America´s favorite TV family (yes, even more popular than the Orbornes) and self-deluded CEOs who strut around claiming to Manage for Maximum Value while actually achieving the exact opposite.

First, there´s the absence of a coherent value-business plan. The “value-“ prefix before “business plan” makes all the difference. That designation, when deserved, means that the overall plan as well as each of its component parts generates real value in terms of cashflow in excess of both incremental investment and that company´s cost of capital. Based on objective independent assessment, never grossly distorted internal propaganda.

Tony Soprano makes wafting statements about growth, but is notoriously hazy about how to achieve those aims. Throwback to mid-90s CEO ‘vision statements´, now the stuff or business cartoon parodies worldwide?

Second, there is the value-destroying Soprano-Ebbers practice of confusing unreachable goals with value leadership. Tee-vee´s ‘T´ sets a ridiculous amount of money that each of his soldiers out in the field must give him each month (the phrase is “the nut”) with no excused for failure accepted.

WorldCon´s now-disgraced former chief executive pushed ever higher numerical goals on his managers. The former Canadian gym teacher even knew what one or two of the goals meant.

A few Bennis-calibre CEO-groupie biographers might be fooled by such abrogation of leadership. For the rest, the truth is painfully apparent.

Merely manipulating the ‘value´ metrics (and nothing more) never creates value. The CEO must be a full partner in the value development process and know that the target is realistic and is matched by a strategy equal to the goal.

Otherwise, what arises is the obscenity of overreaching companies claiming that they will become major, profitable players in unfamiliar business segments where they are doomed to fail.

Third and finally, there´s error in separating out the true value generators in the business (Corporate Key Contributors (CKCs) in Chapter 3 of The Value Mandate) from the rest. Tony relies on his addict nephew, confusing family linkage with that rare combination of performance acumen and character necessary to assume leadership.

The four-years-and-out throwaway CEO used to try to pack the Board with his cronies, although that practice is now discouraged as firms are forced to improve their level of corporate governance.

One thing that Tony does have right is the temporary nature of his role. He acknowledges that in his position, the options are bleak: in a few years, the overwhelming probability is that he will either be dead or in prison or selling trinkets in New Mexico under the Fed´s Witness Protection. In the more traditional corporate environment, it´s a joke position as ‘vice chairman´ or a contrived new senior strategic planning role or simply ‘being resigned´ with the explanation that the man suddenly developed all new personal interests that he/she is intrigued to pursue.

In The Value Mandate, VBM Consulting Partners and co-authors Clark and Neill noted that the average CEO time at the top was 3.5 to 4 years, based on research by Chicago´s Christmas, Gray and Asssociates. But that analysis was based on the pre-bubble late ‘90s. Since that time, a multitude of career-shortening forces have arisen, the most important of which is the clear realization that nearly all of the CEOs who were mouthing bromides about “managing for maximum value” were actually achieving far less. 1

Oh, and there´s one more important similarity between the Noo Joisey mafia leader and value-underperforming company chief executive. As Tony might express it, you can´t tell them nuttin´. Doesn´t make any difference what the real situation is. Tell ‘em that they aren´t achieving all the value they might, and it is you who gets wacked.

Note:

1

“Third Generation MFV Comes of Age” is available to present and past clients of VBM Consulting without charge and corporate registrants to the VBMC Resource Ctr. Email outperform@vbm-consulting.com referencing that analysis and providing full contact details at company address, including email, postal address, phone. The editors are pleased to send out the analysis following confirmation of eligibility.
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