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Comment by cpeterso | Hacker News Reader

If bad CEOs are bad for company performance yet good CEOs have no effect on company performance, then is having a CEO all downside with no upside? What is the large company, public or private, that is run democratically without a CEO?

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That's a possibility, if being a CEO is mainly a matter of not screwing up in some spectacular way, and not dipping your hand too deep into the cookie jar. Performance doesn't have to be a monotonic function passing through the origin.

There are other jobs like this: Surgeons, airline pilots, and tympanists. Maybe the skilled trades in general. Sure, the good ones may show their brilliance on rare occasions, but those don't happen often enough to show up in a statistical study. Mainly they need the training, practice, and self discipline to follow the correct procedures and get it right every time.

I'm thinking of an analogy, which virtually guarantees that it will be a bad one: A bad plumber would be bad for the performance of my house, but a good plumber can't really make my house perform any better. Yet I don't want plumbing to be run democratically in my house without a plumber. (Note: I'm the plumber in my house).

If you look at it from the point of view of you, the homeowner, then you don't see a good plumber but merely a plumber that follows procedures so the job is done correctly. Likewise, you see a bad plumber that screwed up the job and flooded your house.

Perhaps the "good" part of being a good plumber is doing the job correctly every single time and not making mistakes. If this were the case then I'd argue you are a perfect plumber. At what point on the scale does a mistake or mistakes take you from good to bad? A plumber with a 90% success rate is, in my definition, a good plumber as the stakes are not as high. A surgeon or airline pilot, in my mind, must have a 100% success rate in order to be considered competent since lives are at stake. You'd be hard pressed to show that a former CEO that now has a different position at another company is not a CEO due to being a bad CEO as they likely wouldn't be hired at all for any high-level position.

To wrap this up, if there was still a plumber out there that was a bad plumber then I suspect he/she wouldn't be a plumber long enough to still get jobs.

A good plumber can make your house run better if they come up with a more efficient or innovative way of doing a process that you didn't think about but in your mind that wouldn't make them a good plumber but merely a plumber that follows processes and doesn't make mistakes. If not for mistakes then we may never find better ways of doing something.

I like your analogy and I think it's got its merit. A good plumber might be able to solve a problem faster than an average one, though.

Yes, definitely. I am amazed by how quick the pro's are. There have been some jobs in my house that absolutely had to be leak tight on the first try, e.g., where a fixture is above a drywall ceiling. I've hired a plumber for those jobs.

>What is the large company, public or private, that is run democratically without a CEO?

It's structurally made virtually impossible to do such a thing. Nonetheless, this approach was successfully applied in Argentina. There's a good documentary about it http://www.thetake.org/

The closest example may be Visa International before it became a public company. Visa used to be a chaord, a strange organizational form dreamed up by Dee Hock. Visa was owned by banks who were competitors, and they needed for it to be a neutral intermediary. Hock wrote a book, "Birth of the Chaordic Age", on how this worked, but the idea never caught on.

I'd never heard of this - it's fascinating, but also has a rather Buckminster Fuller-esque '60s tang to it:

http://www.fastcompany.com/27333/trillion-dollar-vision-dee-...

And in case anyone wants to discuss chaords:

https://news.ycombinator.com/item?id=10443224

John Lewis, a department store and supermarket chain in the UK, is a bit like this:

http://www.theguardian.com/business/2012/jan/16/john-lewis-m...

That said, they do have a Chairman who is basically a CEO; he answers to the employees rather than shareholders, but i'm not sure how much that changes things.

And of course there's the Co-op, which is a patchwork of regional and national organisations under a common brand which between them provide a range of services so wide they're virtually a shadow state:

http://www.co-operative.coop/

I have no idea how they are actually run.

In theory, a company is run by the board and the CEO reports to the board. But most boards seem to be disconnected from day-to-day operations. Perhaps the both the board and CEO could be replaced with a "high council" or triumvirate, maybe including employees in rotating terms.

Or instead, just get a business manager trained at the local Community College, and call that good. Really, one of my CEOs just instituted reports for inventory and accounts receivable, and we turned around in 6 months. Just good business practice. Not a genius. But he got called that, in Silicon Valley magazines etc.

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