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Dean Eckles

There is something like regression to the mean at work though (how much who knows). Superstar CEOs sometimes just oversee a good time for a company.

Ken

It really is bad statistics. There are so many possible factors that we would never assume are not independent of the choice of an external CEO. Boards choose CEO hopefully because they think the CEO offers something that internal applicants don't. This usually means they want something in the company changed. If they don't get it right then the new CEO won't be suitable. This usually happens when a company is tending towards not doing well, a difficulty for any future CEO. The new CEO is probably quite happy at his previous company, he knows that he may have problems at the new company, so he asks for lots of remuneration. Plus as Dean said, there is regression to the mean. We all have moments of brilliance, and then its back to usual.

One of the articles mentions Apple. The problem with Sculley is that he didn't understand the market. If you are going to sell a consumer product at a premium you have to develop brand loyalty and a sense of wow. Wow means innovative, different and usable. Apple kept making products that were good but not innovative, and they didn't maintain their quality standards, so no longer did people feel the need to pay extra. Jobs gave me a computer I liked rather than one I simply use. I think Sculley was hired to give them a business focus, and the problem was that the board thought that was what they needed.

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