Andrew McKenna died this week. You’re forgiven if you have no idea who McKenna was or what he accomplished. Neither did I, and I’ve been an avid reader of business news for nearly half a century. I learned about McKenna’s litany of accomplishments reading this story in the Wall Street Journal. Nice job, Heather Haddon, for giving McKenna the tribute he deserved.
McKenna is best remembered as the McDonald’s board member who was a steadying force for the company during a series of multiple crises. McKenna, widely respected for his business acumen and community service, was named chairman in 2004 to reassure investors when CEO Charles Bell was forced to step down after only two weeks on the job because of a health issue. Bell had succeeded James Cantalupo, who died from a heart attack at a company conference.
Reading about McKenna’s myriad leadership feats reminded me of the great stewardship that once built and oversaw America’s pioneering corporations. Leaders like IBM CEO Thomas Watson Jr. who led the information revolution, building on the legacy of his father; Walter Writson, who revolutionized the international banking system in his four decades as Citicorp CEO; Sam Walton, who founded and transformed Walmart into a retail powerhouse; John Rockefeller, founder of the Standard Oil Company and whose philanthropy continues to generate substantial dividends; Steve Jobs, whose brilliance and determination made Apple the powerhouse it is today, and Bill Allen, the Harvard Law School grad who transformed Boeing into an aviation giant.
According to the Journal’s obit, McKenna preferred work, family, and religion to sleep. He also was willing to take risks but didn’t take credit when they paid off. McKenna’s modesty is in stark contrast to the CEOs running U.S. businesses today.
America has entered the age of the bullshitter CEO, leaders who tell falsehoods, are shameless self-promoters, or falsely represent themselves as being driven to serve the greater good. Economic downturns reveal the true characters of CEO, and in the U.S. the results aren’t pretty.
Elon Musk is the only American CEO I can instantly cite who is a visionary and can accomplish truly great things. But he’s repeatedly made claims that were patently untrue or skated very close to the line. Musk’s biggest whopper was claiming as far back as 2016 that the Tesla had full self-driving capabilities; it didn’t then, it doesn’t now, and some believe the vehicle never will. A Tesla engineer testified last month that at Musk’s behest the company faked a 2016 video purportedly showing a Tesla Model X driving itself.
Wall Street veteran Keith Fitz-Gerald today declared Musk “the new Steve Jobs” but Steve Wozniak, Apple’s co-founder, on Thursday drew a sharp distinction between the two executives.
Disney CEO Bob Iger’s self-promotion and deft media manipulation long distracted from disturbing truths about the company. Iger for years was hailed as one of America’s most socially responsible executives, despite the massive disparity of his pay relative to the company’s workers. In 2018, for example, Iger was paid $65.6 milllion — about 1,424 times the median Disney employee’s salary. The company for years enjoyed sweetheart tax deals in California and Florida.
Iger’s return as CEO late last year was one of the most disturbing incidents of corporate backstabbing I’ve ever read, and many of the problems that felled Bob Chapek, Iger’s brief successor, were Iger’s doing. Iger just announced a major restructuring that includes eliminating 7,000 jobs and trimming $5.5 billion in costs, a Hail Mary move to save his job. Seems like Disney accumulated considerable bloat under Iger, who repeatedly was hailed as one of the greatest CEOs of all time.
The track record of so-called Boomerang CEO’s is is dismal.
Marc Benioff, CEO of Salesforce, deserves credit for building his formidable software enterprise, but he got punch drunk drinking Davos founder Klaus Schwab’s Kool-Aid and he’s repeatedly distinguished himself as a bullshit raconteur extraordinaire.
Here’s Benioff celebrating himself and his other billionaire CEOs at the 2021 World Economic Forum: “In the pandemic, it was CEOs in many, many cases all over the world who were the heroes,” Benioff declared. “They’re the ones who stepped forward with their financial resources and the corporate resources, their employees, their factories, and pivoted rapidly – not for profit, but to save the world.”
Here’s an example, courtesy of Peter Goodman’s Davos Man, of Benioff’s altruism: In 2018, Benioff crowed about Salesforce and himself committing $7 million toward a successful 2018 campaign for a local ballot measure levying new taxes on San Francisco companies like his to curb homelessness. That same year Salesforce recorded more than $13 billion in revenues while paying no taxes.
Benioff for years talked up a storm about “stakeholder capitalism,” which holds that companies must serve the greater good of society, rather than just focus on profits. Yet when activist investors began circling his company, Benioff announced plans to fire 7,000 employees, or about 10 percent of his company’s workforce.
At the end of the day, the stakeholder who matters most to Benioff is himself.
Ford CEO Jim Farley, whose Detroit Free Press profile in October 2021 was the second most over-the-top corporate puff piece I’ve ever read, has gone from the toast of the automotive industry to the roast. Ford recently reported a huge four quarter profits miss, and by Farley’s own admission, the company “left about $2 billion of profit on the table” because it discovered that manufacturing EVs is a lot more complex than he realized.
Ford is a much sicker company than investors yet appreciate. The company issued nearly 70 recalls last year, a function of laying off the company’s most experienced engineers to save on pension costs and offshoring critical engineering and design jobs to India and Mexico.
Ford’s much ballyhooed Mustang Mach-E was just named by the publication HotCars among the company’s models to “avoid like the plague” because the vehicle’s maintenance and repair costs “will bankrupt you.” HotCars said the electric Mustang has already been recalled for multiple defects, including drive shaft issues and electrical system failure caused by an overheating battery. Another safety recall occurred when the seatbelt buckles were not attached to the floor correctly.
HotCars said the electric Mustang’s battery cooling system is a “known failure” and can destroy the battery. Unfortunately, many of the more serious drivetrain issues are unfixable because of the design of an electric car platform. The list price of a battery replacement is $23,000.
What was the most over-the-top corporate puff piece I ever read? (I knew you were wondering.) That was this Detroit Free Press profile last June about GM CEO Mary Barra and her efforts to transform the lumbering behemoth into a pioneering EV company that supposedly one day will run circles around Elon Musk’s Tesla.
GM just surprised Wall Street with better-than-expected fourth quarter profits selling the company’s gas guzzling, climate destroying trucks and SUVs. But if electric vehicles are the future, GM isn’t even yet a player. The company only sold about 40,000 EVs last year, and the company had to cut the price on its Chevy Bolts by about $6,000. That’s what happens when you recall vehicles because their batteries were catching fire.
In late December, GM announced it was recalling 140,000 Chevy Bolts because of a seat belt issue. Although the three-point seat belt was introduced in 1959, Ford and GM are clearly still struggling to perfect the technology.
Google CEO Sundar Pichai was until recently hailed for running the most compassionate and employee friendly companies in Silicon Valley but that’s fallen by the wayside. Hardly a day goes by when I don’t read about Google’s callousness discarding employees who gave the company years of service. I long thought that the best and brightest tech minds worked at Google, but the company’s recent AI debacle suggests otherwise.
I write about healthcare and I’m at a loss to come up with even one CEO at a major corporation who is driven to improve the quality of care in America. America’s healthcare industry is rife with corruption and there’s no shame or prison time for executives at major hospital systems whose institutions knowingly ripped off Medicare for billions of dollars. In fact, Jeffrey Zients, President Biden’s former Covid czar and soon-to-be chief of staff, is a noted Medicare fraudster himself.
I’m typically reluctant to declare an event “the end of an era.” But I’m hard pressed to come up with even one CEO or board member of a major U.S. corporation that I’d associate with McKenna’s reputed leadership talents and smarts and his unwavering commitment to the companies and communities he served.
McKenna was 93. By all accounts, he lived a life well lived.