How CEOs Speak

In (of all things) a discussion of last night’s SOTU address, Megan McArdle describes listening to CEOs talk to financial analysts on earnings calls. I never used to do that; all the times I’ve heard CEOs talk to me it was because I was one of their underlings. But one thing certainly seems to be the same, no matter whom the CEO is talking to:

The absolute favorite tactic, however, is the management reorganization. You may be in a saturated market where your second-rate franchisees are slowly destroying your brand, making it impossible to attract higher-quality franchisees . . . but that’s nothing that can’t be fixed by creating a new Chief Strategy Officer under the CEO, and giving that officer oversight of marketing, research, and HR. Perhaps a much larger competitor whose cost structure allows them to undercut your prices by 32% has entered your niche, but can they really withstand the fearsome might of your ISO 9000 certification and your new cross-functional product teams? The government regulators who just outlawed your three top-selling products and made two-thirds of your capital plant obsolete may be powerful–but not as powerful as your revolutionary sales force compensation scheme!