Thursday, February 5, 2009

Corporate Structure

The view most people have of corporate America lacks perspective. I know this because I am both a consumer of the news and deeply embedded in corporate America. High enough to see what’s going on, low enough to be under the radar, mostly. Listening to the media, you get this picture of malevolent beasts sitting high up in corporate towers plotting against the lowly consumer. Of course, if you would just turn off the TV and think a minute, you would understand that the whole point of a corporation is to help the lowly consumer. Corporations hope that they will rise above their current station in life so they can buy more stuff. Nobody in any corporation wants to kill you. Relax. What they want to do is sell you gadgets. If you are poor they want to sell you a cheap gadget, if you are rich they want to sell you an expensive gadget…and in order to sell the most profitable gadgets, you need to prosper. Corporate America loves you.

Corporations are a lot like governments. While they aren’t efficient enough to purposely harm anyone; they are big enough to trip and fall on you, though seldom intentionally. In a normal corporate organization, there are kings, there are princes, and then there are peons. The kings make vague references, the princes make strategic decisions about those references and the peons make sure that no work occurs that makes their prince look bad. Then there are stockholders, a mix of peons, institutions, kings and princes. A corporate Vice President of a Fortune 500 company, whom I know, is fond of saying “when the elephants dance, the pigmies die.” You see, the princes are always jousting with one another in the hopes that they will one day become king. Princes are judged and rewarded on how little money they spend. Being a prince in a corporation is a very stressful position and is like dancing in a spotlight in the middle of a crystal store. You must keep dancing and you must break less than the prince dancing alongside you. (I am sticking to masculine pronouns and titles king and prince instead of queen and princess as those words have meanings not in play here.)

There is also an ego factor. Kings and princes do not get to be kings and princes without a whole lot of butt kissing and once you reach a certain level it is your butt being kissed. Those of us with souls who don’t kiss any butt or desire our own butt kissed are called managers and directors and that is all we will ever be called. So as a manager or director, one has to be careful around the kings and princes. They are always on the lookout for someone who isn’t properly in awe of their mere presence. If you are incredibly competent, efficient, and you always make your prince look good, he will often overlook some level of non-butt kissing or deference to his exalted position. However, you must be constantly aware of how their ego swings in this regard. In addition to being egotistical in the extreme, they are volatile and unpredictable. It is a short trip from golden boy to “who used to sit over there?”

The entire list of corporate levels are: intern, assistant peon, peon, senior peon, supervisor, assistant manager, manager, senior manager, director, senior director, prince, senior prince, executive prince, and king. This hierarchy, taken to an extreme can be a sign of an unhealthy business model. The company with the fewest layers between king and peon is much more likely to be consistently profitable. Everybody knows this. Those companies that have thick layers pretend it is not true. At the very top, just past king, is CEO. The CEO sets the tone for everything that happens. Usually such a person is rich beyond belief and doesn’t really have any skin in the fight. To them it is just a game. They don’t come to work thinking that if they lose their job they will lose their home or starve to death. They are in zero danger of losing anything other than ego. It is a little disheartening. Fortunately for us peons, the average CEO is really into the game and sees their reputation as every bit as important as us peons having something to eat.

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