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CEOs See an Outbreak of Rick Sanchez Syndrome

Late last week, CNN (TWX) fired anchor Rick Sanchez. During a satellite radio interview, he called Daily Show host Jon Stewart a bigot and complained that Jews controlled all of broadcasting, including his employer.

Clearly Sanchez didn't learn from the Correspondence School of Professional Broadcasting Screw-ups, or maybe he skipped the lesson on how to bludgeon your career in 15 easy minutes. However, a growing number of major corporations might like to take note. Maybe there's something in the air. A growing number of high profile CEOs seem to have picked up a case of Rick Sanchez Syndrome: a condition in which victims not only put both their feet in their mouths, but then hunt around for additional extremities to plug their gaping cavities.

The Sanchez rant was something to behold, if only to see what happens when a human being loses the ability to selectively suppress uttering every thought that comes to mind, no matter how banal, incorrect, foolish, or just ill-advised.

Granted, those in the media presumably could have some interest in public attention and go over the edge. However, you would expect that major corporations hire CEOs who have control, an understanding of public perception, and an ability to put personal interests after those of the company. Apparently, you'll more frequently be disappointed these days:

  • Yahoo (YHOO) CEO Carol Bartz has proven that she can, and will, let ego get the best of her, whether publicly dismissing a major shareholder, misrepresenting the company's history, angering major business partners, or comparing herself to Apple (AAPL) CEO Steve Jobs. Rumor has it that long-disgruntled stockholders are waiting for her to introduce the iQuit.
  • Oracle (ORCL) CEO Larry Ellison upbraid the HP (HPQ) board in an email to the New York Times for firing his friendMark Hurd as CEO. And then, just as the two companies were trying to repair the damage in their relationship, Ellison emailed the Wall Street Journal to complain about HP's choice for a new CEO. Mind you, HP is an Oracle competitor, but also a major customer. Can you say Microsoft (MSFT) SQL Server? Or, as someone told John Paczkowski at All Things Digital, "[Ellison has] spent $42 billion on acquisitions to still be No. 2 in software."
  • Google (GOOG) has concerned many over issues of privacy. And yet, CEO Eric Schmidt has made an amusingly large number of callous and clueless statements that provide fodder for conspiracy theorists. The fact that much of what he says is badly phrased and even meant in a different sense than taken only makes it worse.
  • Italian prime minister and media conglomerate CEO Silvio Berlusconi was caught on tape telling such a tasteless anti-Semitic joke -- with the Holocaust as a punchline -- that he managed to get condemnation from the Vatican. (Not that the Holy See has such moral high ground when it can say that the ordination of women priests is as grave a crime as priests sexually abusing children.
  • During the BP (BP) Gulf of Mexico oil spill crisis, Tony Hayward made so many foolish statements in such a short time that he probably set a record for compressed verbal stupidity. He also managed to lose his job in the process.
Mind you, these are just recent examples. There seems to be a never-ending supply (often from the same people). It raises the questions of why so many CEOs are inept in public discourse and how they still retain their jobs, with Hayward the exception that proves the rule.

I think the two are intricately related. There is a puzzling myth about CEOs and the irreplaceable need within the organization. Frankly -- with nods to some like Jobs, whose work, even if flawed, is impressive -- all too many don't seem to make that much difference. But the CEOs want to believe, as it justifies ego and compensation. The board and investors want to believe that someone will make them wealthy. CEOs come to believe in their own superiority and skills and, accordingly, assume that they can do no wrong.

Unfortunately, sometimes apparent financial success doesn't tell how much more successful the company should have been. For example, the remark about Ellison and $42 billion in acquisitions is sharply pointed and telling, as that is almost two full years of revenue for the company. Say that Oracle paid even four times revenue for the purchases. It would suggest that Ellison actually purchased half of the company's revenue since the late 1980s. Google has done well, but has been unable to pull out of its ad-dominated business model (and if the patent attacks from Microsoft and Apple continue unabated, the bright future of Android as a way to diversify revenue could have problems).

Nothing generally happens because CEOs consolidate power and influence within the board, often making it next to impossible to remove them, at least while times seem relatively good. And when they aren't, as we see with Yahoo? The potential for a corporate auto de fé is never really that far away.


Image: user vicbuster, site standard license.