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December 08, 2008
Life in the bubble
If the company you were running lost $10 billion this year, then you asked for a $10 million bonus, you'd be laughed out of the room, right?
Might you even be fired?
Not unless you work on Wall Street, where the CEO of Merrill Lynch says he deserves $10 million because the company would have lost more if not for his leadership. Perhaps, but he was stupid to ask for $10 million when he already makes an enormous salary with stately perks while nearly everyone thinks his industry is already overpaid and reckless with money. His bubble prevented him from sucking it up on a $750,000 salary until his company was profitable.
Before Detroit's Big 3 CEOs first showed up on congress' doorstep asking for monetary help, public opinion was about 50% against bailout help. With half of the country thinking the Big 3 don't deserve a nickel in help, each CEO takes an expensive company jet to Washington to ask for money. The symbolism of cluelessness couldn't have been more obvious unless they'd worn powdered wigs and gold-laced frocks to the hearings. After their first appearance before congress, public opinion against the bailout surged to 61%. Their bubbles made them oblivious to the obvious.
Socially constructed reality has changed so rapidly in the last few years it's a bit mind-boggling... but only if you haven't been checking in with blogs, message boards, social networks, or Twitter streams.
Companies incorporating in 2008 understand the importance of the word-of-mouth drivers of today's socially constructed reality, but we're seeing the tectonic fissures at nth-generation companies that don't. The more that established companies prevent the black-sheep variables inherent in a bigger bubble from entering their decision-making equations, the more they'll suffer the effects of socially constructed reality -- i.e., word of mouth driven by the jetstream of social media.
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Ben, Thanks for this post. I believe you’re right. These executives living in a bubble will be forced to become aware. Just as the CEOs of the car companies were forced to drive on their next trip to congress. Even if they're not paying attention to the conversations, they will either be marginalized or they'll have to catch up. Case in point is the recent presidential campaign. Obama figured out a way to connect and listen to the US voters while McCain missed the boat. I’m happy to see Obama continue by allowing his staff to be even more connected to voters.