Imagine a world that will reward failure. Not just once, but multiple times. Where you will succeed by doing badly or failing in your responsibilities. In addition, the more you fail, the bigger the rewards! Can you really imagine this? Surgeons would get bonuses for killing patients. Restaurants would get rich by serving bad food. Waiters or servers would get obscene tips for being rude and getting your order very wrong. Firefighters would get applause for letting buildings burn. Police get citations of valour for shooting victims. Moreover, of course, corporate execs are rewarded for running companies into the ground. Madness! On the other hand, is it?
It is obvious we would not tolerate some of these forms of failure. To do so would be absurd. However, what about corporate execs? How many times have you heard of the Execs who “do badly” and then get £millions in payoffs? They fail and fail and fail and in return, they get these “Golden parachutes” to exit the company with riches beyond belief! Why?
Kleptocrats in control
It is because of self-serving kleptocratic behaviour at senior levels of organisations who reward success or reward failure alike. The “old boys club” at its finest (even though its members are both male and females in today’s world). The one common trait the “members” all share is serving their own interests. First and foremost above all else. Because they want to ensure their coffers are full, no matter what happens. They are hired with safeguards in their contracts are in place, up front. In addition, make no mistake. They will be paid no matter how well or badly they do.
If they do well, and do everything great, they get outrageous bonuses. Make too many mistakes? They get to try repeatedly, again and again. If they make too many mistakes over a long period of time, they are eventually asked to “step down”. Does not matter to them, as they will move on to their next failure in their next company. Whistling a little tune as they cash in their “severance pay” which would make the average person cry!
A recent example of failure
Check out this classic example here. Read it if you dare. How one exec got a lovely Golden Parachute. By causing the company to lose over 60% of its value in 3 years! His reward was £2.3M leaving pay out and a further £1M for NOT working elsewhere, for the next 9 months. Can you imagine? Pay-out for bad Leadership!
Now remember. All these people at the Exec level from corporate board member to CEO are all members of the “old boys club”. Moreover, since they are all playing the same game, they all support this to ensure their own “Golden parachutes” remain intact.
There is more…
Another case in point where (of course) we cannot mention specific names. A certain Thames Water chief executive who was named to the job in Sep 2016 was “fired” in May 2019 for repeated failures over many months to hit targets, paying out massive fines, causing catastrophe after catastrophe! For those who are customers, how do you feel knowing that in 2019, you were paying for 151 million gallons being “lost” through leaks? A quarter of the entire supply for that year! Exit our leader now with a nice hefty £2M payoff + an additional £770K to cover his 12-month notice period.
To make matters even worse, the same incompetents that hired this person gave a £3.1M “Golden Hello” to the new chief executive in April of this year, 2020!
How do you fix this?
Sad to say, but the same losers that support the “old boys club” will ensure this kind of “reward failure” mentality continues everywhere you look. The same individuals who are supposed to set policies for their corporate management and oversight. The Board of Directors level. Remember. Their own self-interests are at stake whether they are a retail, wholesale or public service company.
The best we can hope for is that government finally listen to the public outcry for “competence” and put “teeth” into legislation that would allow the mandatory re-nationalisation of failing public services. This would regulate and put an end to this form of obscene behaviour for vital services that people must have. As an example, the NHS needs to stay FULLY under government control. Other sector services that should be looked at would include rail transport and utilities.
Other sectors such as manufacturing, construction, retail, etc., should have tighter government control over “big boss pay-outs”. Since it is obvious that their own form of self-governance at this level is ludicrous.
Sad though, yes? That we the customers pay extra for incompetence. With corporations clearly backing this Win/Win kleptocratic behaviour. Let us hope this behaviour is not entrenched too deeply in government also!
