On management lessons drawn from O'Brien-Leno spat...

I was reading that timely article on the management lessons that can be drawn from the very public Conan O'Brien-Jay Leno spat, over "The Tonight Show".

One of the main management lessons to take away from this messy episode, is how poorly the NBC management has handled the whole situation, which include a very poorly made decision back in 2004 to promise O'Brien to take over the show from Leno in 2009. The world has changed in those five long years, not the least contributed by the failed experiment to move Leno to the 10pm time slot, and thus O'Brien to the 11:35pm spot. Neither worked, and both guys sank. In the midst of it, NBC threw O'Brien under the train, and tried to hustle Leno back to his old 11:35pm spot. O'Brien refused to leave, without putting up a fight, or at least a very public rebuff on how NBC has slighted (more like humiliated) him, by pushing him off.

Well, business decisions are business decisions. If Leno didn't make out at 10pm, and O'Brien did even worse at 11:35pm, something has to be done. I fully understand that. But given the 2004 NBC promise to O'Brien that he would have the show at 11:35pm in 2009, and that NBC tries to finagle its way out of the deal, is rather hard to argue for.

If anyone should be pushed under the train, those in NBC management who made the 2004 promise and arrangement, should have been the first ones to go under the train. Morally speaking, that's the right thing to do. Sure, O'Brien will still have to be dragged out, kicking and screaming, but at least he can't claim the mantle to be the first one to get the axe.

That's a very sensible management lesson.

In the larger scheme of things, the same management mistakes are playing out all over corporate America though. Judged by the upfront, hugely outsized CEO packages that corporate boards have promised their CEO when they come on board, only to find out that the CEO is incompetent at best, and they would have to be very gently pushed out of the door, with lots and lots of dough from the shareholders.

Truth be told, there's really no sure bet to ensure that a CEO (or another O'Brien) can really pull a hat trick, like Steve Jobs has done to Apple. But what the board can do, at the very least, is to ensure they don't overpay, and performance is measured over a longer term horizon, and compensation is measured by long-term performance (at least five years out). And why would anyone feels compelled to pay hundreds of millions of dollars to an unproven CEO, upfront, anyways?

Warren Buffet has it exactly right: That there must be a downside to the CEO, or the CEO has no skin in the game. At least there's someone who talks sense in corporate America. Too bad there's only one Buffet.