The cult of celebrity is not only present in entertainment, sports, and politics, it’s in business as well. CEOs that get the most attention aren’t necessarily competing better than the rest. In the news doesn’t mean in the know.
Here’s a true story. A friend of mine, Bruce Hamilton, won the Professional Bowlers Association (PBA) championship some years ago. He laments that his skill is in bowling and not in golf. His prize was nice but the Professional Golf Association (PGA) championship paid seven times as much in that year. Would we say the PGA champ was seven times as skillful as my friend?
In 2013, the PGA champ was paid 28.9 times as much as the PBA champ, up from seven times. Would we say that skill at golfing is growing faster than skill at bowling?
How many top golfers can you name? How many top bowlers? (I can name one.)
We have, in business, a cult of celebrity rather than a cult of strategy. Try this: who’s the CEO of Facebook and who’s the CEO of DuPont?
Facebook was founded in 2004. If you’re reading this essay you surely know Facebook’s CEO is Mark Zuckerberg, a person I previously acknowledged might already be very smart even if other people want to wait and see (We’ll See How Smart Mark Zuckerberg Is.) Facebook will make it onto the 2015 Fortune 500 if, for a year, it maintains anything close to its second-quarter 2014 sales of $2.9 billion.
E. I. du Pont de Nemours and Company was founded in 1802. It is one of the oldest companies in the United States. DuPont has been in the Fortune 500 as long as there’s been a Fortune 500. It is #86 in the 2014 list, with annual revenue of $36.5 billion and profits of $4.8 billion. I didn’t know Ellen Kullman is the CEO of DuPont until I read it here a moment ago.
Facebook’s product — that is, what it sells — is advertising space on electronic screens. Tiny billboards. Of Facebook’s $2.9 billion in Q2 revenue, $2.7 billion came from advertising.
If all traces of DuPont were suddenly to vanish, buildings wouldn’t breathe while remaining watertight (Tyvek®), firefighters and Air Force pilots wouldn’t be protected from fire (Nomex®), “ballistic and stab-resistant armor…[wouldn’t] allow heroes to be heroes” (Kevlar®), and fried eggs wouldn’t slide off ungreased pans (Teflon®).
If all traces of Facebook were suddenly to vanish, advertisers would have to find other means to intrude and people would have to find other ways to like one another.
I don’t mean to express approval or disapproval of either company. It’s not about them; this Teflon-slick essay would be equally likeable if I’d focused on General Electric and Twitter. As a jaded practitioner and curious student of competitive strategy, I just like to notice things and ask questions about them. For example, why is Facebook so much more celebrated than DuPont?
Here’s what I mean by so much more celebrated. I had Google search for “DuPont news” and “Facebook news.” The DuPont search turned up “about 27,700,000 results.” The Facebook search: “about 7,640,000,000 results.” People are creating, or at least Google is finding, 275.8 times more results for Facebook than for DuPont.
A search for “DuPont strategy” and “Facebook strategy” turned up 6,390,000 and 236,000,000 results, respectively, for a 36.9-fold difference. “Kullman strategy” and “Zuckerberg strategy” produced a 33.7-fold difference: 48,100 versus 1,620,000. It seems Facebook’s celebrity advantage over DuPont is greater than golf’s is to bowling.
It’s not a big shock. It’s much more exciting when a toddler takes its first steps than when a middle-aged person keeps strolling along. But who’s got more to say about the skill of competing? To whom should we be listening?
The issue isn’t Ms. Kullman or Mr. Zuckerberg. They’re not the ones creating all the Google “results.” The issue is what’s considered important enough for people to write “results” about.
People pay 33.7 to 275.8 times more attention to fast and social than to steady and stuff. Why? By any metric DuPont is more consequential than Facebook unless you consider a mere increase in human interaction (which was already plentiful in my opinion) as consequential as healthy homes, safer firefighters and pilots, unshot and unstabbed heroes, and foods cooked without grease. Moreover, it has demonstrated the skill it takes to thrive for centuries. That skill goes beyond any individual CEO (Ms. Kullman is DuPont’s 19th).
I don’t doubt that Mr. Zuckerberg is a smart guy driven to work hard to establish his business. That said, and with no disrespect, he’s got a ten-year-old business, highly focused in one area, where he won a there-at-the-right-time lottery as much as he displayed competitive skill. There’s no question, too, that Ms. Kullman is not responsible for the centuries of positive results in numerous product lines that preceded her arrival at DuPont. On the other hand, a highly successful company with a long track record chose Ms. Kullman as its CEO.
I don’t know whether Ms. Kullman is more-skilled or less-skilled than Mr. Zuckerberg. I haven’t met either of them and I haven’t studied their decision-making. The question I’m raising is whether that 33.7-to-275.8-fold difference in attention makes sense with what we do know. What we know is that Mr. Zuckerberg hit a hole in one on his first swing. That doesn’t tell us he’s a celebrity or a strategist. It tells us he hit a hole in one on his first swing.
Here’s another true story. Years ago I tried bowling. I’m left-handed and I was doing miserably. I switched to my right hand. The first ball I rolled: a strike! The next ball I dropped on my foot. What, exactly, is my level of right-handed skill? On average, five pins and a semi-painful foot?
When we search for advice on competitive strategy, we should seek not fame but skill. The trick is to tell the difference. It’s not easy — see, for example, “Success Is In a Word” — and it’s especially not easy when we have little evidence. It’s such a tough issue I’m writing a book on it. Meanwhile, I recommend this: when you choose whom to admire and emulate, consider whether you’re choosing a celebrity or a strategist.