The Bozo Bomber

Physical attacks and cyberattacks get most of the attention, but I would bet that far more enterprises are harmed, and much more financial damage is done, by the kind of menace who sows the seeds of destruction from within: the bozo bomber.

If you own a business, or run one (or both), you might want to resolve this year to root out this threat, or to clean up the damage if you have already been struck.

You might be familiar with the bozo bomber, or the related term “bozo explosion,” if you have worked in Silicon Valley. Otherwise, you probably aren’t. But most every experienced manager has run across at least one bozo bomber in real life.

Steve Jobs is sometimes credited with coining the term bozo bomber to describe an incompetent executive, who then promotes incompetent managers, who in turn recruit and develop incompetent personnel at all levels of the organization. It is distinct from, but related to, the “Peter Principle,” a theory advanced in 1969 that in an organizational hierarchy, every individual tends to rise to his or her level of incompetence. In other words, we promote people who are doing a good job until they reach a point where they start doing a bad job, and then we keep them there. Dr. Laurence J. Peter and Raymond Hull wrote a humorous book about this phenomenon, but like a lot of humor, it contained more than a little bit of truth. So, too, did Jobs’ less-lighthearted observation about the tendency of supervisors to hire less-than-stellar underlings.

We are a little more nuanced in the way we approach management in the 21st century, as compared to the militaristic view of corporate life that the Greatest Generation (led by people who served in World War II and Korea) brought into the business world of the 1950s and 60s. The Peter Principle blames the organization itself for promoting incompetence. Promotion was seen as something that automatically followed a certain tenure in a position when accompanied by satisfactory performance review. It was like getting promoted from grade to grade in elementary school simply for passing all your classes, which was what happened before we invented high-stakes testing.

These days, we recognize more individual distinctions. Taken to its extreme, Jobs’ view (if in fact it was he who originated the bozo bomber terminology) is that you can divide senior managers into two categories: stars and bozos. (Millennials, be advised: The original Bozo was a television clown who entertained your baby boomer parents in the 1960s.) Stars are self-confident high achievers. They want the organization to succeed, and the way they see it, the best way to do that is to work with as many other stars as possible; indeed, stars tend to be impatient with lesser performers. The star executive does not worry about being eclipsed by an underling. She or he feels emotionally and professionally secure, and takes pride in having a protege who becomes a star as well. Stars, as you might imagine, make excellent mentors.

Bozos are the opposite. A bozo is always prepared to hog the credit and avoid the blame. While a star welcomes diverging views in a meeting and is quick to applaud someone else’s better idea, a bozo is concerned about being contradicted or embarrassed. A bozo sees the people he supervises as an ecosystem whose function is to support his or her professional advancement. To a bozo, the organization’s ultimate success is at best a secondary concern, except to the extent that it personally benefits the bozo.

The higher the bozo’s place in an organization, the greater the potential damage. I have seen business owners who are bozos. They relish being the top dog in part because it protects them from the risk of being exposed. This sort of bozo might even succeed in a small-office setting, working as an accountant or a lawyer or a dentist or an architect, because the bozo may possess sufficient technical skill to attract paying customers. Such a manager can’t grow a business very well, because she will not develop people who can perform at her level or higher. This sort of business is unlikely to survive independently beyond the founder, because there will be nobody in place who can keep it going. One of the most destructive aspects of bozos in the CEO role is that they inevitably drive out their best talent.

Bozos at lower levels in the organization can be kept in check by stars at the top, but they are always bad for morale. And the more hiring and promotion responsibility a bozo holds, the greater the damage he will do. Just as birds of a feather flock together, bozos like to hire other bozos. Show me an organization that is riven by internal politics, and I will show you a company – or an agency, or a charity – that is full of bozos. Don’t think bozos operate only in the private sector. In fact, the lack of bottom-line accountability probably makes many public-sector workplaces fine breeding and training grounds for bozos. When one bozo hires other bozos, who in turn hire still more bozos, you have a bozo explosion – and an organization that is unlikely to succeed.

The real world is not this extreme, of course. Not everyone is either an A player (the star) or a D player (the profound incompetent). Most, in fact, are going to be Bs and Cs – people who are good at some things, and mediocre or worse at others. Yet even a B or C player can reject bozo tendencies by hiring the best possible people, teaching them as much as possible and then staying out of the way. But this happy outcome is most likely to occur, in my experience, if top management encourages and recognizes such selflessness, while cracking down hard on selfish and destructive behavior.

So take a good look at the people who work for you, and the people who work for them. Is your workplace infested with bozos? Do they make the workday unpleasant for those around them? Are they always telling you how wonderful they are, and how they are not responsible for bad things that happen on their watch? Do they bad-mouth their subordinates without ever having a plan to either improve or replace them?

Sure, you can make yet another New Year’s resolution to lose a few pounds and listen to more programming on public radio. Or you can decide to try to lose a few bozos instead. Whatever your choice, I hope you have a happy and successful year in 2015.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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