Lack of Agility by CEOs to Blame for Slow Recovery

By Brian Lucas

This one is for my good friend Anthony to give his active mind a new opportunity for investing.

“When you get the majority of the economy predictable, you’re gonna get faster job growth, and companies investing more. But actually, the best return for companies is when things are really going the wrong way, and you’re willing to go against the tide.”  “I would argue that your chance to break away is now as opposed to twelve months from now when hopefully governments get more predictable with their policies. In many of our industries, if you’re risk averse, you get left behind.” -John Chambers

Many of you have asked me to write more articles on agile thinking and the economy.  Ok, here is the take away. Being agile is being adaptive.  Being adaptive is being innovative.  There is not enough innovation coming from CEOs today and that is hurting the economy!

Consider the United States (US) economy.  The US economy is arguably the world’s largest single national economy. The US gross domestic product (GDP) was estimated to be $16.62 trillion in 2012, about a quarter of the global GDP[1].  The US has a diversified economy and traditionally has maintained a stable overall GDP growth rate with moderate unemployment compared to worldwide rates.  Best of all in the past we have boasted high levels of investment in research and capital formation.[2]  According to the National Bureau of Economic Research, the recovery officially started back in June of 2009.  Why in August of 2013 is the current recovery still slow with the Federal Reserve pumping out so much money into the economy?  Here are statistics that may surprise you.

Corporate profitability as a share of the economy recently hit a high of 11%.  The normal average is only 5.5%.[3]  Corporate profits overall are 60% higher[4].  The cash on corporate balance sheets is up from a normal average of 6.6% to 11% reaching $1.8 trillion at the end of 2012[5].  Even the federal budget deficit is actually shrinking rapidly, from over 8% of GDP in March 2012 to less than 6% in March 2013[6].

Yet, the current expansion is the weakest in the post–World War II era.  GDP is only 8% higher than it was when the recovery officially began.  Recoveries since World War II averaged a GDP 16% higher than it is now.  The Federal Housing Finance Agency‘s all-transactions home price index, showed two consecutive quarter increases at the end of 2012, but the index remains 7% below its June 2009 level.  While payrolls increased over the past 31 months, adding 5.5 million jobs to the economy, there are still 2.6 million fewer nonfarm workers than there were at the start of 2008[7].  Without doubt, the post 2008 period following this recession has been the weakest of the post–World War II era expansions.

So, why IS this recovery slow?  The answer is it lacks capitalization.  CEOs are being ultraconservative and this is impacting the economy negatively.  Since the recession, too many CEOs have practiced a strategy of cutting costs across the board rather than investing.  They are pushing the workforce as hard as possible to increase productivity without making any efforts to innovate.  After all, the rate of manufacturing and industrial modernization and expansion is down 12% since 2006 and at its lowest rate in 60 years[8].

This is not a capital formation strategy.  It is a short term tactic to maximize profits and has been the downfall of many an organization.  This is directly hurting the economy because the potential growth rate in the economy is related to worker productivity as well as workforce growth.  The capital base across the US is for the most part back where it was during the recession.  This lack of capital formation negatively affects worker productivity.  As a result the growth rate has reduced to 1.8% when the prerecession rate hovered at 4% it is expected to rise only to 2.5% at the current rate of capital formation[9].  Workforce productivity is also fed by worker led innovation.  This is starved when the workforce is dissatisfied with management.  In the US, 32% said they would leave their current employer[10].  Why are so many CEOs being so timid?

Among the rants and complaints are the cries of corporate taxes being too high[11].  The numbers don’t support this.  The current corporate tax rate is 35%.  Yet the 10 most profitable U.S. companies only paid an average federal tax rate of only 9% last year[12].  Among them were Apple, General Electric, Exxon Mobil, JPMorgan Chase and Microsoft.  Exxon Mobil actually only paid 2%.  In fact, the effective corporate tax rate is currently at a 40 year low[13].  And as you saw previously corporate profits are high.  The complaint about taxes just doesn’t stand the light of day.  So what is the real reason a significant number of CEOs are not being innovative?

Today many large corporations are run by very risk avoidance thinking CEOs who grew up in business and made their way to the top by not being bold and innovative, but by being political survivors.  They generally have great personal wealth from either from preexisting positions or heredity and take few risks with their own money.  Many came into power just before the financial crisis or in the early part of the recession.  This includes more than 60% of CEOs of Standard & Poor’s 500 index member companies who assumed their roles since 2007[14].  They have allowed themselves to be governed by these negatives, rather than the opportunities before them.

They have pushed this negative psychology down through the management structure, driving their corporate decision makers to operate in a very defensive posture.  They not only keep a considerable cash balance, they also focus on increasing both dividends and repurchase of stock.  In 2012, these companies in the S&P 500 bought back more than $400 billion worth of their own stock[15].  This was generally great for CEO pay and temporarily boosted the per share reported earnings.  In 2013, Goldman Sachs maintains this rate has doubled.  With cheap debt due to the Feds action, high stock prices and record profits CEOs should be looking for growth from mergers and acquisitions.  However, the number of offers in the US for mergers and acquisitions is down 10% so far in 2013[16], while 2012 was 20% below historical normal percentage of total stock-market value.  Ultimately this decreases the company’s overall strength.

The average CEO of a large corporation has been in the position for six years.  The normal life of this type of CEO is 7 to 8 years.  Naturally these CEOs are conditioned to avoid risks rather than seek out new opportunities.  So it is understandable why they are behaving this way, even though it is not ultimately good for their enterprise or helping build the future of business or the US economy.  CEOs are being geared to short term paybacks rather than strategic growth.  As I said in my article Why CEOs Fail in Today’s Agile Business Environment, CEO compensation is at an all-time high in America with top bosses enjoying pay hikes of between 27 and 40%.  This is amazingly disingenuous since compensation for the majority of Americans is flat.

So what should CEOs do?  The answer is they need to invest in innovation and partner with their workforce as never before.  The strategy of belt-tightening is not conducive to innovation.  Innovation and workforce productivity come from motivated and engaged employees.  That doesn’t happen when the enterprise does not invest in the future of the company while the CEO is raking in record compensation and employee compensation is at best flat.  These employees will show little loyalty to the company and leave at the first opportunity and opportunity it beginning to happen.  Every business person should know that it is costly to onboard a new employee, particularly when it is replacing an experienced technical employee.  How will your company run if 32% of your employees leave?

But it does not have to be that way.  Look at what Ford Motor Company has done.  Ford encourages innovation with constant brainstorming sessions on designs and creativity.  Ford proves this works by developing some of the top rated vehicles in the United States.  They also pride themselves on having initiatives to stimulate future growth. They introduced 100% post-industrial material in the Ford Escape back in 2008 and it is estimated to conserve 600,000 gallons of water during production. Their new painting process is also estimated to reduce CO2 emissions per vehicles by 10% and would reduce a factory footprint by 15%.  They use an innovative EcoBoost technology which combines dual turbo chargers and direct fuel injection giving a V-6 the feel of a V-8 engine[17].

Ford has not stopped there.  Ford supports research by pairing up with some of the world’s brightest university professors and students to explore a wide range of new ideas and technologies.  In 2010 alone, Ford awarded 13 University Research Program grants to 12 different universities, including Wayne State University in Detroit and Stanford University in Palo Alto, California.  They are all championed by Ford research teams and range from testing the properties of thermoplastics modified with nano-materials to developing an in-vehicle safety alert system for diabetic drivers[18].

There are other examples, of course, but I have great deal of respect for William Clay “Bill” Ford, Jr. and Alan Mulally.  Bill Ford has done a truly amazing job since he took over as Chief Executive Officer in 2001, from Jacques Nasser.  Nasser had the same short sightedness many CEOs have today.  He focused on maximizing corporate profits and shareholder value.  Bill Ford has a proven record of valuing people and innovation.  In 2006, Ford stepped down as President and CEO, naming former Boeing senior executive Alan Mulally as his replacement. Bill Ford remains the company’s Executive Chairman[19].

Ford is a true American success story coming back from the precipice without the aid of government bailout money.  This could never have happened if Ford’s leadership continued the path of narrow minded cost cutting and maximizing short term stock prices.  It took a CEO of courage, vision, an appreciation of people and an understanding of the need to innovate and invest in the enterprise’s future to save them.  In other words, Bill Ford was agile.  The results are undeniable, 2012 was one of Ford’s most profitable years in North America[20].  Bill Ford is a man who knows how to take responsibility, is not afraid to adapt to a changing circumstance and does not whine about trouble.  I leave a message for every executive manager in America from one of my favorite Presidents, Theodore Roosevelt, “If you could kick the person in the pants responsible for most of your trouble, you wouldn’t sit for a month.”  Remember till next time – Keep Agile!


[1] See the Bureau of Economic Analysis, Department of Commerce http://www.bea.gov/.

[2] See  http://www.sfc.hk/web/doc/EN/research/stat/a01.pdf, Sohl, Jeffrey (March 31, 2010). “Full Year 2009 Angel Market Trends”. University of New Hampshire Center for Venture Research.

[3] See Economic Research Federal Reserve Bank http://research.stlouisfed.org/fred2/graph/?g=cSh

[11] In the interests of brevity, I am setting aside the uncertain health care costs for a later post.

[16] The numbers would have been considerable worse except for several large deals such as Dell Inc.’s privatization, Berkshire Hathaway Inc.’s purchase of H.J. Heinz Company and the buyout of BMC Software Inc.

[19] FYI Bill Ford donates most of his compensation to charity.

About Brian Lucas

In his life, Brian Lucas has been a coach, farm worker, forester, health care advocate, life guard, general contractor, mechanic, mixologist, musician/singer (in a rock group), salesman and teacher. Brian has worked as a project manager, technical marketer, methodologist, manager, software architect, systems designer, data modeler, business analyst, systems programmer, software developer and creative writer. These efforts include over a hundred hi-tech initiatives in almost every business and industrial sector as well as government and military projects. Among them, he designed and developed a quality assurance system for the first transatlantic fiber optic communications network, a manufacturing system for a large computer manufacture’s seven manufacturing centers, a data mining system for steel production, an instrumentation system for cable systems, defined requirements for government’s information systems and designed and developed human performance management systems. Brian has educated and mentored many over the years, designing programs to discover and develop talent. He has also lectured extensively to a variety of audiences. Brian is currently devoting as much time as possible to the innovation of business agility and human capital management along with the next generation of agile software development. As an amateur theoretical physicist he is working on joining general relativity and quantum mechanics through a multidimensional time corollary on string theory and negating the uncertainty principle with Louis de Broglie’s wave/particle hypothesis. He is also an avid blue-water sailor and wilderness backpacker. He enjoys billiards, boxing, chess, cooking, famous battle reenactments and war gaming, fencing, flying, gardening, horseback riding, martial arts (particularly Ninjutsu), philosophy and psychology, playing musical instruments (7 so far), poker, rapid-fire target shooting, reading (he tries to read a new book every night), painting with oils, scuba diving, skiing and recently writing novels.
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39 Responses to Lack of Agility by CEOs to Blame for Slow Recovery

  1. Jack says:

    Great article Brian! I see you took Anthony’s hint and wrote more on the economy. I caught it hot off the press! This is once again a central truth told in a direct and readable fashion with logic and fact that I very much admire in your blog. -Jack

  2. Anthony says:

    Wow!!! Super..This was surely worth the wait..you have spoke to me about Ford many times in the past, but to have it all in writing is a gift. This topic, I’m sure is a hot one around board rooms.. I am really speechless. In defense for some of these lackluster CEO’s i feel their ability to manage and grow is hindered by their fear in this non-business oriented government leadership ( I use leadership lightly). Between the Health care debacle and immigration fiasco, constant manipulation of events by the media etc..they are afraid to spend money not knowing what “costly REFORM” or outside occurance (i.e. terrorism) lies around the corner.That will shake-up the economy or its recovery..
    That being said a true Agile CEO can plan and navigate any agenda that is thrown at them..so inevitably the blame is still on them..

    • Brian Lucas says:

      Thank you Anthony! I am glad you liked this since you inspired it. I agree with you that some CEOs are generally concerned, but their actions are making their fears self fulfilling. As a very conservative, Republican friend of mine told me not long ago, it accomplished nothing to bemoan a government and use it as an excuse for business issues. Real leaders he said will express their support or opposition and then go on seeking new opportunities for their businesses. In times when the government is thought not to be business friendly their should be even more opportunity to advance your business scope as less healthy organizations become ripe for takeover or fail entirely making their customers available. He is of course a real leader. Theodore Roosevelt who had so many challenges in his life and yet accomplished a tremendous amount as a President and a man. His quote at the end of the article is one of my most favorite and I keep in on my Droid Bionic to look at if ever I feel like whining. It will be interesting to see the comments here. I hope you will feel free to answer any and voice your opinion even or maybe I should say especially when it differs from mine. Intelligent discussion is how we become smarter. -Brian

    • Doug (last name held by request) says:

      Anthony as a CEO, I can tell you that I am disgusted and sick with government spending and its inability to balance a budget and make decisions of self sacrifice as we have to in the business world. That is the primary reason as you pointed out that many of us have acted with caution. Your second point is also well taken and I agree that it is unhealthy for any business to go through a five year period of stagnation. Growth must happen on a minimum of a two year cycle. Brian’s friend he quoted in his response is right as was the quote from the CEO of Cisco at the start of this article. In challenging times we must challenge ourselves to find new avenues of growth not just practice cost control. Thank you Mr. Lucas for this professional analysis and solid research. It is a shame you don’t write a financial blog. I for one have begun to be more agile as you would put it. I hope the economy responds in kind.

  3. Elaine says:

    Oh Brian! The vast scope of your knowledge never ceases to amaze me. Whether its physics, computers, medicine, history, business, philosophy, geology, survival tactics or gormet cooking, you always have something informative and intelligent to share. I know how important your blog is to you and I am so very happy to see that you are taking the time to write articles again. It is so unbelievably amazing how you can cut through the fog of irrelevant facts, misinformation and fabrications to get to the truth. You are the most incredible person I know. Thank you for being you!

  4. Sally says:

    Brian another impressive financial post! I love how you developed the logic here and made your point directly without the heavy condemnation and sarcasm to which some others always retreat. I will definitely use this post to help convince some of the CEOs I am dealing with to invest in a reorganization instead of just a workforce across the board cut. Thanks goes to Anthony for getting you to write this one I guess. lol

    • Anthony says:

      Sally
      I know your a regular reader and post comments.. So you should know that all these posts are Brian’s ideas, thoughts and the research is done only by him.. This is all made possible by his hard work and his enjoyment of writing.. So there is no need to guess,thanks should go directly to Brian.. Hope this helped with your quagmire on who to thank..lol

      • Sally says:

        Oh Anthony you are a trip! No wonder Brian speaks so highly of you. I think you should be a guest writer on Brian’s blog if you have the time. I know it has been very tough on Brian since Memorial Day to find the time. I missed his webinar last week, but he sent me the slides. He is so well read and has such broad and deep knowledge it never ceases to astound me. I am so glad I had the opportunity to actually meet him. -Sally

      • Anthony Bustamante says:

        My fellow Anthony – I disagree. You poked Brian once on a hint to write something like this and a little while later this masterpiece pops out. You must have some kind of pull with him. Ha, Ha! Hey you know the way Brian puts it makes me mad as heck. As much as I don’t care for the government, I dislike bigwigs sitting on a pile of money, raking in record profits and laying off the workers. I wonder if you can get Brian to post a list of companies he’d invest in or maybe you will. Hey before you start yelling, you can’t blame a guy for trying. When I find smart guys like you and Brian I have learned to ask for advice, then shut up and listen.

  5. Genica says:

    It is so good go see that you are posting again Brian and what a post this was. There is so much downright prevarication coming from the news media on this, it was hard to know what to believe. You’ve made a clear and compelling case for CEOs bunker mentality being the culprit. I’ll have to read this again when I have more time, but I am going to forward it on to all my friends saying, hey I actually know this guy! lol Keep finding the time to write Brian, I know it is important to you. – Genica

  6. Carol says:

    Hi Brian: I am not sure I understand all the statistics here. I do know that you are showing that executives who are making a great deal of money are trading the long term health of their company for their short term gain. That makes me angry. How can they hurt their workers like that. I was very inspired by what you wrote about Bill Ford. It is so good that you ended the article on a positive example and a huge one at that. Take care! :Carol

  7. Fran says:

    Sock it to them Brian!!!! You tell it like it is, straight out and no nonsence! And you do it without making it personal or derogatory. I wish you’d run for President. Your friend Frannie

  8. James Heins says:

    Mr. Lucas as an investor I have to say your analysis is quite sound and well researched. What adds to its splendor is that it is so easy to read. I do have a question for you and perhaps your friend Anthony. Do you see the improving economy and market pressure for production forcing CEOs who have not been in an expansive mode being forced to reverse their strategy and if so when.

    • Anthony says:

      James,
      Absolutely!! Lackluster CEOs will have to reverse their strategy. If not they will either be dismissed by the board members for their lack of growth and leadership or gobbled up in a takeover from a more aggressive and agile thinking management team looking to expand. Their are very few products or services in the world which are of the proprietary nature. So its either grow and produce or be taken over by a larger conglomerate that your business could add to the growth of their balance sheet. For example, Clorox buying SOS, which was a sole stagnated product at the time. The best examples today are the current targets of Carl Ichan.

      • Doug Womack says:

        I agree with you 100% Anthony. You identified in a single sentence the fate of Lackluster CEOs. Furthermore Lackluster is the perfect term for them. I don’t know how you feel about CEOs that take a well reasoned chance on obtaining a breakthrough for their enterprise, but I have respect for those who work hard and put their skin in the game even if they fail. If a CEO succeeds with every business expansion strategy, they are NOT taking enough chances. What infuriates people is how much money these Lackluster CEOs are taking out of their companies by being failures and rewarded handsomely for being a failure. Every stock holder should unite and start a ban on companies that offer their CEOs golden parachutes. That would get the board of directors attention. Remarkable post Brian, an impressive amount of analysis boiled down into highly consumable facts and an inescapable conclusion. I wish you gentlemen hung out in Chicago, I would love to smoke a cigar and chat with you both about the future of business in America.

  9. George Fenwick says:

    A superior post sir! So much of the economy runs on confidence and too few people realize that fact. I do not blame my fellow executives for being disenchanted with government and the economy. I do hold them accountable to the workforce and general public as well as their stock holders. If they cannot after 5 years find the courage and the vision to stop “playing it safe” and go about the primary responsibility of all CEOs in large corporations to build strategic strength; they should step down. I can agree with a one or even two year cautionary position. A 5 year hiatis from growth is not acceptable. That is a point I wished to add to your excellent article.

  10. V. Bogrov says:

    My good friend Brian. Leader who is afraid is not leader. You speak truth once again.

  11. Albert J. Caulfield says:

    This is the kind of honest, direct, factual and highly useful writing that all blogs should have and seldom do. Definitely a 5 star effort Mr. Lucas and I am bound to say that I agree with your reasoning. I read a few of your other posts before coming back here to comment. One of the talents you have that I admire the most is your ability to pull from a host of facts the cogent and salient ones and present them in a logical and palatable fashion. I would recommend your blog as a must read for every CEO.

  12. Ray Edgemont says:

    Frankly Brian, I was a little disappointed that you haven’t answered my comment on Sailing in an Agile Ship… But if it was because you were working on this I understand…. Bravo!!! 99% of the blogs are pure trash, loaded with opinion or stating the obvious and look like they were written on the back of a napkin over lunch. You are different! You show us your respect by serving up quality writing that is very well thought out on important subjects and back it all up with facts and a dash of humor. If you are working full time and turning out articles as valuable as this; I can have nothing but the utmost respect for you! If you do get a chance to answer my previous question I would appreciate it though! 🙂

  13. Kent Baldwin says:

    Your analysis is flawless Brian and it should make us all mad. It is a time of enforced austerity for everyone but CEOs who are raking in record salaries. That’s bad enough! What makes is worst is they are hurting the economy as a whole. It seems that the board of directors needs shaking up as well. You seem to be painting the picture of a new economy springing up for entrepreneurs and self employed free lancers. My question is will this eventually eliminate the kind of CEO who is causing this problem?

  14. Glen Sampson says:

    Brian I said before that your blog has amazing value and I asked you to find time to post more articles! This was worth the wait. I is clear and direct and without the doublespeak we so often hear from economists. It also makes me feel more confident about the economy. If we in business are culpable, and I will admit to not being as aggressive as I might have been over the last several years, then we also hold the power in our hands to put the economy on a stronger track. I have been prepared to make more of an investment in my business for the last 6 months. Thanks for giving me this extra reason to do so.

  15. John Hodges says:

    Excellent qoute from John Chambers of Cisco to begin an excellent article. Here’s a tip to all you investors out there. Look for all the companies in the last 5 years that haven’t shown any REAL growth and blacklist them regardless of their stock price or short them if you want they are bound to falter. Then look for those who have invested in capitalization and mergers and acquisitions and put them on your watch list. What do you think Anthony?

    • Anthony says:

      John,
      I think if that system works for you (I am not supporting it or condemning it) then go for it .What I don’t think is a good idea , the advice of shorting a stock.Shorting is highly speculative and losses have no cap. An accredited investor or sophisticated Trader are the people to execute short selling practices..There is a fine line between an investment and a trade when shorting. The other thought is to look for those companies with stagnated growth and Buy there stock hoping for a change in management .which will stimulate growth and in turn add value to there stock price..

      • John Hodges says:

        I do agree with your caution Anthony. Shorting stocks can be dangerous and I would defer to your expertise anyway, since I am not a financial adviser. I guess my point was that if you are going to be playing the positive side of the market it is by watching progressive CEOs who make “intelligent” or “agile” decisions, as Brian would put it, in times when the market is stressed and growth by acquisition or new areas of external vulnerability whether current competitors or new product and service markets arise. I probably overstated the downside due to a personal prejudice that executives who go for short term stock gain over long term enterprise viability deserve some measure of chastisement. Unless I am wrong shorting the stock can put pressure on a CEO depending upon the amounts involved and spur a lack of confidence vote by the board.

  16. M. Hastings says:

    Was just sent this article by a friend. Great read! I would recommend it to everyone in business and finance. -Marv

  17. Brad Orley says:

    This is very well written and thought out. I concur Mr. Lucas. My question is do you think this is turning around now and what do you predict for the summer of 2014.

  18. Claudio de Vega says:

    As a business owner, I am the chief steward and visionary. My first responsibility is stewardship – to see the company survives. My second responsibility is visionary – to grow the business to help my people succeed, provide opportunity for others and offer more to a larger customer body. To ignore the second, sit back and wait to see what is going to happen for 5 years is not fulfilling your duties as a visionary.

  19. Robert DeLeon says:

    Not sure I agree that it is a lack of agility Brian, though I found this post very interesting. I would call it a lack of courage and commitment!

  20. Palus says:

    Excellent post Brian! It couldn’t be written any better! Your blog is very impressive filled with high quality content instead of the junk opinion pieces that most people post and others foolishly follow because of the name! Keep up the great work!

  21. Colette Goddard says:

    Brian, can I ask you how long or how many projects it took you to become comfortable with agile?

  22. Glen Larson says:

    It is about time this was said! And it was very well said! Please post more on this business aspect of agile Mr. Lucas!

  23. Raymond Gottlieb says:

    A basic point here that sheep run to group think and these CEOs are sheep!

  24. Jim Baily says:

    The points made here are very well taken. Aspects of the economy are a self fulfilling prophecy.

  25. Angie Waterstone says:

    I certainly agree with Brian’s conclusions here. Now I will go one further, the personal prejudices of some executives has done more to slow the economy down than any activity of this president!

  26. Tim Connor says:

    I have to confess I am very much a conservative. The first time I read your article, I dismissed it. After mentioning it to my brother, he read it and thought it made sense. He left the corporate world and joined me in my cleaning business. My brother pointed out, we took chances and expanded our reach in the downturn. While it was a struggle and we went into the red for awhile, we expanded our customer base. Now we are doing well and have bought several smaller competitors. I read your article again with a fresh set of eyes. I have to confess, I now get it! You are right! I hope others will read it as well and take action to stimulate the economy the way it is meant to be done. Not through government investment, but business expansion!

  27. M. Turner says:

    Compelling facts!

  28. Brendan Turner says:

    From my perspective as a small business man, it appears the economy has recovered and is still improving. There is no question that the economic base has changed and it required more thought to be successful, yet the opportunity is there. Its all about being smarter and more nimble, not just than the competition, but the marketplace as well. You need to anticipate the market today as never before.

  29. Janey says:

    Some will never learn. This post is right on the money!

  30. E. A. Rutherford says:

    This is true to a certain extent, perhaps a large extent. To blame the CEO population for all the inactivity in the recovery is unmerited. As the CEO of a half dozen companies, both publicly traded and privately held, believe me when I tell you this is not an easy position to be in. Even when I owned my own company, the aversion to risk was a driving factor of each business decision. Every CEO is haunted by the widely publicized stories of catastrophic failures from taking risks. I am sure at the time, each CEO was convinced they were doing the right thing. Hindsight is always 20/20. On the other hand, it is the responsibility of the CEO to take the prudent and expedient risks necessary to expand the business. Too many today, as this article points out, have sat on capitalization. Overall, despite the title, this was a well balanced article. While I might not fully agree with the author, I would have appreciated having Mr. Lucas on one of my staffs. Having an intelligent person, who is unbiased and can look at either a problem or an opportunity objectively is invaluable to a CEO.

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