CEOs matter. Watching CEOs can be as dramatic as any reality show, just as impressive or just as unbelievable. Those people with that rare mix of leadership and management skills can drive a company with the finesse necessary to keep ahead of the competition (or at least the bills) without it getting too many scratches or dents. Seeing the CEO, and the rest of management, in action is one reason I attend stockholders’ meetings. Numbers and words aren’t a company. People are a company, and the people that run the company can define the company. So, it is news worth watching when a CEO leaves, or when a CEO courageously steps up with a bold plan, or when months go by without news. I’ve seen a lot of CEO news lately.
For those just tuning in, I live on an large island with a lot of small towns. Whidbey is one of the largest islands in the US, though most of the folks in its various small towns see us as separate from the mainland, also known as Merika. Small towns have difficult economies. Rural islands have difficult economies surrounded by moats. Businesses that survive such an environment are impressive, and are usually driven by someone with great determination – or luck. Never discount luck. Don’t discount determination, either.
Head out to a friend’s indiegogo campaign and see one business leader who is actually doing that, leading. She’s had a vision for her chocolate business, has managed it well enough to need room for growth, and has a vision for how it and the community can expand and hopefully prosper. It takes months of work to develop such a plan, courage to present it, and resolve to pursue it. Monday evening Mona gave a presentation to a packed room. Her enthusiasm drew a crowd, partly because of her business success and partly because of her outreach.
“Locally, there is the I Believe In F.U.N. campaign through U.S Bank. This is a way to raise funds locally to help businesses in our community become sustainable and unite our town to do collaborate marketing campaigns.”
Of course, maybe it was because she sells chocolate.
A proven business leader stepped up with an idea. People wanted to listen. (Now, let’s hope they’ll fund her plan.)
People also listen when a leader steps away.
The CEO of Real Goods Solar (RSOL) resigned yesterday. The company IPOd (again, but that’s another story) at $6 several years ago, dropped to $0.40 within the last year, spiked up to $7 as part of a rush as investors suddenly realized that solar stocks were dramatically undervalued, and which has now slumped back to about $3. I bought early and have experienced that slide and ride. I continue to think the stock is undervalued, partly because the stock continues to trade at less than annual sales. Solar power is gaining prominence. Sales should grow. The stock should rise. Yet, I winced when I saw the news because the leader and manager of the company was leaving. Even if that is a good thing for all concerned, it is common for a stock to drop with a change in such a key management position. My finances are tenuous enough. I don’t want any more bad news. Imagine my surprise to see that the stock is barely budging today. The CEO had never made an impression on me. Evidently he hadn’t made one on the market either.
I’ve sold stocks because CEOs left. It hasn’t always been the best move. I sold AAPL when Steve Jobs was kicked out in 1983. After all of the subsequent splits, I effectively sold at $2.50. AAPL currently trades at $436. There’s a time when I should’ve adhered to my strategy of Long Term Buy and Hold, LTBH. I’ve also held stocks through CEO changes. Within the biotech world, I watched ICOS, GERN, and DNDN change leadership, hoped for the best despite being unimpressed with the new officer, and was saddened to see passion for helping more than just the shareholders be replaced with a heavy emphasis on money. I’ve held some stocks because the CEO so impressively embodied leadership and management that it seemed like they could make any business thrive.
My favorite is John McAdam, the CEO of f5 (FFIV). I bought FFIV as the internet bubble rapidly deflated. His description of the situation, his management within the changing market, and his leadership of a new direction were excellent. He’s held the job far longer than the average CEO. My investment in FFIV is a great lesson in the value of such a person, confirmation that LTBH can succeed marvelously, and proof that following conventional wisdom isn’t always wise. I sold my FFIV to make a large downpayment on a small house that is my home of homes. Buy low, sell high, and take profits when you can – but. I bought as low as ~ $2.50 and sold in the vicinity of ~$44. Since then, FFIV topped out at $140, though now it is back to $75. If (a favorite word of investors), if I’d held FFIV, I’d probably be able to buy my house for cash – which I’d be able to do thanks to a well-managed company. Oh well.
Few people in any profession embody everything the job requires. We are humans. We are imperfect. Through skill or luck, sometimes the person matches the job. I continue to work and hope that I have enough of the right skills to run my company, Trimbath Creative Enterprises. Everyone has skills and talents that match some job. Even when I am less than impressed with a CEO, I can usually imagine them in a different role. Read my comments about MicroVision’s leadership and realize that, while I’d like to see more dynamism in the CEO, he’s so impressed me with his other skills that I think he’d be an excellent COO in any electronics firm. COO is not a bad gig. I know it pays better than my current position.
Within this small community, here on the island, other impressive stories are developing. I’ve been impressed with Chocolate Flower Farm’s ability to grow throughout the Great Recession that emptied many storefronts in this tourist town of Langley. Island Soap Company has grown from a small retail shop to a major store with significant wholesale sales. Now that tourists are returning it’s harder to visit my friends because their stores are more likely to be busy.
The people who run things matter. They deserve a lot of credit. (Not as much as most corporate executive compensation packages, but that too is another story.) We each run our own lives, which puts us in the interesting position of having to lead and manage our selves. We deserve a lot of credit; especially, when we step up and into a courageous plan to live our dreams. I bow to those who do so.