Lebron James vs Leo Apthotheker

Well, LeBron would easily win a game of 1 on 1 basketball, and I’m pretty sure Leo’s tech company would crush LeBron’s.

But what’s interesting to me is how much more data is available about LeBron’s basketball skills than Leo’s executive capabilities.

When LeBron made “The Decision”, we cared because he was among the best basketball players of his generation. Would he be as great as Michael Jordan, Magic Johnson, and Larry Bird in the previous generation, or Bill Russell and Wilt Chamberlain before them? That was still to be determined, but he was clearly among the set of current players with that potential – as are, in my opinion, Kobe Bryant and Kevin Durant.

When HP, historically one one of the great technology companies and one of the original Silicon Valley successes, selected another CEO after the departure of Mark Hurd, it was a pivotal time in their history. It was among the most visible CEO searches in memory, and an opportunity for them to choose someone who would go on to take a place along with Bill Gates, Larry Ellison, Steve Jobs, and Jack Welch as one of the the great corporate leaders of our time.

While it may be hard to rate greatness in sports – Michael Jordan vs Magic Johnson, Kareem vs Wilt, we have a lot to go on in assessing players: standard statistics including points per game, rebounds per game, and assists per game; team results, like NBA championships, and the players’ visible contributions to the more sophisticated statistics, like Player Efficiency Ratings and Win Share; actual head-to-head matchups – watching Larry Bird play against Magic Johnson in the Finals

For executives, we have much less. We have: the companies they worked for; in the case of public companies, the results of those companies.

Unfortunately, we have very little data on the executive’s contribution to those results. In the case of the CEO, we can credit or blame the CEO with those results overall, but even in that case its hard to say how that individual would perform elsewhere. Eric Schmidt ran Google at a time of incredible success, but how would he have done running HP? Probably reasonably well, but I don’t really know. Do you?

When I look at some of the most successful executives in recent memory, they ran very successful companies over long periods of time – in some cases, over all or nearly all of that company’s life. Since Bill Gates started Microsoft and ran it continually through great success, its hard not to give him credit for the company’s results. In the case of Leo Apotheker, he was CEO of SAP for less than two years. According to his HP bio, he “was integral in helping build [SAP] into one of the world’s leading providers of enterprise software” and “gained a reputation as an outstanding manager of customer relationships, an acute business strategist and a technological thought leader.”

LeBron James was clearly integral to the success of the Cleveland Cavaliers. You see that in the impact of his departure: enough to go from the best regular season record in the NBA to nearly  the worst. Was Leo Apotheker integral to the success of SAP? Very hard to say, but the consensus is no (his contract was not renewed by SAP; the generally accepted reason is that SAP was underperforming financially under his leadership). Of course much of business is conducted in private so we will never have the transparency we have in sports, but the difference is striking.

People complain about the pay of professional athletes; at least we have a much clearer picture of their results than we do of corporate executives.

— Max

1 comment so far

  1. dmerr on

    perhaps a better analogy is between basketball *coach* and CEO. and that (coach) is trickier to measure.

    individual contributers are easier to measure – free throw percentage, lines of code per day, …

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: