September 24, 2006
Interview on tompeters.com
Have your ever finished a good conversation, gone on to something else, and then immediately realized there was something important you forgot to say? That’s exactly how I felt a few days ago when I was interviewed for the “Cool Friends” portion of Tom Peter’s web site (thanks Tom!).
We got into quite a discussion of Harvard Business School’s Michael Jensen, and how he provided the intellectual underpinnings used to justify mega stock option grants and myopic focus on shareholder value. Both of these badly abused management practices are behind many companies getting bigger without the economic benefits they hoped would accompany size.
Jensen is a key character in the first part of Bigger Isn't Always Better where I lay out the downsides of bigness. But the real hero of that chapter is a lesser-known Vanderbilt economist, Margaret Blair. She had the courage, at a time when maximizing shareholder value seemed to be everybody’s mantra, to write about why a bigger stock price does not necessarily make for a better company. Next interview, she gets top billing.
Link
We got into quite a discussion of Harvard Business School’s Michael Jensen, and how he provided the intellectual underpinnings used to justify mega stock option grants and myopic focus on shareholder value. Both of these badly abused management practices are behind many companies getting bigger without the economic benefits they hoped would accompany size.
Jensen is a key character in the first part of Bigger Isn't Always Better where I lay out the downsides of bigness. But the real hero of that chapter is a lesser-known Vanderbilt economist, Margaret Blair. She had the courage, at a time when maximizing shareholder value seemed to be everybody’s mantra, to write about why a bigger stock price does not necessarily make for a better company. Next interview, she gets top billing.
Link
