The appointment of a new CEO is change we can believe in corporate-style. No matter how much of a mess a company is, the appointment is occasion for over-the-top coverage about how the company undoubtedly is going to turn the disaster around.
In the case of the beleaguered
, which just appointed a CEO and a chairman, we got a double dose of this executive worshipping and highly misleading coverage.
The formula for such articles is pretty standard, so forever be on the lookout. You'll be a better investor if you can avoid the mistakes of overconfidence that these articles breed in investors.
Here's a how-to guide for writing one of these articles:
Lead with a small, nearly meaningless anecdote and blow it up into something with far-reaching significance. Then wind your way around to a summary of the company's difficulties before pivoting with a mention that the new CEO thinks he can turn it around and "some analysts" agree.
Stand overly impressed with any boilerplate "five-point plan."
Throw around words such as "no-nonsense" "dexterity," "deft" and even "savant" when describing the leader. If there are two new leaders, mention the possible existence of a "dream team." Who actually called them a dream team? Well, no one -- just drop in a vague line about how "many say" that they come "as close as possible" to a dream team.
End with a cute, personal little quote.
An article late yesterday from
on Alcatel-Lucent's new leadership conformed to type even better than most. Don't be fooled by this article or by any other standard sycophantic article about newly appointed leaders at troubled companies. Little leads the savvy investor astray more than worshipful coverage of CEOs at reeling companies who have barely even reported to work yet.
article offers a bonus in a worshipful headline masquerading as one that merely asks a question. Here is the headline, which by itself is fine, posing a question that should be the starting point for complex, unbiased discussion that saves worshipping for the CEO's mother: "
So far, so good, right? Right, but look how we veer off in the subheadline, which effectively answers the question before the article even begins, cutting off legitimate debate. We have a "master" and a "savant" on board, plus a "five-point plan": "Master telecom manager Verwaayen, abetted by French business savant Camus, already has a five-point plan to turn the equipment maker around."
Holy overstatement, Batman! But, The Business Press Maven thought that maybe this "five-point plan," fit to be showcased in a subheadline, was pure managerial magic.
Next comes the overblown lead anecdote -- this one about an almost supernatural ability to procure ... business cards! Here it is -- and please, don't giggle. It's not polite:
"Ben Verwaayen's first morning in the job as the new chief executive of Alcatel-Lucent on Sept. 2 provides a hint of how rapidly things are set to change at the troubled Paris-based maker of telecommunications equipment. When Verwaayen asked for business cards, he was told they would take three days. Not good enough. He demanded -- and got -- them in three hours."
We are soon on to that parade of adjectives, and by the time we get around to details of the vaunted five-point plan, we see that, like a political speech, it's drawn as wide and bland as a horoscope:
"...delivering on benefits promised when the merger occurred; a greater embrace of so-called 'open innovation' (an emerging management concept that aims to do away with the 'not invented here' syndrome in corporate R&D); banishing the us-versus-them mentality inside Alcatel-Lucent by insisting that the company think and act as one; making executives accountable for results; and choosing the best people for positions, regardless of nationality."
Deliver on promises and choose the best people! Why didn't I think of that? It's so easy to turn a company around! Alcatel-Lucent was riven by cultural conflict between its American and French contingents, but banish that Civil War mentality by insisting people act as one! Problem solved!
Before we get to the cute little standard-issue sycophantic kicker, remember that it is important to understand articles such as this one so you don't rush into Alcatel-Lucent or any other stocks based on such drivel.
The last guy who flamed out at Alcatel-Lucent in a blaze of regret and recrimination got paid handsomely. "But in a move likely to please shareholders," wrote
, "Verwaayen has agreed to no severance pay. `If they want to get rid of me, they can do it in a heartbeat,' he said. `I am here to do a job, not to make a career.' And if things don't work out? `I've still got my swimming suit,' he said."
Ha ha. The Business Press Maven would like such articles to flame out!
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
to send him an email.