It is a crushing irony for The Business Press Maven that the business media finally took a long-term view on an issue -- at the precise moment when the shorter-term reality should have held sway.
In fact, this was such a broadside to The Business Press Maven's gut that he can hardly go on. But, heroically, I will.
Here's the deal:
named John Chambers its new chairman. Name sound familiar? It should because Chambers has been the CEO of Cisco since forever -- more specifically, since 1995, when computers were powered by squirrels running on a belt. And as everyone like
The Wall Street Journal
dutifully told us, since Chambers took the helm of Cisco back in the day, the company's revenues have catapulted from a piddly $1.2 billion to about $25 billion. Not too shabby.
So why not tack on an extra title? Well, that's where things get a little complicated, which is usually right about the time when the average business journalist says their mother is calling them and runs screaming from the room. Current organizational-chart convention is to separate the chairman and CEO positions, and it makes some sense.
Although The Business Press Maven never gets more nervous than when a fad hits the boardroom, keeping the chairman of the board and the CEO separate can lead to more independent oversight, particularly when the chairman doesn't pick the CEO -- or vice versa.
And if the chairman and CEO are the same person? Well, I hope you trust their abilities. Which brings us back to Chambers. I know: I saw that long-term revenue growth. And I know how, when the history of the modern business era is written, Chambers will be one of the cult-of-personality business leaders, an executive of unquestioned brilliance. Taking him on is like kicking mom, baseball, apple pie or Steve Jobs in the shins.
But let's forget about the business media's recent mantra about Cisco for a moment -- that decade-long revenue growth rate. Instead, let's look at the five-year chart for Cisco's stock price. Notice something?
It's as flat as an al-Zarqawi's EKG.
Whole Lotta Nothing
Source: Big Charts
I mean, this thing is dead in the water. Or in the rubble of a palm grove.
Some media outlets, like
The Wall Street Journal
, touched upon the unusualness of the CEO/Chairman power axis in the hands of one person. They attributed it to Cisco's need to name a successor to the man they referred to as a "networking titan." (He is giving up his president's spot -- he may be a networking titans, but he is not a three-title titan.) The
said that Chamber's successor could be installed into the president's slot.
"The risk for Cisco is that if the company doesn't promote from within it may lose some of its key talent," the
said, in a line that gets a booby prize feared in newsrooms the worldwide -- a Business Press Maven "Back of the Hand" award.
and others were distracted by the share buyback, announced simultaneously. Or the unexpected recent death of
CEO Frank Lanza, which is making succession planning more of a fad than power balancing.
But the risk to Cisco is not in losing a Chambers' lackey who may or many not succeed Chambers when the 56 year-old is old and grey a generation from now. The risk to Cisco is in having too much power concentrated in a man who hasn't budged his stock price since the Seinfeld years.
Chambers has had his successes, not doubt. But if you take one thing The Business Press Maven says as the god's honest truth, let it be that if you are going to hand absolute power to an executive, be doubly sure his best days aren't in the history books.
Let's think long term here. But let's not let the long-term lead to
, because that, in turn, can lead to
, you get a load of how stocks fell this week? Actually, it wasn't that bad. With the stock market at 11,000, after all, a drop of 100 points in a day is only about 1%. So what gives with this week's headlines?
Here's a small sampling:
"Stock Prices Plunge Again," AP -- after a 166-point skim off the top.
"Stock Prices Drop Sharply For 2nd Day," AP, after a 110-point intraday drop that brought the Dow under 11,000.
Look: The Business Press Maven has to go through this every time the stock market hits a new benchmark, and absolute numbers that (once upon a time) seemed large, are now, on a percentage basis (which is the only basis that ever matters) a drop in the bucket.
Once upon a time? A view on Chambers so long-term that short-term shortcomings are forgotten? What in the wide, wide world of the business media is going on here? Guys, you are finally looking long-term. But,
, you're looking for history in all the wrong places.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial website twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children.