We have suffered through Richard Scrushy (HealthSouth), Dov Charney (American Apparel), Elon Musk (Tesla), Travis Kalanick (Uber), Martin Shkreli (Turing Pharmaceuticals), Elizabeth Holmes (Theranos), Jeff Dachis (Razorfish), and the list is long and becoming boring. Now comes Adam Neumann (WeWork, now just We). These entrepreneurial CEOs with great ideas are dynamic, energetic, forward-thinking, and stubborn. They can take an idea and see it through to great financial success. Then something happens. Perhaps their downfall comes from too much recognition and too much money too early in life. Perhaps the downfall comes because they have no one to rein them in. Yet somehow they manage to get their companies into trouble, cause questions to be raised about their companies, and/or just keep pushing the envelope on personal behavior.
Mr. Neumann was profiled in the Wall Street Journal. One example was a private jet flight for Mr. Neumann and his friends to Israel. The gang smoked marijuana on the flight over the Atlantic, and the crew found a stash of the drug placed in a cereal box — planning ahead for the trip back. The owner of the private jet recalled the plane. That company wanted no part of the young CEO’s adventures. Mr. Neumann wants managers to fire 20% of their employees because he believes they have hired too many mediocre folks. The conflicts of interest revealed in preparation for an IPO were stunning — family, friends, and Mr. Neumann all benefited privately from We’s work. Mr. Neumann borrowing money from the company with his options as collateral — conduct that public companies can no longer do thanks to Bernie Ebbers and his WorldCom disaster.
Yet, in the article, there are still analysts proclaiming that this kind of conduct is what resulted in the company meeting its “outlandish” targets. Yes, indeed, they will meet the targets when you are firing at a rate of 20%. However, that does not mean that the numbers are real. That info will be percolating. The We board seeks to remove Mr. Neumann — good luck with that one. See the stories of the CEOs listed.
History repeats because another thing these young buckeroos have in common is that they never learn the lessons of those who have taken similar paths with their companies. Neither do the analysts. The boards have tried, but the obstacle is that the buckeroos have majority control.
About mmjdiary
Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD.
The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards.
Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio.
She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News.
In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles.
Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
