Carly Fiorina and the Limits of Executive Ability

There has been much comment on Carly Fiorina’s tenure as CEO of Hewlett-Packard – some calling it a complete disaster, others calling it a success. For political purposes, what is most important to remember is that Fiorina was running neck and neck with Senator Barbara Boxer in 2010 until Boxer came out with an ad attacking Fiorina’s actions at Hewlett-Packard. To be sure, the Boxer ad was lurid but the bottom line is that it worked: there’s nothing a Democrat likes better than to run against the CEO of a large corporation. It just works perfectly: the former CEO is, of course, very rich and, also, probably made at least some decisions which can be second-guessed (or monstrously twisted) in hindsight. There really is no defense a GOPer can have in such a situation (Democrat CEO’s who run for office are not so handicapped – because the MSM simply won’t give the Evil CEO meme any play and, of course, the GOP is ill-positioned to attack CEO’s in the public mind).

There is an element, though, in Fiorina’s tenure which I think important for all of us to notice – from Bloomberg Politics:

Carly Fiorina said Sunday that neither she nor Hewlett-Packard should be faulted for the sales of millions of HP printers in Iran when such business was prohibited by U.S. law.

Appearing on Fox’s Fox News Sunday, Fiorina said that despite being the CEO of HP when the Iranian sales took place via a third party, she was unaware of them.

“First, HP, you need to remember, was larger than each of the 50 states,” Fiorina said. “It’s a larger budget than any one of our 50 states, and a global enterprise. And so it’s impossible to ensure that nothing wrong ever happens. The question is what do you do when you find out.”

“Are you saying you didn’t know about it?” host Chris Wallace asked.

“In fact, the SEC investigation proved that neither I nor anyone else in management knew about it…” she insisted…

There are two things which will make me doubt a statement:

1. The prior knowledge that the person is a habitual liar.

2. That the statement is just absurd from the get-go.

I have not seen any evidence that Ms. Fiorina is a habitual liar so I will not accuse her in this instance of being such. For the second part, it is not an absurd statement. Ms. Fiorina prefaces her answer by noting HP is larger than the 50 State governments. This is no exaggeration – HP has more than 300,000 employees and more than $110 billion in revenues. That revenue amount is about the same as the State of California; all other States go from “a lot less than HP” to “this would be HP’s chump change”. It should be noted that HP has a reputation for being one of the most honest companies out there – and for our Progressives, it is all squeaky clean on Progressive politics: even Greenpeace gives HP high marks. On the other hand, in 2014 HP had to fork over a $108 million fine because they were bribing officials in Russia, Poland and Mexico to secure contracts. To be sure, the bribe case was long after Fiorina left but I bring it up because it shows this point: it is highly unlikely that the CEO of HP has more than the haziest notion of what is going on, day by day, in HP operations.

The bottom line is that once an organization gets above a certain size, no one can really know what is going on. The boss only knows what his or her immediate subordinates choose to reveal. Of course, a diligent boss can harass the staff into providing more information, or taking more immediate action – but even then, only about things which occur to the boss. If the boss doesn’t take a mind to a particular issue and no one volunteers any information about it, it simply will not be known. The best executive in the world with the most noble motives simply will not be able to oversee the entirety of an organization once it is too large. And too large probably shows up above 10,000 people for most executives, and about 100,000 for the best. To put it in perspective – Douglas MacArthur had three armies under his command at the peak (6th, 8th and an Australian army); Dwight Eisenhower had 9 (1st, 3rd, 7th, 9th, 15th, a British, a Canadian, a French and an Airborne army). MacArthur nimbly moved his armies over thousands of square miles of ocean and land and no forces under his command ever lacked for any necessary item…Ike’s armies ran out of gas – as in gasoline – just when they could have finished the Germans off. MacArthur’s forces were small enough for him to keep control – Ike’s forces were so sprawling that no one was keeping tabs on making sure the supplies got there, regardless of any difficulties.

Human beings are not built for managing massive enterprises. We just can’t do it. We’re not smart enough or energetic enough. The fundamental problem with Big Government, Big Corporation or Big Anything is that no one can mind the store. No one can grasp the whole thing and make it go the desired course. You can by diligent efforts hammer it into getting a few desired things done, but you can’t watch and regulate the whole mass. If someone – or 10,000 someones – are goofing off out of 200,000 people, how can the boss possibly know? Only if something really bad happens. And the bad things will happen because people are people – in any aggregate of humanity there will be a subset which is stupid and/or corrupt.

With a private corporation it isn’t to terribly bad because the bad shows up faster and demands action sooner – or even the big bosses will be out of a job. With government, it is just terrible. You see, a bureaucrat at the VA gets paid the same whether he processes one claim or twenty claims in a day. There is no incentive – other than personal honor – for him to work diligently to process the twenty. And, so, very often only one gets done – and to make it even more hideous, that bureaucrat processing one a day, if he gets caught, is protected by civil service laws and contracts from being fired. This actually works out as an incentive to goof off.

Any candidate saying they are going to make government work is kidding us – and themselves – unless the primary action of reform is to make government smaller. At least in the sense of breaking it up into smaller entities which are easily accountable to the people’s elected representatives for performance. But best in the sense of just having a lot fewer bureaucrats. More of them merely means more of them to make mistakes – and less chance that anyone will catch the mistakes.

We laugh when we hear Obama’s claims of “I read it in the papers” when yet another disaster besets his Administration. And, true enough, some of Obama’s claims are laughable – but not all of them. For the simple reason that he probably really didn’t know until the story broke. Until the disaster happened, that is. But we don’t elect Presidents to not know what is happening – but we can only have a President in the know if the organization is small enough for him to keep an eye on. We’ll never have effective government until it is smaller – no matter who we place in the White House.