Saturday, September 17, 2005

Stupid vs. Evil: The Only Useful Corporate Metric

If you follow stocks and business news at all, you gradually develop a limited understanding of corporate metrics. EBITDA, ROI, etc...all just different ways to measure how a corporation has performed historically or is likely to perform in the future. Some are more esoteric than others, and there's debate amongst analyst-types about which ones really are useful and accurate.

In my opinion, there are only two important yardsticks for any corporation or corporate decision:
  1. How evil is it?
  2. How stupid is it?
The logic here is that corporations do evil things sometimes, and they do stupid things sometimes, and sometimes they do evil, stupid things. The goal would be to not do evil, and not to be stupid, and in particular not to be stupidly evil.

Allow me to provide some examples to help illustrate the point.

Enron: Evil, not stupid. Enron made money hand over demonic fist by completely discarding ethics and common decency. So, if you look at it in a Machiavellian sort of way, they were quite clever, but so evil that it boggles the mind.

Microsoft: Evil, not stupid. MS has had a growing stranglehold on the computer industry for 15 years, and have done plenty of evil things to get there. How do they sleep at night? "On a bed of money, surrounded by many beautiful women."

Ion Storm: Not evil, but stupid. They blew a staggering amount of money developing their games, and wrote hype checks that their product couldn't cash.

SCO: Evil AND stupid. They initiated a slimy and questionable legal action against the supporters of a free product that has contributed enormous value to the public domain. Their reputation was tarnished forever. They are now losing customers like mad, partly due to the rising tide of disgust over their actions, and partly due to customer concern over the continuing viability of the company, given their increasing legal fees and dwindling revenues.

The preferred method of applying the Stupid vs. Evil metric is to give the corporation or corporate decision a Stupid score from 1 to 100, an Evil score from 1 to 100, and then plot those scores on a graph with a vertical axis of Stupid and a horizontal axis of Evil.

The goal is to be as close to the lower-left-hand corner as possible. If you're in the upper right...

0 Comments:

Post a Comment

<< Home