Celebrity and Strategy
By Mark Chussil
Here’s a true story. A friend of mine won the Professional Bowlers Association (PBA) championship some years ago. He laments that his skill is in bowling and not in golf. His prize was nice but the Professional Golf Association (PGA) championship paid seven times as much in that year. Would we say the PGA champ was seven times as skillful as my friend?
In 2013, the PGA champ was paid 28.9 times as much as the PBA champ, up from seven times. Would we say that skill at golfing is growing faster than skill at bowling?
How many top golfers can you name? How many top bowlers? (I can name one.)
We have, in business, a cult of celebrity rather than a cult of strategy. Try this: who’s the CEO of Facebook and who’s the CEO of DuPont?
Facebook was founded in 2004 by CEO Mark Zuckerberg. Facebook is #34 on the 2021 Fortune 500 list and wasn’t on the list at all just a few years ago. Its annual revenue was $86 billion, of which $29 billion was profit.
E. I. du Pont de Nemours and Company was founded in 1802, making it one of the oldest companies in the United States. DuPont has been in the Fortune 500 every year there’s been a Fortune 500. It was #144 in the 2021 list, with annual revenue of $20 billion and a loss of $3 billion.[1] I didn’t know Edward Breen is the CEO of DuPont until I read it here a moment ago.
According to the 2021 Fortune list, DuPont employs 34,000 people and Facebook employs 58,604. DuPont sells a wide range of products. Facebook sells advertising space on tiny little billboards.
If all traces of DuPont were suddenly to vanish, buildings wouldn’t breathe while remaining watertight (Tyvek®), firefighters and Air Force pilots wouldn’t be protected from fire (Nomex®), “ballistic and stab-resistant armor…[wouldn’t] allow heroes to be heroes” (Kevlar®), and fried eggs wouldn’t slide off ungreased pans (Teflon®).
If all traces of Facebook were suddenly to vanish, advertisers would have to find other means to intrude and people would have to find other ways to like one another.
I don’t mean to express approval or disapproval of either company. It’s not about them; this Teflon-slick essay would be equally likeable if I’d focused on Centene[2] and Twitter. As a jaded practitioner and curious student of competitive strategy, I just like to notice things and ask questions about them. For example, why is Facebook so much more celebrated than DuPont?
Here’s what I mean by so much more celebrated. I had Google search for “DuPont news” and “Facebook news” on August 29, 2021. The DuPont search turned up “about 69,800,000 results.” The Facebook search: “about 25,270,000,000 results.” People are creating, or at least Google is finding, 362 times more “results” for Facebook than for DuPont.
A search for “DuPont strategy” and “Facebook strategy” turned up 22,600,000 and 1,090,000,000 results, respectively, a difference approaching two orders of magnitude. “Breen strategy” had 4,410,000 results, whereas “Zuckerberg strategy” yielded 6,360,000, exceeding Breen by not quite 50%. (Don’t worry, Mr. Zuckerberg, multiple Breens had strategies.)
By any metric other than strategy, it seems Facebook’s celebrity advantage over DuPont is greater than the payoff in PGA golf versus PBA bowling.
It’s not a big shock. It’s much more exciting when a toddler takes its first steps than when a middle-aged person keeps strolling along. But who’s got more to say about the skill of competing? To whom should we be listening?
People pay far more attention to shiny than to dull. But why? By any metric DuPont is more consequential than Facebook, unless you consider a mere increase in human interaction (which was already plentiful in my opinion) to be as consequential as healthy homes, safer firefighters and pilots, unshot and unstabbed heroes, and foods cooked without grease. Moreover, it has demonstrated the skill it takes to thrive for centuries. That skill goes beyond any individual CEO (Mr. Breen is DuPont’s 19th over more than two centuries).
I don’t doubt that Mr. Zuckerberg is a smart guy driven to work hard. That said, and with no disrespect, he’s got a teenaged business, highly focused in one area, where he won a there-at-the-right-time lottery[3] as well as displaying competitive skill. There’s no question, too, that Mr. Breen is not responsible for the centuries of positive results in numerous product lines that preceded his arrival at DuPont. On the other hand, a highly successful company with a long track record chose Mr. Breen as its CEO.
I don’t know whether Mr. Breen is more-skilled or less-skilled than Mr. Zuckerberg. I haven’t met either of them and I haven’t studied their decision-making. The question I’m raising is whether that orders-of-magnitude difference in attention makes sense with what we do know. What we know is that Mr. Zuckerberg hit a hole in one on his first swing. What does that tell us? It tells us he hit a hole in one on his first swing.
So to whom should we turn for advice in competitive strategy, Mark Zuckerberg or Edward Breen? Here’s why the answer is not obvious.
Years ago, I tried bowling. I was failing miserably. I’m left-handed, and I wondered what would happen if I switched to my right hand. What did I have to lose?
The first ball I rolled with my right hand: a strike! My equivalent of a hole in one, and I didn’t have to go outside. What conclusion would you draw? Would you advise me to use my right hand again? Obvious, right? My right hand, of course. Surely Thomas Bayes would approve.
Using my right hand, I dropped the next ball on my foot.
What, exactly, is my level of right-handed skill? On average, five pins and a semi-painful foot? More important — much more important — should I bowl again with my right hand or revert to my left? (When I pose that question to my audiences, they prove to be much less risk averse than I am.)
When we search for advice on competitive strategy, we should seek not fame but skill. The trick is to tell the difference. It’s not easy, and it’s especially not easy when we have little evidence. (It’s not easy but it is possible, though that’s a subject bigger than I’ll address here. I’ll just say that it requires two things: simulation to see what’s possible, and deliberate focus on the quality of decisions.) Meanwhile, I recommend this: When you choose whom to emulate, consider whether to pick a celebrity or a strategist.
A question for you: Of companies founded in the last decade or two, which do you think might make it to a century or two? Please beam your responses to me no later than July 2121.
[1] After a series of acquisitions, DuPont split in 2019. DuPont was #35 in the 2019 Fortune 500, with annual revenue of $86 billion, profit of $4 billion, and 98,000 employees. The current, smaller DuPont might not include all the products I mention in this article. The specifics don’t matter for the points I’ll cover.
[2] Have you heard of Centene? I hadn’t until I researched this article. Centene manages Medicaid programs. It’s #24 on the 2021 Fortune 500, with revenue of $111.1 billion and profit of $1.8 billion, with 71,300 employees. Can you name Centene’s CEO?
[3] It’s worth noting that Facebook thrives in part due to a structural benefit known as a network effect. Here’s what that means for Facebook: Everyone uses Facebook because everyone uses Facebook. Googling “network effect”, by the way, gets 2,190,000,000 results.