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Enablers

Scott Galloway@profgalloway

Published on July 15, 2022

A few months ago, I wrote about powerful people’s ability to override guardrails. Just as badmouthing your ex is poor form, turning on the institutions that are the bedrock of your success is bad for the commonwealth and plain tacky. Coco Chanel said the opposite of luxury is not poverty, but vulgarity. The culture among our “innovators” is the opposite of luxury.

The “idolatry of innovators,” leads to the misguided notion that people (usually men) of great achievement (usually in tech) should not be criticized, are not bound by a code of ethics, and are above the law. This is bad for society and, eventually, for the innovators themselves. Constraints are essential to enduring innovation. Corruption and economic growth are inversely correlated. Resistance builds strength, and a level playing field rewards talent vs. cronyism. Humans operate poorly in the absence of limits/structure, and given free rein we lean into narcissism and dissipation.

Worse than the absence of guardrails: the presence of enablers.

Say Anything

Dr. Merete Wedell-Wedellsborg, a psychologist who studies powerful executives, military operatives, and law enforcement personnel, has found the action (or more often inaction) of those surrounding powerful leaders is critical to their unethical behavior. Enablers develop a “cultural numbness” to the behavior of their leaders (whose past successes justify liberties) that eventually gets baked into the culture of an organization.

Ken Auletta’s biography of Harvey Weinstein, subtitled The Culture of Silence, explores how abusers foster “a culture that normalizes the abnormal.” Powerful people have typically demonstrated outsize talent or made a large contribution to society, so there’s always cloud cover or even some justification for their missteps. We’ve developed an entire mythology around artists and innovators whose excesses are positioned as features not bugs. Picasso was terrible to his romantic partners (two committed suicide), but Wikipedia launders his misogyny: “The women in Picasso’s life played an important role in the emotional and erotic aspects of his creative expression, and the tumultuous nature of these relationships has been considered vital to his artistic process.” No, he was an asshole.

Since Steve Jobs, the gestalt in tech is that a talented, nice CEO … is talented.  A talented CEO who is unreasonable is a genius. The powerful skirt guardrails, and remove them altogether with enablers. For enablers, criticism of the leader, no matter how justified, feels like criticism of the followers who’ve accepted his behavior. Shamelessness becomes the leader’s superpower. The willingness to flout critics draws followers who lack the same power and conflate malformed behavior with leadership and validation of their success.

New Phone, Who Dis?

Enablement is shitty work as the loyalty runs one way. When consequences come for the powerful — and they usually do — enablers are cannon fodder. The January 6 hearings have featured a parade of Trump’s abandoned enablers. This week we heard from two men who stormed the Capitol, caught up in the proximity and promise of the most powerful man in the world. After months of consuming Trump’s “Stop the Steal” dross on social media, Stephen Ayers spent 10 minutes inside the Capitol on January 6, recording the event on his phone. For that, he’s lost his job and house, and gained a criminal record. (He pled guilty to disorderly conduct.)

While nearly a thousand foot soldiers languish in the criminal justice system, earned ruination has yet to come for Trump’s most powerful enablers. In Thank You for Your Servitude, Mark Leibovich paints a dispiriting picture of the abasement of Republican leadership at the feet of the former president (“Trump leg-humpers”). With few exceptions, the GOP power structure has made a trade: Proximity to Trump’s power is more valuable than fealty to their oath of office, or self-respect. So far, they’ve been right.

Valley of the Damned

Roger McNamee, an early investor in Facebook, has spent the past decade calling attention to the dangers spawned by tech. After Elon announced his intention to renege on his contractual obligation to buy Twitter for $44 billion, Roger said on CNBC:

I view Elon Musk as being the figurehead for a business culture that has just gone completely off the rails. We’ve gotten into this mode in Silicon Valley that we use technology to exploit human weakness rather than empower people, and we’ve supported a management culture that is so self-centered it has no respect for the people who are touched by the product, has no respect for the rules. And in the long run, that’s bad for investors, bad for the economy, and bad for the country.

Examples that support Roger’s point are ubiquitous. Travis Kalanick built Uber by violating transport and labor law — until finally the bro-yest bro in bro-ville became too much for even his feeble board of directors. Zuck, more disciplined than Kalanick, has maintained an iron grip on his dangerous and destructive business, monetizing teen depression and cultural rage. Crypto, at this moment, feels more like a pyramid scheme built on other pyramid schemes, vs. an innovation that creates enduring value.

And then there’s Elon. Musk’s diversions are not on the order of Weinstein’s or Trump’s, but as his Twitter misadventure illustrates, he too has leveraged success to replace guardrails with enablers.

The boards at Elon’s companies are a disgrace to the term. A board is charged with managing the CEO – hold them accountable for meeting business targets, coach them through difficulties, and act as fiduciaries for stakeholders. Committing securities fraud, as Elon did when he lied about the funding to take Tesla private, is a breach of the CEO’s fiduciary duty. Firing Elon wouldn’t have been in the best interest of the Tesla shareholders … but neither was doing nothing.

Demagoguery relies on a manufactured sense of aggrievement. Many of Elon’s semi-anonymous keyboard flock may or may not own a Tesla or Tesla stock, yet they are rallying to the defense of their hero — the wealthiest man in the world. Elon and his enablers need the criticisms of infidels to justify their culture of attack. His actual positions are fatuous. His professed love of free speech has nothing to do with actual civil rights, real civic engagement, or his own conduct. His reasons for abandoning the Twitter deal have been described by financial observers as “risible” and “absurd …  stupid.” Elon was no more going to “fix” Twitter than Trump was going to force Mexico to pay for the wall.

There’s a lesson for critics and those of us on the left who are outraged at the lack of outrage. Engaging with Elon, or any person who commands a keyboard army, only feeds those who find rallying to his support so satisfying. I’m guilty of this. Feeding the beast is also what happens every time we hear the national anthem of Wokistan. Policing every misstep from the approved orthodoxy can ruin careers — just ask college instructors how comfortable they feel having a real discussion about a social justice issue (i.e., exploring/acknowledging both sides). It’s the same sort of tribal intolerance and serves the interests of the powerful, not the powerless, as it rallies their enablers and deepens that bond. Intolerance should be the target of progress, not its tool.

The woke mob’s Guardians of Gotcha crusade is so inconsistent and hypocritical, it gives rise to personalities whose invidious behavior is conflated with leadership … standing up to the mob. A senator and comedian are expelled and sanctioned, respectively, for playing grabass and not picking up on nonverbal cues during a tryst. But 3 births, 2 women, 1 subordinate, 1 hush money payment, and 6,000 employees toyed with like Kong balls, in the same quarter, that’s “Elon being Elon.”

Net Gainers

Technology and the economic prosperity it’s created are gifts to the world. We are net gainers from the Valley and Big Tech. The problem is with the word “net.” Roger McNamee put his finger on it. Demagoguery and the predations of the powerful have been a problem for society since societies first existed. But they’ve reached a fever pitch in tech.

The confluence of social and mobile that brings us all into a 24/7 shouting match has made the tower of idolatry higher and the blast area wider.

Guard & Rail

Re Twitter, however, Elon has hit a guardrail that won’t give way. I believe the Delaware Court of Chancery is the barrier Elon and his enablers can’t intimidate. He’s trying to exit a hermetically sealed contractual obligation to pay Twitter’s shareholders $54.20 a share. His arguments are laughable. 

Twitter has sued him in Delaware, which, for bizarre historical reasons, often has jurisdiction over these corporate disputes. The Twitter complaint is compelling and reeks of truth. Also, the chancellors (i.e., judges) don’t give a shit what Elon, his followers, or Valley sycophants laundering his BS think of them.

Within a few months — the Court of Chancery is built for speed; no jury, no opening arguments — expect Elon to be on the hook for $44 billion. Either he’s the new owner of Twitter, after paying twice its market value, or he’ll settle with Twitter’s board for billions (plural). That’s clearly what the market believes: Twitter’s stock is trading around $36, above when Elon began acquiring shares, while the stocks of its peer group are off 15% to 60% since then. Similar to Yahoo and MicroStrategy, which became tracking stocks for Alibaba and Bitcoin, Twitter is now a tracking stock for a contract law case.

The likely natural level, sans Musk, of Twitter’s stock is around $20 per share. The difference is the market’s realization that shares in Twitter represent not only ownership in the IP and cash flows of the platform — but also a binding contract that will compel the richest man in the world to pay them $54.20/share.

Twitter shares will increasingly become a proxy for the veracity of the company’s case against Musk. And the case against Musk is strengthening. Since Tuesday, when the complaint was filed, the market is flat/down. Twitter’s stock, however, is up 12%. Why? The (strikingly similar) conclusions of legal scholars is that the court is not interested in bearing Elon’s children or prostrating themselves, but upholding the agreement he signed. We are a nation of immigrants, innovation, and liberty. Also, we are a nation of laws.

Life is so rich,

P.S. Eric Ng helped rebrand Airbnb — and he’s our newest professor. Sign up for How to Write a Great Creative Brief, happening next Friday.

Comments

49 Comments

  1. Scotty McC says:

    All fascinating & appreciate the insight as always.

    Little nugget in there which has struck me as bizarre since I first learned about it is “Microstrategy as a proxy for Bitcoin”. Given what Microstrategy core business was/is, the shift to being a BTC owner & the bizarre “flywheel” they came up with to justify it doesn’t quite pass the corporate governance sniff test. Would love a deeper dive from you on this one…

  2. Dan says:

    Any professor that uses a privilege chart without it being sarcastic should resign. terrible article, haven’t learned anything new except the writers bias. No mercy, No Truth, go look somewhere else for content.

  3. Stu Soffer says:

    “Twitter is now a tracking stock for a contract law case.“
    Well said.

  4. Leo chavez says:

    When the president of Mexico was Peña Nieto , he didn’t let Trump pay Mexico for the wall….. now the president is López Obrador, and guess what ?? Mexico is gonna pay for the wall …. Not a physical wall like most imagine but all the investment at the control borders will be paid by the Mexican government

  5. Haig Conolly says:

    I’ll dwell on one sentence:

    “… we use technology to exploit human weakness rather than empower people, and we’ve supported a management culture that is so self-centered it has no respect for the people who are touched by the product …”.

    The growth to staggering size and wealth of many companies gives them such power that they no longer need any real connection with “the people who are touched by the product”.

    The growth of oligopolies has meant that consumers often have little real choice about who provides a service, and that “service” falls away rapidly as a result.

    If you have an issue with a bank, or an airline, tech company, telecommunications company and so many others, most won’t provide a phone number or email address to contact them. Customer (read: human) interaction is all streamlined through digital processing. There are very conscious and well engineered structures in place to stop you using up the valuable time of the very few employees that are dedicated to actually dealing with customers.

    Assuming you have the near unlimited time to work out how to communicate with these corporations, you’ll find the almost universal response: “We are experiencing an high level of demand right now – it may take some time to respond to your enquiry”. This isn’t “Ah yes the pandemic has made resourcing difficult”, this is the corporations simply not caring less about customer service. They genuinely don’t care.

    Why?

    Because you, dear consumer, are stuck. The only other options you have will have customer service that is at the very best the same.

    And because the system itself is “supported [by] a management culture that is so self-centered it has no respect for the people”. And, it appears, doesn’t need to.

  6. Frans says:

    Tesla board did well to keep their CEO in power because they correctly forecasted The SEC’s lack of power or will to effectively enforce law. Hopefully the courts of Delaware enforce law.

    • Dan says:

      I hope they do find the information they where looking for when Twitter has to give the court ‘discovery’. Who ever is in the wrong should lose, but twitter is a pretty awful company.

  7. James says:

    Bravo

  8. Penelope says:

    Thank you for such a comprehensive take on what’s going on right now in society. It has clarifies the ins and outs of human nature whether political, tech business or personal.

  9. Kieran says:

    You are on the money. Indulging in “tribal intolerance [which] serves the interests of the powerful”, reinforced by echo-chamber wedge politics and algorhythms built to exploit the weakness in human nature. The only fix is for people to challenge themselves ‘can I actually understand the other guys position – before I judge’.

  10. Mark White says:

    “Engaging with Elon, or any person who commands a keyboard army, only feeds those who find rallying to his support so satisfying.” This, I have argued for quite some time, was a contributing factor to Trump’s election win, Barack dropping the mic, Bill Maher putting him down to laughter (from his own ‘psycho-phants’ lol), etc., anything that was or resemble condescension, were confirmation for the foot soldiers that Trump should be in power. In my own country, I recognise it as a balm for despair, the hopelessnes of the disadvantaged, the vicarious success through people who ‘look like me’. In both of Shakespeare’s usages, “that’s the rub”.

  11. C Cook says:

    I thought some people would be smarter than that to fall into the 19 year old rich spoiled Freshman false narrative trap of ‘white privilege’.
    But, it holds eyeballs.
    Somehow a black billionaire NBA star or TV host is ‘underserved’ or ‘under-represented’. Hard working Hispanics in Texas or Asians in San Francisco are not ‘minorities’ because they do not bow to those white liberals trying to ‘save’ them.. A successful plumber is expected to pay, via taxes, for debt generated in one’s ‘Feminist Literature’ degree.
    Such is the rotting world of woke/left.
    Go ahead, investigate 1/6. Next up, Portland and Seattle riots. Then the massive crime sprees in SF, NYC, and other cities. Then the rot in academia. NYU is a good place to start.

    • Boggle says:

      Looks like you’re hugely upset over being white and yet neither being rich, nor enjoying as much privilege as you thought you should.

      Squawking tropes you neither understand nor care to, makes you just another garden variety Tuckerite.

      Getting all his opinion from sound bites, and fearful that he may run out of bile.

      • LR says:

        “This here, students, is an example of the ‘ad hominem’ fallacy. Is it self evident, or do you have any questions?”

  12. Glen McGhee says:

    “Mysoginy” is correctly spelled “misogyny” from ‘gynē’ as in gynecologist.

  13. Paul B says:

    Bravo! I wish your clarity were as infectious as BA5.

  14. M. T. Glass says:

    Among the enablers are the lawyers and CPAs who keep saying yes while protecting themselves with exculpatory engagement letters. Vigilant guardians of what or whom?

  15. Mark says:

    As others have commented, Musk is Trump on weed. Nail his ass to the wall. $54.20 and not a penny less.

  16. Jates says:

    I’ve been an email subscriber since the Winner & Loser YouTube Ad days, the rich white male pyramid was enough to make me pull the rip cord.

    I’ll miss you, Scott. The self-flagellation performative wokism you chose to include in a business/ tech newsletter reminds me of the way you used say a CEO being on the cover of a magazine is a red flag for mismatched priorities.

    Love you, buddy.

    • Mark says:

      Don’t let the door hit you in the ass.

    • Swimming naked says:

      If he spent as much time and energy on running his company instead of signaling, he might achieve a fraction of what musk has. Look forward to the blog when Section4 goes under.

    • RA says:

      The article clearly called out stupidity on both sides of the political aisle. The fact that you only seemed to notice one side says more about you than it does about Scott.

    • Seamus says:

      Hi, rich-ish white male in tech here. Scott is spot-on here. It’s sad that so many of us are so fragile that we can’t critically look at the world that’s been built for us by historical biases and concentrations of wealth.

  17. Andrew says:

    Bravo, Scott!

  18. Mike says:

    Scott – Isn’t the $1 billion break-up fee what Elon owes for walking from the acquisition? The $1 billion was/is like the non-refundable deposit once he signed the contract. Why would he be responsible for anything more than $1 billion?

    • reader says:

      The $1B is if something external causes the deal to fall through (antitrust review is often the issue, though not here). “I changed my mind” is not a valid basis to break the contract. Or any contract. That’s not how contracts work.

      • Mike says:

        Actually, every commercial real estate contractor works that way. At some point the buyer puts down a non—refundable deposit. If the buyer doesn’t close escrow for any reason the liquidated damages owed to the seller is only the non-refundable deposit

        • reader says:

          Because that’s what the contract spells out – i.e. the contract is enforced based on its terms. Those are not the terms here.

      • Mike says:

        Actually, every commercial real estate contractor works that way. At some point the buyer puts down a non—refundable deposit. If the buyer doesn’t close escrow for any reason the liquidated damages owed to the seller is only the non-refundable deposit

    • Boggle says:

      Because of the contract he signed, and the serial breaches.

  19. Glen says:

    Last two posts were blisteringly good.

  20. Currently tracking says:

    Yep this article is … Correct. Interesting point about Twitters stock value remaining inflated due to expectations of the verdict.

  21. Andrew says:

    Scott nails it, as usual. Looking forward to seeing Elon get what’s coming to him in the Delaware court.

  22. Enabling failure says:

    To save time, here is a summary of every Prof G blog: “I’m brilliant and successful with a mild dose of faux self deprecation. Orange Man, Spaceship Man, and older white men like me are bad. Wokeness is also bad but I will always simp for Democrats cuz racism. I am jealous of CEOs who have accomplished more than me, so I will rant about why they and their companies suck. Here are a few cool looking charts that rarely show original new insights. Life is So Rich, Scott.”

    Section 4 will implode just like CNN+

    • Yariv Drori says:

      Get over yourself, man, this isn’t about you, and you are not bad for being a white male… Surely you can agree that powerful people should be held accountable to the laws that protect us all, despite the efforts of enablers to protect people who try to act above the law. You and me, we are the people.

    • Lupo says:

      He’s not White; he’s Jewish.

  23. Joe says:

    I’m a right wing guy. Many points here we can agree. The enablers of the woke mob of the left and the ‘patriot’ clan on the right won’t allow agreement on any point lest I be labeled a RINO and Scott a ‘racist’.

  24. Seth says:

    Great read, thanks for all that you do!

  25. David Goffin says:

    I hope the “we are a nation of laws” catches up to the news some day soon. Fearing that we are often more a nation of tradition and realizing that these break more easily than we thought, especially in the age of “no shame”. I hope and pray for my children’s sake that the laws are indeed the foundation of the nation. Otherwise….

    • C Cook says:

      Nation of laws, except when woke/liberal DAs disagree.
      In SF the DA let 84% of FELONY Domestic Violence perps out within 48 hours.
      And, the left wonders why gun sales are up in CA. And why 42% of all handgun sales are to women, likely beaten ones, knowing the their ex, now free, is coming back to finish them off.

  26. Cory says:

    Fabulous piece on so many levels. Ya, Musk believes in free speech, yet he blocked you and you aren’t even a follower!!

  27. Ryan says:

    Missing from your “privilege pyramid”

    – being born in modern day
    – being american, or Western European
    – not being handicapped , physically or mentally
    – having access to strong institutions
    – access to Internet
    – being able to live in a major city

    And probably a hundred other variables. But instead you share the same hand to mouth ivory tower liberal bubble talking points. It can be a drinking game at this point how much you inject this stuff into your posts.

    • Cryan says:

      Ryan, it’s not a privilege being born modern day and as an American, etc, etc as you state. It’s simply luck for many of us to be healthy and born in the great USA. I consider myself incredibly lucky to be born here. Give Scott a break. He makes a great point. Scott, keep doing what you’re doing. Most of us appreciate your posts.

      • Ryan says:

        How is that not a privilege but being white or male or “cis” or whatever is trending on Twitter for Scott to blindly follow (remember NFTs?) is? By definition it is something you are born into and cannot control.

        The difference is those who are mislead through the scourge of identity politics are so eager to call out others without having the life perspective to reflect on themselves. They are so eager to become a victim, or fall into the trap of unnecessary guilt and self loathing in our authors case, that they are blind to the things they should truly be grateful for. It removes agency and power from themselves, and leads to a defeatist mentality

        It works for getting attention on Twitter, but doesn’t work for a fulfilling life or reaching self actualization

        • Perry Boyle says:

          Fantastic piece. However, does Prof G miss the irony/hypocrisy in his ad at the bottom for the AirBNB guy? AirBNB has literally destroyed my town and made it unaffordable for working people. They did this by legislative sleight of hand. Not sure why Scott thinks it’s any different from any other similar firm.

        • Sam says:

          Very Well said

        • Kieran says:

          Ryan, privilege is indeed a lucky accident. But you seem to see it as an accusation? Being aware of how lucky you are to have some privileges is not a reason to be ashamed. You just need to understand that you are luckier , not better, than others – and try to balance the scales for the less lucky.

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