Coders beat CEOs

by Bruce Kasanoff on August 9, 2011

It’s time to acknowledge reality. CEOs are becoming irrelevant.

Power has shifted to the people who understand languages CEOs can’t speak: code.

IT innovators are starting to rule. We’re entering an era in which capabilities are more important than companies. Can you come up with a better way to process payments? In a few years, you can be processing millions of transactions. A better way to communicate? 10% of the world might race to your doorstep.

All the things that make big companies impressive – hundreds of thousands of people, global offices, sponsorship of professional sports – are unneeded baggage. Let someone else carry them.

Sure, when your company grows to employ 1,000 people you may hire a professional CEO. But he’ll be working for you, not the other way around.

Of course, most CEOs don’t yet understand what’s happening. People are still deferential to them. The money keeps pouring in, even if sales are slowing a bit. Their companies have existed for 10-100 years, and it seems obvious they’ll be growing for years to come.

Wrong.

Code is changing every industry. It’s just starting to take advantage of wireless, mobile, and trillions of sensors proliferating around the world. Almost nothing we do – nothing – makes sense given these new technologies: schools, healthcare, banking, and politics are all overdue for dramatic changes.

I’m not saying that tech people are ideally suited to run companies, or whatever replaces them. But I am saying that it is now more important to understand code (and what you can do with it) than it is to understand marketing, sales, human resources or how play nice with the Board.

That having been said, a few select CEOs have a distinct advantage. The ones who agree with this perspective, who know that code is the DNA of innovation, can adapt to this new world. They have the people skills and the credibility to win and keep powerful backers. They can attract capital and talent. People like this will always be formidable.

In this respect, I figure the old-fashioned 80/20 rule still applies. 20% of CEOs will profit from the sweeping changes ahead. If you are ambitious and really know code, the other 80% are the ones you’ll make irrelevant.

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