ECONOMY

One-man states and companies are ruining the world

“Buying Twitter is an accelerant to creating X, the everything app,” Elon Musk explained on October 4, on Twitter. Four weeks later, after the writer Stephen King objected to paying $20 a month to be verified by Twitter, Musk was in retreat. “How about $8?” he tweeted from his “war room” at company headquarters in San Francisco. Twitter has since paused paid verification.

At times, Musk increasingly resembles a blessedly bloodless version of Vladimir Putin. Buying Twitter for a ludicrous $44bn recalled Putin’s very hostile takeover bid for Ukraine, in which the autocrat was going to teach his prey a lesson. But while Musk has been destroying his own company, Putin’s army has fled newly annexed Kherson, a place that was supposed to be Russia “for ever”.

Today’s two dominant organisational forms are practically the same: the one-man autocratic state and the one-man autocratic company. Both have the same vulnerability: the idiosyncrasy of an overpraised loner.

One-man bands were long out of fashion. China and Russia spent decades under collective leadership after lone rulers Mao and Stalin killed millions. In business a decade ago, none of the world’s 10 most valuable companies were still run by their founders.

But by then Putin, Xi Jinping, Mark Zuckerberg’s Meta, Musk’s Tesla and Jeff Bezos’s Amazon were already ascending. Then Mohammed bin Salman became Saudi Arabia’s solo ruler and de facto controller of the world’s second-most valuable company, Saudi Aramco. His fellow heir, Donald Trump, tried running the US like a family real estate firm.

One-man states and one-man companies have similar cycles. At first, even if the autocrat’s aim is self-enrichment, he wants approval, so he avoids self-sabotage. Being unbound by rules, he seems more agile than his collectively ruled rivals. With success, he acquires an aura. He stabilised Russia/invented Facebook/built electric cars. Why, he’s a genius! If he wants to become president for life or assign himself stock with 10 times the voting rights of other shares, well, what could possibly go wrong?

But the initial success was generally due to a unique confluence of luck, person and moment. Few humans are two-trick ponies. Worse, hubris takes hold. Having defied gloomsters the first time around, the autocrat ignores them the second time. “Move fast and break things” was Zuckerberg’s early motto, but it eventually became Putin’s too. Also the autocrat gets bored. Once you’ve been running Russia or Facebook forever, each day starts to feel samey. That’s presumably why Bezos got out. He put Andy Jassy in charge of Amazon, fired himself into space and is now bidding for a football team.

Musk, Zuckerberg and Putin stayed in post but, like Bezos, they sought new stimuli. While shareholders or Russian secret policemen imagined that the autocrat was still ruthlessly devoted to making them money, he had in fact progressed to higher things. Zuckerberg, for instance, seems to have decided it would be really cool to build a virtual-reality “metaverse”, whatever the cost.

The pandemic probably accelerated these processes of personal development. While Putin spent lockdown studying Ukrainian history, Musk appears to have spent it on Twitter: his tweets-per-day average rocketed. Meanwhile isolation set in. The investor Chris Sacca tweeted last week: “One of the biggest risks of wealth/power is no longer having anyone around you who can push back . . . A shrinking worldview combined with intellectual isolation leads to out-of-touch shit . . . I’ve recently watched those around him become increasingly sycophantic and opportunistic . . . agreeing with him is easier, and there is more financial & social upside.” Sacca was talking about Musk but he might as well have meant Putin.

Aghast former backers cannot stop the autocrat. Zuckerberg is free to burn shareholders’ money because he controls Meta’s voting rights, just as Putin effectively controls Russia’s, while Musk has dissolved Twitter’s board. If all that’s scary, wait till the mightiest autocrat, Xi Jinping, discovers a passion.

Organisations needn’t be this dysfunctional. For an alternative model, see Apple. Its ruler Steve Jobs probably preserved his reputation by dying before hubris struck. Apple today isn’t very innovative, but has become the world’s most valuable company by monetising past successes, chiefly the iPhone. Its collective leadership is alert to risks. When Apple screws up, as with the butterfly keyboard of 2015, it eventually self-corrects. One day, Tim Cook will make way for a new, unexciting CEO. In fact, Apple is run like Germany. “Happy is the land that has no need of heroes,” wrote the German playwright Bertolt Brecht. Happy is the company too.

Follow Simon on Twitter @KuperSimon and email him at [email protected]

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