Good at picking winning horses? Think being boss is tough? Your destiny could be to ride along.
Some big-buck cravers don’t want the buck to stop with them. Ride-alongs rise high, play critical roles, are well-respected leaders, and get rich—but never bear a CEO’s ultimate pressure. Ride-alongs don’t point the way. They find the right horse, hitch their wagon to it, and help the horse. Though they may never wear a CEO’s crown, some famous ride-alongs boast billions—Buffett’s sidekick, Charlie Munger, for one, with $1.3 billion.1
This is no cakewalk! It’s devilish trying to divine whether the CEO you follow is leading you to new heights or off a cliff. Real ride-alongs aren’t lemmings or stooping yes-men (though bad ones can be). No! Ride-alongs have the board’s, the employees’, the shareholders’, and the CEO’s respect—and are paid for it. And, they can say and do things CEO’s can’t. The CEO is too public! Too visible! When it’s time to play good cop–bad cop, guess who plays bad cop? Maybe they don’t make founder-CEO mega-wealth, but great ride-alongs get big pay, firm ownership, and big net worth.
Sound worse than being Dr. Evil’s cat, Mr. Bigglesworth? No! Don’t equate ride-alongs with “toady” or “groveling sycophant.” Toadies aren’t powerful—ride-alongs are. This isn’t just being a top corporate officer—it is being a partner the CEO won’t do without.
Top ride-alongs make bucks rivaling other roads. They don’t quite keep up with the Richest Road (Chapter 1) or the OPM Road (Chapter 7), but they do as well as or better than other roads. Munger’s $1.3 billion is far from Buffett’s $65.5 billion. But still! eBay’s first employee, Jeffrey Skoll, was a Jerry Yang ride-along, now with a $4.1 billion net worth.2 Christopher Cox, Facebook’s Chief Product Officer and Mark Zuckerberg’s right-hand man, collected nearly $12 million in total 2015 pay.3
Another advantage? There are many more opportunities to ride along than to be CEO. A single CEO can have multiple ride-alongs—big firms can have many senior VPs, directors, and other senior managers. You may not reach Bill Gates–style wealth, or even Jeffrey Skoll–style, but you can get mega-wealthy here. Make no mistake—these guys (and gals) aren’t just riding coattails. This is no free ride. They are legitimate leaders with awe-inspiring accomplishments. Rupert Murdoch’s old ride-along, Peter Chernin ($28.8 million in total earnings during his last year as News Corp COO), launched The Simpsons and Beverly Hills 90210—huge hits for Fox.4 He was key in Murdoch’s DirecTV negotiation and responsible for making Fox a hit-movie machine. And his name was often suggested as potential CEO for Disney.5
Many just don’t set out to be CEO. It’s tough! Huge risk, tensions, personal sacrifices—not good for bad hearts. It can be much easier to follow. Steve Ballmer, Microsoft’s former CEO, was with founder Bill Gates since almost day one—an ultimate ride-along. He evolved later to be CEO in 2000, but first he ran numerous areas (a typical ride-along trait). Our pal Hank Greenberg (who didn’t diversify and lost billions) from Chapter 2 was another longtime ride-along, longer-time CEO. Apple’s Tim Cook, hired shortly after Steve Jobs returned to the fold, joined the ride-along-turned-CEO ranks in 2011.
But the ride-along road to CEO-dom isn’t easy, smooth, nor for everyone. Recall Stan O’Neal from Chapter 2 was long a loyal, respected Dave Komansky ride-along, but was run out as Merrill Lynch’s CEO. David Pottruck, too, was a Chuck Schwab ride-along who failed fast as CEO.6 Riding along is one path to CEO! But riding along forever is a legitimate road on its own, with no detours.
Another risk and benefit trade-off: Shareholder lawsuits are a huge business (see Chapter 6). CEOs are personal and media targets. Maybe you don’t want that—or your kids’ friends reading about it. You’ll be impacted as a ride-along, but not like the CEO—the face of the firm—who bears the brunt of the ill will, the depositions, and the stress.
CEOs are often portrayed as heroes or villains—it’s that stark! And even if monstrously successful, they’re skewered for their big payday (like Chapter 2’s Lee Raymond). Being a ride-along doesn’t make you immune, but it takes the bull’s-eye off your back. It can be a better lifestyle.
Some ride along forever because they know they don’t have the stuff to be CEO. Big-time successful CEOs are usually charismatic leaders. Not everyone inspires. Maybe you just don’t want your employees’ and shareholders’ fates ultimately on your skinny shoulders. Many folks don’t!
In basketball, the fabled players are those who—in the game’s last four seconds, when they’re down two points and their team is inbounding the ball—think, “I hope I get the ball!” That’s a freaky way to feel! Many don’t want it. What if you get the ball and don’t hit the three-pointer to win? Infinite pressure! Guys who really want the ball right then, right there, are CEO types. But the guy inbounding with the lightning-fast pass to the guy who really does want the ball—he’s the ride-along.
In some ways, being a ride-along is harder. You get few accolades. Ride-alongs usually aren’t on TV or profiled in Forbes (until you become Charlie Munger). But ride-alongs get huge perks—big pay, respect (at least within the firm)—without the giant bull’s-eye. And they get a private family life. Aspiring ride-alongs often write their own tickets. Want to run sales? The CEO sees it as a broadening feature that’s good for you. Want to open the London office? Just tell the big man (or lady) and it can happen. And you can have a great life. Sold? Great—but how do you get there?
Finding the right CEO-leader and firm is vital. Ride-alongs remain with the same firm a long time. Even if hired as a high-ranking guy, they subsequently stick with the firm. Ballmer rode along 20 years before becoming CEO. And Munger has been with Buffett over 57 years.
To be taken seriously, you want a long history with whomever you’re riding along with—and an image from all sides of complete loyalty. CEOs get hired in from outside, but ride-alongs rarely do—unless hired in with a new CEO. But even when brought in, like Munger and Buffett, they often already long knew each other.
If you’re young, start now. Cox ditched grad school to join Facebook in 2005 and was Zuckerberg’s chief of staff by age 28. But, if you’re further into your career, you needn’t make drastic changes—unless you’re in a shrinking or dying industry. Then you should change regardless. For this, all of Chapter 10’s rules on picking a profession apply. But do even more research to ensure you’re in a field you want to stick with. As always, pick a relevant field likely to become more so.
Or not! In 2004, a young buck named JB Straubel went to work for a visionary who wanted to revolutionize American autos. Maybe you’ve heard of him: Elon Musk. Straubel quickly became Tesla’s chief technology officer in 2005, and he still rides shotgun, earning over $11 million in 2014.7
Forever, American autos have been irrevocably doomed. All my adult life, Ford and GM have been trying to go bankrupt, but they just aren’t very capable so it takes them a long time. GM is so bad at bankruptcy that it filed for Chapter 11 in June 2009 and still hasn’t gone out of business. I have abundant confidence it will get there eventually. Maybe Tesla will help speed them toward that goal. Or, maybe Tesla will keep losing mountains of money and join GM on the road to irrelevance. Maybe you will ride along with another visionary, unknown today, who will drive the lot of them out of business.
Transforming moribund firms and industries takes vision and chutzpah. Take once-upon-a-time heavily unionized Caterpillar. It hadn’t done well for a long time. In 1994, then-CEO Donald Fites had a vision, but to implement it, he would need to free his firm from the union’s shackles. So he did what few unionized CEOs have the courage for—he took on his union and won. Caterpillar was picketed for 18 months. Fites refused to cave. He called the union’s bluff! Thirty percent of his workforce walked off the job, so Fites hired temp workers. Even his white-collar executives pitched in—his lawyers learned to weld. After that, his union lost power and Caterpillar boomed—and continues to boom.8 You want to ride with a guy like that. Visionary, tough, single-minded, and futurist.
But how do you find him or her? Take Ken Iverson (from Chapter 2). His two initial key ride-alongs, Dave Aycock (operations) and Sam Siegel (finance), did well in life, believing in Iverson and loyally playing help-the-leader. They both told me essentially the same thing about how they chose to ride along with Iverson: They didn’t—it wasn’t really a choice.
In the last chapter, I told you from the moment I met Iverson he simply bowled me over, and I’m not that easy to impress. He did the same thing with Aycock and Siegel, and they weren’t that easy to impress, either. You’re looking for someone who is everything you aren’t and a visionary to boot. You’re looking for a leader. You’re looking for someone with a certain magic about them, charisma or not. And you keep looking until you find that one person. It’s a lot like seeking a spouse.
You can pick an established firm with an established leader to start your ride, or an entirely new venture—both have ride-along pros and cons.
On the established route, you needn’t pick the field’s number one firm, though you can. Becoming a high-ranking ride-along in any S&P 500 firm would be profitable. You can find compensation for any large- or medium-sized public firm by checking proxy statements posted on their website. Ever heard of Michael G. Vale? No? He’s executive VP of the Consumer Business Group at 3M and made $4.1 million in 2015.9 How about Dr. Jon R. Cohen? How can you not know Jon? He made $2.8 million in 2015 as a senior VP at Quest Diagnostics,10 a much smaller firm. You don’t know these people; I don’t, either. But someone high up in their established firms knows and likes them. You can be like that.
What you want more than anything is a leader-CEO. One person! Your Ken Iverson. Bigger bucks come from riding with a visionary CEO in a small firm doing a product revolution and helping grow it to a massive size.
But the risk here is great. Will you end up at Google? eBay? Or will you pick wrong, joining WebVan, Petopia, or SweetLobster.com, thinking Internet lobster shipping is the future? Sometimes it’s obvious. TootsieRollsForEver.com may be an obvious loser, but rewind 20 years. How would you know which search engine would be tops? Google didn’t even exist then! That’s when you need serious private equity–style analysis chops. Whether a wholly new field or product or an existing one, you must analyze the business strategy and management team. You may have the world’s best strategy but a dumbo management. The real key is the leader.
The horse you hitch to is what matters. Some say, “Find someone with a fancy pedigree.” Wrong! Pedigrees are fine but don’t predict CEO or ride-along success. Steve Jobs dropped out of Reed College—not a top 20 school. Don’t get me wrong—Reed doesn’t produce dopes. My great friend Stephen Sillett, a brilliant guy doing revolutionary research on redwoods, graduated from Reed. But either Steve could have gone anywhere—Podunk-ville Junior College—and been huge. My point is, Harvard, Reed, Podunk-ville—whether you finish or not—doesn’t matter! (Bill Gates is perhaps Harvard’s most famous dropout, followed closely by Mark Zuckerberg.) I went to community college and Humboldt State University (where Sillett researches), but that never stopped me at all, and a pedigree or lack of it won’t make or break you.
So what made early Apple-ites choose Jobs? Or Gates? Or Buffett? Or Musk? Or any of the wildly or even modestly successful CEOs who inspired ride-alongs to join them? Charisma and vision. They have it—you have to figure out if it’s real or not.
Plenty of people with charisma and vision still flame out. Again, think like a private equity guy and review that section in Chapter 7. Then answer the following questions:
Once you’ve found the right person to drag you along through his or her success, go with your gut. Either you trust and completely admire this person or you don’t. If you do, be endlessly loyal. That’s what a CEO demands from a ride-along as a quid pro quo for being the one the CEO can’t do without. If you can’t find it within you to entrust your future success to the fate of one leader, you may be better off taking the established firm route. That works! But the bigger bucks are definitely in being a ground-floor ride-along.
So you found the firm and horse. How do you become the one who gets to ride along? How do you become the one who catches the visionary’s eye? The one he can’t do without? Again, it’s loyalty! Loyalty today is more valuable than it has ever been because it’s scarcer. Ever since the 1960s, our society has extolled the virtues of whistleblowers, activists, he who quits and goes out on his own, protesters, radicals, someone who is no patsy, someone who tells the big guy to blow—you get the point. Wall Street (1987), The Firm (1993), and The Informant (2009) are just a sampling of movies playing to the fantasy that the boss is bad and he who upends him is good. That aims squarely at the CEO, who in turn, more than ever, values loyalty.
Successful ride-alongs live and breathe the firm’s vision—and not just superficially or for show (which is why you need a firm you love in a field that excites you). Your colleagues should point to you and say, “That guy is on board,” but not think you’re witlessly drinking the Kool-Aid. CEOs and other senior managers (if you aren’t one yet) want to know for certain you’re beyond “in it for the long haul.”
Loyalty implies trustworthiness—what’s most important. If early on you can’t be trusted not to spill the beans on the impending Christmas party’s details, no one will trust you later with details for a top-secret product launch. Be loyal, but give feedback honestly. Successful CEOs rarely hear no much. Hence, many super successes, not just CEOs, go a bit bonkers. Take Michael Jackson and Madonna—for a long time, no one told them, “You know, I think what you’re doing is a really bad idea.” Jackson had enablers up to the very end. This happens to CEOs surrounded by fearful yes-men. You must be brave enough to say no, but loyally.
One of the legendary things that made Ballmer so invaluable to Bill Gates was his ability to politely tell Gates when he was wrong while still being and seeming ever-loyal.
Munger is known at Berkshire as “The Abominable No-Man.”11 But don’t just say no to be contrary! Say no and bring new insight. If you’re loyal and trustworthy with a good track record of unique insight, the CEO will listen and love you. You must truly believe, in your heart, that your firm is right and just and holy; otherwise, you won’t make a good ride-along. You must believe your firm is making the world better. That you’re making your CEO perform better. That any shortcomings can be overcome—no obstacle is too great. And that while the firm isn’t perfect, its benefits overwhelm its shortcomings, and those shortcomings can be fixed.
Ride-alongs can’t grouse or complain. All you can do is present a strategy to fix what irks you. Ride-alongs aren’t bitter—they’re rational but enthusiastic firm cheerleaders. If you don’t think you can feel that way about your CEO and firm and you want this road, it’s time to find another firm or horse—or both. If you’re sarcastic, take a different road.
If you’re an engineer who only wants to write code, it’s tough to ride along. The CEO’s sidekick must know or learn sales, marketing, branding, manufacturing, supply-chain management, you name it. Jack Welch made this management style the one to emulate. His managers ran one division, then rotated elsewhere. He had depth guys (and gals) who never rotated but had deep, unmatched knowledge in their area. But he also had breadth guys and fostered that. In essence, he was creating an army of ride-alongs and a stable of potential future CEOs—not only for his firm, but for any major American firm. Who wouldn’t want a Jack Welch School of Management ride-along leading their firm?
Which raises another point—one huge at my firm. I want people with a will-do attitude. Note I said will do not can do. There’s a difference. Can do means capacity and capability. That’s nice—cuts it at some places. Not with me and not at GE. When Jack Welch said, “Bob, love your work on microwaves and appliances. Kudos! But I really need you in water now, particularly emerging markets purification plants. You’ll be stationed in Djibouti City. Okey dokey?” Bob didn’t say, “OK, Jack. I can do that.” Bob knew nothing about water purification and couldn’t find Djibouti with both hands and an army-issued GPS. But Bob happily said, “Great, Jack. Yes, I will do that.”
Can do is what’s on your resume. Will do means you eagerly stretch beyond—outside your comfort zone. You jump. You will complete the task. You will do what’s important for the firm, whatever it is. You will take relevant skills and talent and get on the learning curve, fast. You will hire people, perhaps smarter than you, who know more than you and can make Djibouti a success. It isn’t about you—it’s about the firm and the CEO’s success. His or her success is yours. It’s a little about you because you get to go on a roller-coaster ride that, should you survive, makes you better and ready for the next will-do task. But in essence, it’s about doing what you will for the firm and CEO, not what you know you can. Huge difference.
Good ride-alongs live the will do. They don’t whine about shipping to Djibouti. They say, “Done.” They volunteer for the ickiest and most unglamorous tasks and don’t complain that it’s after 5 PM. You may think this jeopardizes your standing, but believe me, the guy you want to ride along with notices when you will happily do otherwise nasty tasks. That’s a guy (or gal) loyal and wanting to go above and beyond and do what’s best for the firm and CEO.
Being a good ride-along really is like being a good spouse. A good spouse or ride-along does what’s right, first and foremost, and is loyal. She knows when her partner is being an idiot and isn’t scared to tell him. (I say “her” because I know which side my bread is buttered on.) He or she has a will do attitude (e.g., “Yes dear. I will clean the gutters”; “I will watch the Ryan Reynolds flick where he isn’t an action hero blowing up bad guys and everything is exciting, but the one where he plays a romantic lead and nothing explodes for three dreadful hours”). A good ride-along or spouse sees the other for all his (or her) faults and still loves him (or her). Being a good ride-along is like getting married—only these relationships often last longer and pay better!
I’ve just given you the basics. There’s plenty more you can do to research and prepare for this road. The following books provide guidance as you plan your ride-along route.