Cronyism
An executive who brings in legions of friends to work for the company with inflated job titles. Some executives have a career pattern of bringing the same 30 people with them to every company. This kindness is reciprocated such that the executive is never out of a job even if their performance is unreasonably low.Elitism
A growing company is tempted to demand an ivy league education and experience with large reputable firms of all new hires. As such, candidates with other merits are overlooked. This can result in the culture of very large firms being imported into a smaller company that is still trying to grow.Overconfidence & Entitlement
Executives who become complacent and overconfident due to a firm's early successes with an exaggerated sense of entitlement. A sense of humility or an extremely competitive nature is typically required for a firm to recognize that early successes can easily go to waste if a company doesn't continue to deliver.Perverse Incentives
A firm that is able to raise significant capital based on its growth rate may lack discipline in structuring salary and incentives for performance. This tends to attract and encourage poor performance. For example, if a stock falls 90% and the firm is acquired due to its low price executives might be generously compensated according to the terms of their contract.Overview: Bozo Explosion | ||
Type | ||
Definition | A tendency for a firm to become filled with unproductive and unimaginative executives and middle management as it grows. | |
Etymology | Bozo is slang for clown based on a popular character from the 1960s, Bozo the Clown. The term bozo explosion is associated with Steve Jobs. In a 1990 interview, Steve Jobs refers to "Bozo managers." The term bozo explosion originated in Silicon Valley and was possibly coined by Steve Jobs. | |
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