The sentiment sounds so contemporary that the words might have been written by any of the wage slaves among us faced with a corporate restructuring that extends to our department. Actually, it was written almost 2,000 years ago by a courtier to the Roman emperor, Nero, and its age only adds weight to the notion that humankind has an obsession with reorganisation that time cannot erase.
Okay, there is also the view that this famous quotation does not date back to Ancient Rome, even though the steady procession of matricide, patricide and suicide on the banks of the Tiber might have necessitated continual reorganisation. It may have been written in the mid-20th century by an American writer and passed off as coming from the stylus of Nero's adviser, Petronius. Yet, if it's a fake, that's fine because, according to management consultants McKinsey & Co, the words of Petronius are baloney anyway.
At least, in addressing the question - What makes a chief executive exceptional? - McKinsey says that the best bosses jump in with a reorganisation early in their tenure. "CEOs joining low-performing companies derived the biggest benefits from conducting a strategic review," says the management consultant in the latest edition of McKinsey Quarterly. Using a sample of 599 chiefs who ran US companies in the S&P 500 index between 2004 and 2014, McKinsey's data showed that the best performers were the ones most likely to conduct a strategic review in their first two years in the job.
True, a 'strategic review' does not have to lead to a reorganisation. Yet most likely it will - after all, what's the point of it otherwise? However, the exceptional bosses of McKinsey's sample bided their time. "Organisation redesign appeared to be a critical part of the typical high-performing CEO's tool kit," says McKinsey. But the top bosses - where their performance was measured by total return to shareholders adjusted for some unspecified sectoral biases - were less likely than the average to instigate organisational changes or reshuffles of management in the first two years of their tenure.
That might be because, as McKinsey notes, any company can cope with only so much disturbance in a given time, so it's right to slot the changes into a clear sequence. One near certainty, however, is that a cost-cutting programme will figure; such an exercise is "a no-regrets move for all CEOs", says McKinsey. And the best performing chiefs were more likely than average to hack away at costs quickly, perhaps proving that cost-cutting is the easiest way to lift profits, which, in turn, is the quickest way to raise a share price.
More counter-intuitive stuff from the survey shows that new bosses are more likely to produce good performance if they take their company on an acquisition binge early in their tenure. I exaggerate, but McKinsey makes two related points. First, bosses tend to do more deals - both purchases and disposals - in their early years. Second, those who follow a course of 'programmable' dealmaking - ie, small and often - do better than the bosses who do big and infrequent deals; as so much research shows, big deals tend to destroy value.
Under pressure to do something quick and impressive, newly appointed bosses on average do one-and-a-half times more M&A in the first two years of their control than their company did in the five years up to their arrival. So if, say, a company did six deals in the five years before the boss arrived, it will do nine in the following two years - quite an increase.
This burst of activity was consistent throughout the 10 years under review, says McKinsey, and applied across all sectors, so it might be considered a given. Equally consistent is the way that the dealmaking drops off as the boss becomes part of the furniture, and especially after five years. That observation applies both to average CEOs and to those in the top 20 per cent. After a while, they have done whatever chopping and changing they are keen to do. Thereafter it only remains to live with the mess; to keep the company ticking over if the changes they wrought were good and, if they weren't, to pretend they were anyway.
Last but not least is the matter of where the new chief came from - basically, outsiders have the edge. McKinsey's research shows that those bosses hired from outside are twice as likely to produce top performance as the internal hires. Distilled to percentages, 22 per cent of bosses in the sample of 600 were hired externally but they comprised 45 per cent of the stars whose companies' total shareholder returns rose at least 500 per cent over their tenure.
All of which may mean that, among FTSE 100 companies whose chief is still newish in the job, shareholders of, say, GlaxoSmithKline (GKS), Standard Life (SL.) and perhaps Rolls-Royce (RR.) should be wary (was the appointment of Warren East, a non-executive director of Rolls, internal or external?). Meanwhile, shareholders at Wm Morrison (MRWM), Intertek (ITRK) and Prudential (PRU) might feel pretty chipper. True, almost certainly it won't work out like that. But of one thing these shareholders should be sure of - the coming months should see plenty of activity.
