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Origin of the Expression “You are Fired!” [Business Folklore]

February 3, 2010 By Nagesh Belludi 15 Comments

The term ‘fired’ is a colloquial expression for dismissing a person from employment. It became more popular as a result of the NBC reality show The Apprentice where the host, American businessman Donald Trump, eliminates contestants for a high-level management job by “firing” them successively. In 2004, Trump actually filed a trademark application for the catchphrase “You’re fired!”

Some sources suggest the expression may have originated from the verb “to fire,” as in “to discharge a gun.” However, legend has it that the phrase originated in the 1910s at the National Cash Register (NCR) Company.

NCR founder John Henry Patterson (1844—1922) is widely recognized as the pioneer of sales management and for developing formal methods for training and assessing salespersons. In spite of all his genius, Patterson was quirky. He sought total control of his surroundings, imposing his personal values on employees. As a food and fitness fanatic, he had employees weighed every six months. He often dismissed employees for trivial reasons just to deflate their self-confidence and, soon after, rehire them back.

Patterson’s employees and customers branded him abusive and confrontational. Patterson once dismissed an executive by asking him to visit a customer. When the executive drove back to NCR headquarters, he found his desk had been thrown out on the lawn. Right on time, his desk burst into flames. He was “fired.”

Thomas Watson Sr. was “fired” by NCR

Famously, NCR’s star sales executive Thomas Watson Sr. (1874–1956) met a similar fate. In 1914, Watson argued that NCR’s dominant product, mechanical cash registers, would soon go obsolete. He proposed that NCR develop electric cash registers. Patterson resisted the idea. He warned Watson not to overstep his boundaries and demanded that Watson focus on sales only and intrude into product innovation. Following an argument at a meeting, Patterson dismissed Watson. In a fit of rage, Patterson had workers carry Watson’s desk outside and had it lit on fire. Watson Sr. was thus “fired.”

Watson Sr. still believed in the potential for electric cash registers. He joined a smaller competitor, Computing-Tabulating-Recording Company (CTR,) which soon grew into International Business Machines (IBM.) Watson Sr. led IBM for forty years and turned it into the world’s leading technology company.

Source/Source: Keynote address by Mark Hurd, then-president and COO of Teradata at Kellogg School of Management’s Digital Frontier Conference on 17- and 18-Jan-2003. Teradata was previously a division of NCR Corporation, the company Patterson founded.

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Filed Under: Business Stories, Great Personalities Tagged With: Entrepreneurs, Hiring & Firing, Human Resources, Parables

Home Depot Stock Underperformance: Who’s to Blame?

January 5, 2007 By Nagesh Belludi Leave a Comment

Home Depot Chairman and CEO Robert Nardelli resigned on Wednesday. Since early 2006, Nardelli had been under a fair amount of criticism from investors primarily for disproportionate compensation and poor performance of Home Depot’s stock [HD].

In May of last year, the New York Times estimated that Nardelli had received compensation worth $245 million during the first five years of heading the company. During this time, Home Depot’s stock had slid some. The stock performance was especially poor when compared to that of Home Depot’s archrival, Lowe’s [LOW].

Is the company management completely at fault for the fact that the share price has gone nowhere in the last six years? After all, during Nardelli’s tenure, Dec-2000 to Jan-2007, Home Depot’s has grown significantly and profit margins have improved. Here are key numbers (2007 data are Wall Street consensus estimates for the financial year ending 31-Jan-2007.)

  • Revenues increased from 45.7 billion to 91.0 billion, an increase of 100%
  • Net income increased from 2.6 billion to 6.2 billion, an increase of 140%
  • Earning per share (EPS) increased from $1.10 to $2.95, an increase of 170%
  • Dividends (per share) increased from $0.16 to $0.90, an increase of 460%

Lesson for Investors: Perspective in Valuation

During the late eighties and nineties, Home Depot grew exponentially under the leadership of its founders. Naturally, its stock was very popular on Wall Street and attracted rich valuations. The Price to Earning ratio (P/E) of the stock was high; so was the PEG ratio (the ratio of P/E to growth rate). Investors ‘bought high’ and ‘sold high’ during this period: they purchased at rich valuations and sold at rich valuations, as with any other growth stock.

Home Depot Stock Underperformance: Who is to Blame?

After Nardelli assumed leadership of the company in December 2000, investors continued to expect richer valuations. In the post-bubble period, Home Depot’s stock lost its sheen; it lost the rich valuations it once attracted. Its P/E ratio was now comparable to that of mature companies. Further, stocks of large, blue chip companies (GE, Intel, Microsoft, Wal-Mart, Citigroup, Pfizer, etc.) went out of favor on Wall Street from year 2001. Despite impressive earnings growths, these companies have suffered from decreased interest in their stocks (see story and chart on Business Week’s cover story and accompanying chart from April 2006.)

Investors often have undue expectations of stock prices of rapid-growth companies and lack perspective on stock valuations as such companies mature.

Filed Under: Business Stories, News Analysis

Procter and Gamble: One of the world’s best breeding grounds for managers

December 15, 2006 By Nagesh Belludi 1 Comment

Procter and Gamble BrandsA senior colleague at work recently mentioned that Procter and Gamble [PG] recruited his daughter as a management trainee. She would work at the corporate headquarters in downtown Cincinnati, Ohio. He said, “She interviewed at General Electric [GE] and got rejected in the last round of interviews. She was very disappointed; GE was her top choice.”

General Electric’s management practices and vast managerial talent are widely recognized as one of the world’s best. Its leadership development program and the John F. Welch Leadership Center at Crotonville, New York state, receive wide publicity, especially in the print media.

Procter and Gamble is equally well known as one of the best breeding grounds for managers. Its reputation for hiring the best young talent, training them rigorously, and challenging them with opportunities in marketing, product strategy and operations is legendary.

“Many CEOs and top managers in corporate America are Procter and Gamble alumni,” I explained to my colleague that his daughter out to be thrilled she joined Procter and Gamble. “So, she has a chance, haan?” replied my colleague, ending the conversation.

Procter and Gamble Alumni

From memory, I compiled a list of current corporate leaders that, at some point in their careers, worked at Procter and Gamble. Here it is for your reference.

  • Jeffrey Immelt, CEO, General Electric
  • Steven Ballmer, CEO, Microsoft
  • Steve Case, former CEO, America Online (AOL)
  • James McNerney, CEO, Boeing
  • Margaret Whitman, CEO, eBay
  • Stephen Sanger, Chairman and CEO, General Mills
  • Crispin Davis, CEO, Reed Elsevier
  • Scott Cook, CEO, Intuit (Quickbooks, etc.)
  • Michael Szymanczyk, Chairman and CEO, Philip Morris USA
  • Paul R. Charron, Chairman, Liz Claiborne
  • Bernd Beetz, CEO, Coty
  • James Orr, CEO, Convergys

Filed Under: Business Stories

Virus on iPods: Apple blames Microsoft Windows

October 20, 2006 By Nagesh Belludi Leave a Comment

On Wednesday, Apple’s iPod support website acknowledged that a small number of video iPods were infected with a Windows virus. In addition to describing the scale of infection and providing instructions to remove the virus, the website blamed Microsoft Windows for the glitch.

“As you might imagine, we are upset at Windows for not being more hardy against such viruses, and even more upset with ourselves for not catching it.”

Apple’s “114,000 viruses? Not on a Mac” advertisements have lately targeted Windows users to ‘Get a Mac’. Presumably, someone at Apple [AAPL] believed that blaming Microsoft Windows for viruses on the iPod could extend its ‘Get a Mac’ campaign. The outcome is a cheap shot at the competition.

The iPods were apparently infected with the virus at one of Apple’s contract manufacturers. There is no reason for Apple to be “upset” at Microsoft for not being more hardy against such viruses.” Microsoft [MSFT] has invested significant resources (money and talent) fighting hackers and improving its software development process. As Jonathan Poon of the Microsoft virus-scanning group pointed out on his blog, Apple should blame its own manufacturing system.

“It’s not a matter of which platform that the virus originated. The fact that it’s found on the portable player means that there’s an issue with how the quality checks, specifically the content check was done.”

Apple should also blame hackers, who were creative enough to get malicious code embedded on an Apple product while it was connected to a Windows machine on Apple’s manufacturing line.

The take-away lessons: (1) possess a healthy respect for the competition, and, (2) blaming the competition without cause constitutes poor taste.

Wondering what to read next?

  1. When Growth Stalls: A Case Study of the iPhone
  2. Three Leadership Lessons from Ron Johnson’s Debacle at J.C. Penney
  3. Bill Gates and the Browser Wars: A Case Study in Determination and Competitive Ferocity
  4. No Amount of Shared Triumph Makes a Relationship Immune to Collapse
  5. Evolution, Not Revolution

Filed Under: Business Stories, Managing Business Functions, News Analysis Tagged With: Apple, Microsoft

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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