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Help! My boss is El Chapo

On a makeshift gravel path near the Mexican city of Durango, Joaquín Guzmán Loera, better known as El Chapo, climbed out of his injured Cessna 206 to live.

He already knew one thing for some. Miguel Angel Martínez, the inexperienced young pilot he had recruited to transport cocaine from Colombia, did not work.

Two months earlier, a plan by mr. Martinez was a co-pilot, ran out of gas on the approach and broke the landing gear. This time, he had straight down so common that the propeller hit the ground.

The boss gave Martinez an improvised performance review. "Mr. Guzmán told me I was a really bad pilot and that he didn't want me to continue working for him as a pilot," he said. The bigger question was, of course, what El Chapo planned to do next.

When younger employees in most companies make a series of real errors, they know what to expect from their supervisors. I need you to clean your desk. When your boss is the alleged kingpin in the Sinaloa cartel, the protocol is a little different. When your employees have seen enough to testify against you, it's not an option to shoot them.

Mr. Guzmán's ongoing federal drug business trials in New York, where Mr Martinez told this story in testimony, has sparked a spreading operation that flooded the United States with as much as 4000 tons of cocaine, heroin, marijuana and methamphetamine. But witnesses have also offered a glimpse of something that is even more elusive: how a real doctrine manages people.

  Help! My boss is El Chapo


Photo illustration by Sean McCabe; ID CARD: Archivo / ZUMA Press

Within Mr Guzmán's alleged criminal enterprise, talent and work ability were less important than unconditional loyalty. In fact, abundant brain power can be dangerous. In a company where managers never retire, many ambitious lieutenants will be restless and in some cases try to top the boss.

In 1987, when Martínez botched that landing, El Chapo had only two realistic options, none of which was ideal. He could forgive the pilot and assign him another job, or he could shoot him.

Mr. Guzmán's shuttle bear carrier preferred the latter option. "He wanted to kill me," Martinez told the court.

After he calmly persuaded his henchman to holster his weapon, El Chapo Martinez pulled aside. He was ready to fly, but he would not die. In fact, he got a campaign.

Mr. Guzmán wanted to open an office in Mexico City to serve as a beachhead to wipe out bribes to his growing network of corrupt police and government officials, and he asked Martinez to run it.

In 1987, witnesses said Mr Guzmán had a small number of employees, including family members. He was a practical manager who still helped to load and unload his cocaine transport. He must have thought of the frugal Mr. Martínez could earn her life-long loyalty, so it was less upset and crushed than trying to train him.

By escaping from prison twice and killing a murder attempt, Guzmán, who has not committed all 17 bills in his federal accusation, including conspiracy to murder, has become a popular hero. Federal marshals reprimanded spectators outside the court to wave him or even blink his thumb.

His defense team claims he was a bit of a player in the drug world and that US law enforcement has inflated his reputation to make him seem like a bigger trophy than he really is.

  El Chapo ran a complex network of met men, guards, pilots and engineers. A Chicago Prosecutor refers to an organizational chart in 2015.

El Chapo ran a complex network of beaten men, guards, pilots and engineers. A federal prosecutor in Chicago refers to an organizational chart in 2015.


Charles Rex Arbogast / Associated Press

Witnesses say that El Chapo as a cartel leader participated in endless meetings and handled issues that are familiar to any CEO: sales, financing, pricing, distribution, marketing, quality control and risk management. At most, they say he employed scores of beaten men, security guards, pilots, engineers, accountants, and secretaries. owned aircraft, ships, ship boats, submarines, tankers and railway wagons and operated dozens of warehouses.

But the special needs of the cartel, such as creating shell companies, washing money and investing millions in bribery and military weapons, provided a high degree of complexity. In order to maximize the profits and stay out of prison, rival managers had little choice but to work together.

Running a criminal company on this scale made El Chapo aggressively paranoid. Witnesses say he bought scramblers to avoid detection and used wiretapping equipment to spy on rivals and monitor his own people. He showed no mercy to those who crossed him.

At the same time, he put his workers on gifts, treated them with respect, and often tolerated their stupid mistakes. In a recorded conversation with a dealer who had requested a discount on heroin, Guzmán said: "We are here for your service, you know that." In another recording, he quietly asked a lieutenant to quit police. "They are the ones who help," he said.

Mexican city office Mr. Martínez opened to the boss did not have a sign that said "Sinaloa Cartel", of course. "We pretended to be lawyers," he testified. El Chapo, who could go unnoticed on the street back then, turned out almost daily.

The boss went to his bungling ex-pilot by taking him on sentimental visits to his hometown of La Tuna and refused to let him carry a gun for fear he could hurt himself. When El Chapo asked to be the godfather of his newborn son, Mr. Martínez. "I was happy," he testified.

  Members of the Sinaloa cartel after their arrest in Peru in 2014. For El Chapo's workers, talent was less important than loyalty.

Members of the Sinaloa cartel after their arrest in Peru in 2014. For El Chapo's workers, talent was less important than loyalty.



Building love bands with a barely competent employee is not something we often associate with sociopaths. But the list of star witnesses in El Chapo's trial suggests that it may have been a cautious move.

The most damned testimony against him does not involve the blunders of individual employees; It has come from the creative treason of its best and brightest. Pedro Flores, a prolific Chicago retailer, like Mr. Guzmán personally kept on contacting law enforcement and began playing conversations in an attempt to save his family from a life of crime. Cristian Rodríguez, a Colombian IT whiz who built the cartel's secure communications network, gave the encryption keys to the FBI.

By 1993, Martínez testified that he was driving all Mr Guzmán's companies. He stored, packed and sent drugs to the United States and received and exchanged the money. The pilot who had initially written for $ 25,000 a flight had become El Tololoche – a plentiful successor to, as defense lawyers claimed, a devastating cocaine habit.

When Martínez was arrested and sent to a Mexican prison, his compaders ended abruptly. He claimed he survived a stabbing, a grenade attack, and two more attempts in his life ordered by Guzmán. He was eventually extradited to the United States, where he agreed to testify and was placed in the witness protection program.

The leadership doctrine here is a creepy one. Would legitimate CEOs put loyalty to talent and treat employees as family members – all while they obsessively spy on them? I do not think so. The main reason why this model worked for El Chapo is that even a moron can sell drugs to Americans.

Ultimately, the only thing that this attempt will contribute to the management canon is a new entry to the questionable list of terms companies have used to describe their attitude to human resources.

GE has once practiced "rank and yank." Other companies live by the motto "rent slowly, fire fast". If the Sinaloa cartel had chosen a management type, it could have been "coddle or kill."

Write to Sam Walker at sam.walker@wsj.com

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