In contrast to our recent posts about respect and walking a mile in your employees' footsteps, I wanted to share this cautionary Forbes article, The Seven Habits of Spectacularly Unsuccessful Executives.
Sydney Finkelstein, the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth College, published “Why Smart Executives Fail” 8 years ago.In it, he shared some of his research on what over 50 former high-flying companies – like Enron, Tyco, WorldCom, Rubbermaid, and Schwinn – did to become complete failures. It turns out that the senior executives at the companies all had 7 Habits in common. Finkelstein calls them the Seven Habits of Spectacularly Unsuccessful Executives.Habit # 1: They see themselves and their companies as dominating their environmentThis first habit may be the most insidious, since it appears to be highly desirable. Shouldn’t a company try to dominate its business environment, shape thefuture of its markets and set the pace within them? Yes, but there’s a catch. Unlike successful leaders, failed leaders who never question their dominance fail to realize they are at the mercy of changing circumstances. They vastly overestimate the extent to which they actually control events and vastly underestimate the role of chance and circumstance in their success...Warning Sign for #1: A lack of respectHabit #2: They identify so completely with the company that there is no clear boundary between their personal interests and their corporation’s interestsCEOs who possess this outlook often use their companies to carry out personal ambitions. The most slippery slope of all for these executives is their tendency to use corporate funds for personal reasons. CEOs who have a long or impressive track record may come to feel that they’ve made so much money for the company that the expenditures they make on themselves, even if extravagant, are trivial by comparison... Being the CEO of a sizable corporation today is probably the closest thing to being king of your own country, and that’s a dangerous title to assume.Warning Sign for #2: A question of characterHabit #3: They think they have all the answersHere’s the image of executive competence that we’ve been taught to admire for decades: a dynamic leader making a dozen decisions a minute, dealing with many crises simultaneously, and taking only seconds to size up situations that have stumped everyone else for days. The problem with this picture is that it’s a fraud. Leaders who are invariably crisp and decisive tend to settle issues so quickly they have no opportunity to grasp the ramifications. Worse, because these leaders need to feel they have all the answers, they aren’t open to learning new ones...Warning Sign for #3: A leader without followersHabit #4: They ruthlessly eliminate anyone who isn’t completely behind themCEOs who think their job is to instill belief in their vision also think that it is their job to get everyone to buy into it. Anyone who doesn’t rally to the cause is undermining the vision. Hesitant managers have a choice: Get with the plan or leave.The problem with this approach is that it’s both unnecessary and destructive. CEOs don’t need to have everyone unanimously endorse their vision to have it carried out successfully. In fact, by eliminating all dissenting and contrasting viewpoints, destructive CEOs cut themselves off from their best chance of seeing and correcting problems as they arise...Warning Sign for #4: Executive <and top performer> departuresHabit #5: They are consummate spokespersons, obsessed with the company imageYou know these CEOs: high-profile executives whoare constantly in the public eye. The problem is that amid all the media frenzy and accolades, these leaders’ management efforts become shallow and ineffective. Instead of actually accomplishing things, they often settle for the appearance of accomplishing things... When CEOs are obsessed with their image, they have little time for operational details....As a final negative twist, when CEOs make the company’s image their top priority, they run the risk of using financial-reporting practices to promote that image. Instead of treating their financial accounts as a control tool, they treat them as a public-relations tool...Warning Sign of #5: Blatant attention-seekingHabit #6: They underestimate obstaclesPart of the allure of being a CEO is the opportunity to espouse a vision. Yet, when CEOs become so enamored of their vision, they often overlook or underestimate the difficulty of actually getting there. And when it turns out that the obstacles they casually waved aside are more troublesome than they anticipated, these CEOs have a habit of plunging full-steam into the abyss...Warning Sign of #6: Excessive hypeHabit #7: They stubbornly rely on what worked for them in the past...Frequently, CEOs who fall prey to this habit owe their careers to some “defining moment,” a critical decision or policy choice that resulted in their most notable success. It’s usually the one thing that they’re most known for and the thing that gets them all of their subsequent jobs. The problem is that after people have had the experience of that defining moment, if they become the CEO of a large company, they allow their defining moment to define the company as well – no matter how unrealistic it has become.Warning Sign of #7: Constantly referring to what worked in the past
While this article was intended for CEOs, the fact is that any leader can suffer from the unsuccessful habits. If you are responsible for a department or leading a change in your organization, check whether one or more of the above traits apply to you. And if so, utilize the wHolistic ChangeSM approach to help you define the business value and move toward a place where you are breaking out of the bad habits, and creating more positive, respectful ones!