|
Extreme habits can lead to executive failure
By Barbara Poole
Contributing Writer
Why have some smart executives failed in recent years? Corporate scandals involving CEOs from the likes of Enron, Webvan and WorldCom have brought entire companies to ruin.
CEOs at Motorola, Rite Aid, Mattel, Quaker and Saatchi & Saatchi also led their companies to the brink of collapse at various points in time.
These companies were led by executives with stellar track records of previous success.
CEOs are now lasting 7.6 years in office on a global average, down from
9.5 years in 1995, according to consulting firm Booz Allen Hamilton. Two out of every five new CEOs fail in the first
18 months (HBR, January 2005).
While the corporate cultures of failed businesses vary widely, there are visible patterns of similarity across CEOs.
Sidney Finkelstein, author of Why Smart Executives Fail, researched several spectacular CEO failures and their causes over a six year period. He found several patterns that might explain what went wrong.
Finkelstein offers four explanations for CEO behaviors that lead to failure:
• Executive mindset failures. Breakdowns in how executives perceive reality for their companies.
• Delusions of a dream company. People within an organization do not face up to the real needs and issues within the business.
• Lost signals. Information and control systems in the organization are mismanaged.
• Patterns of unsuccessful executive habits. Organizational leaders adopt any number of personal unsuccessful behaviors that can bring them down.
Finkelstein identifies seven patterns of maladaptive executive behaviors, each with a warning sign. He arranges these into seven habits:
Habit 1: CEOs see themselves and their company as dominating their environment.
On the positive side, this attitude is seen as highly optimistic. Optimism is a primary trait of successful leaders, and it contributes to the ability to inspire and communicate vision.
Carried to the extreme, it can cause a leader to lose touch with reality.
Warning sign: A lack of respect.
Habit 2: CEOs identify too closely with the company, losing the boundary between personal and corporate interests.
On the positive side, this trait also means that an executive works long, hard hours over and above what is expected.
However, carried to the extreme, a leader gains a sense of entitlement to compensate for his or her sacrifices. It paves the way for unethical decisions.
Warning sign: A question of character.
Habit 3: CEOs think they have all the answers.
High intelligence and an ability to solve problems quickly and decisively are essential for leadership.
But when the leader who thinks he is infallible forgets to ask for input or adequate information before making and acting on a decision, decisions can be disastrous.
Warning sign: A leader without followers.
Habit 4: CEOs ruthlessly eliminate anyone who isn’t completely behind them.
While knowing who to promote and who to reassign or fire is an essential responsibility of any leader, decisions based on favoritism are irresponsible and risky.
When the senior team is comprised of ‘yes’ people, there isn’t enough dissention to evaluate risks appropriately.
Warning sign: Executive departures.
Habit 5: CEOs are consummate spokespersons, obsessed with the company image.
While getting press coverage is seen as good for share prices, when CEOs appear to be promoting themselves more than the company, beware.
Warning sign: Blatant attention-seeking behavior.
Habit 6: CEOs underestimate obstacles.
Optimism is the underlying trait that works for motivating and inspiring, but carried to the extreme, it can obliterate adequate risk evaluation and reality checks.
Warning sign: Excessive hype.
Habit 7: CEOs stubbornly rely on what worked for them in the past.
The problem is, nothing stays the same. It is human nature to go back to what worked before when things get tough.
But applying yesterday’s solutions to tomorrow’s problems can’t work. Knowing what problems to solve is a challenge for CEOs.
Warning sign: Constantly referring to what worked in the past.
It is tough work being a CEO these days. But there are ways to minimize the negative habits that can otherwise lead to career failure.
Next time, we will look at how to avoid the traps that can bring good leaders to their knees.
Barbara Poole is a leadership and career development coach with Success Builders Inc. E-mail her at CoachBarbara@SuccessBuildersInc.com.
|
E-Mail This Article
Printer-Friendly Version