Forbes Business Magazine recently republished an 2004 Article by Sydney Finklestein (the Steven Roth Professor of Management at the Dartmouth College Tuck School of Business) titled : “Why Smart Executives Fail”. His research had shown that senior executives of failed companies all had 7 traits in common, he termed them “The Seven Habits of Spectacularly Unsuccessful Executives”. A precis follows:
1. They see themselves and their companies as dominating their environment. Leaders who never question their dominance fail to realize they are at the mercy of changing circumstances. They vastly over-estimate the extent to which they actually control events, and vastly underestimate the role of chance and circumstance in their past success.
2. They Identify so completely with the Company that there is no clear boundary between their, and the corporation’s interests.
Instead of treating companies as enterprises they needed to nurture, failed leaders treated them as extensions of themselves. And with that, a “private empire” mentality took hold.
3. They think they have all the answers. Leaders who appear to make all the decisions quickly and decisively, tend to settle issues so quickly they have no opportunity to grasp all the ramifications; and because they feel the need to have all the answers, they aren’t open to learning new ones.
4. They ruthlessly eliminate anyone who isn’t behind them.
Anyone who doesn’t rally to the cause is seen as undermining the leader’s vision. They have a choice: get on board or leave. And by eliminating all dissenting viewpoints, destructive CEO’S cut themselves off from seeing and correcting problems as they arise.
5. They are consummate spokespersons, obsessed with the Company image.
They like to be constantly in the public eye. Instead of accomplishing things, they often settle for the appearance of accomplishing things. In this way, they run the risk of using financial – reporting practices to promote corporate image. Instead of treating their financial accounts as a control tool, they treat them as a public-relations tool (creative accounting!)
6. They underestimate obstacles.
When CEO”S become so enamoured of their vision, difficulties, or obstacles in their way are often casually waived aside, thus plunging the company full-steam into the abyss.
7. They stubbornly rely on what worked for them in the past.
They cling to tried-and-true methods- a static business model. They will insist on providing a product to a market that no longer exists; or fail to consider a range of options that fit new and changing market circumstances. They do things that made them successful in the past.
The full Forbes article can be seen on : HERE:
Writers notes:
#: Most observers of managerial leadership in big and medium-sized businesses will have observed some (or even all) of these business traits in CEO’s, at some time. They may even have been evident in the Tasmanian business scene.
#: As a long-time student, practitioner, lecturer and consultant on ‘management’, its been my experience that these traits in business leadership are more common than most would expect.
#: the Finklestein article, while resonating with me in terms of its findings, should more correctly have been titled, in my view: ” Why the not-so-smart Executives fail”.
#. The article provides a cautionary reminder to senior executive staff in the 21st C not to be stuck in the past, inflexible, and blind to rapid changes in markets and todays business environment.
