Wednesday, January 23, 2008

Why CEOs Fail by David L. Dotlich and Peter C. Cairo

A short little book on the recommended reading list of the headhunter that got me my current job, and another one really geared more for the for-profit business world than the non-profit association one. Still, it’s overall message is good.

CEOs fail because they exhibit behaviors that ultimately lead to their own downfall. There are eleven such behaviors featured in the book, and whatever you think of them, at least they are not rounded off to some round number and named in such a way that all their first letters spell out FAILURE or some other such mnenomic device. Makes it more persuasive that there’s actually some kind of practical research backing all this up. Anyway, the eleven behaviors are:

1. Arrogance – you think that you’re right, and everyone else is wrong.
2. Melodrama – you need to be the center of attention.
3. Volatility – you’re subject to mood swings.
4. Excessive Caution – you’re afraid to make decisions.
5. Habitual Distrust – you focus on the negatives.
6. Aloofness – you’re disengaged and disconnected.
7. Mischievousness – you believe that rules are made to be broken.
8. Eccentricity – you try to be different just for the sake of it.
9. Passive Resistance – what you say is not what you really believe.
10. Perfectionism – you get the little things right and the big things wrong.
11. Eagerness to Please – you try to win the popularity contest.

Performing a self-diagnostic, I would say that the three I’m most challenged by (the only three that I’m challenged by as far as I can tell) are Excessive Caution, Habitual Distrust, and Aloofness. Let’s take them one at a time.

Excessive Caution. Here’s how the authors define the line between being appropriately prudent and being overly cautious. Do you:

1. Analyze a situation before you make a decision? OR Require second and third opinions before making any decision?
2. Look at worst-case scenarios before moving forward? OR Obsess about what might go wrong and eventually get stuck?
3. Go slow before deciding because the wrong decision can have serious consequences? OR Go slow before deciding because you believe every decision can have serious consequences?
4. Turn down requests for projects and resources when you have hard evidence that flaws exist? OR Don’t give people the go-ahead because of your fears that a proposed project is flawed?

On that scale I actually think I’m doing pretty good, staying much more on the left than the right. The advice on how to manage this behavior, or this “derailer” as the book calls them, can be summed up by that old standby: a bad decision is often better than no decision. Things move quickly in the business world, and part of the job of the CEO is to make decisions based on incomplete information and keep things moving forward.

If overly cautious is your derailer, you should be aware of this truism: Almost all CEOs who have led a major change initiative, restructuring, or transformation have made the same observation: They wished they moved faster and sooner. All the factors that led them to go slowly seem trivial when they look back on what took place. They realize they could have accomplished more if they had simply had the courage of their convictions and pushed hard for change. Most of our clients talk about how much precious time was lost because of ambiguous fears of what could happen—and that if they had to do it all over again, they would move much more quickly to do what they knew had to be done.

Habitual Distrust. Here’s how the authors define the line on this one. Do you:

1. Assess the potential downside before making a decision? OR Never take action because you always see the downside?
2. Stay alert for people whose actions are motivated by politics or self-interest? OR Constantly look for confirmation that people are acting out of self-interest or for political reasons?
3. Tolerate negative feedback and learn from it on occasion? OR Dismiss all negative info on assumption that it’s tainted by an individual’s ulterior motives?
4. Mix criticism with positive comments when giving feedback to direct reports? OR Consistently remain critical when giving feedback?
5. Anticipate obstacles that can get in your way? OR Obsess over what can go wrong?

Again, I think I stay pretty much on the left side of this one, but I can’t help but feel a little distrustful about people and their motivations after what happened to me that last year at my previous place of employment. Learning to trust people again has been a difficult road for me, but I think I clearly see its necessity, if not for my professional success, then at least for my sanity. I’m not sure how any CEO can remain in control of everything they would need to be in control of if they didn’t trust anyone.

Aloofness. Here’s the line on this one. Do you:

1. Create an environment where decisions are made objectively and politics is rarely played? OR Create a “cold” culture where expression of feeling is frowned upon?
2. Remain calm is the midst of crisis and controversy? OR Withdraw in the midst of crisis and controversy?
3. Maintain an outward reserve but can connect with people when necessary? OR Remain stoic to the point that you never show anyone your weaknesses or open yourself up to others?
4. Delegate most relationship building activities to others but are willing to forge key alliances in crucial situations? OR Become unable to work in teams or create alliances?

Here again, I think I’m staying on the left side of the line. But the right side of the line sounds a lot like me during my last year at my old job. I think this is something I have to remain especially sensitive to. Make sure I show them my human side and make sure to don’t retreat into my office when things are tough. If I can just do those two things, I think I’ll be all right.

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