The Seven Habits of Spectacularly Unsuccessful People
Tuck Executive Education
The Seven Habits of Spectacularly Unsuccessful People
1. They see themselves and their companies as dominating their environments, not simply responding to developments in those environments.
2. They identify so completely with the company that there is no clear boundary between their personal interests and corporate interests.
3. They seem to have all the answers, often dazzling people with the speed and decisiveness with which they can deal with challenging issues.
4. They make sure everyone is 100% behind them, ruthlessly eliminating anyone who might undermine their efforts.
5. They are consummate company spokespersons, often devoting the largest portion of their efforts to managing and developing the company image.
6. They treat intimidatingly difficult obstacles as temporary impediments to be removed or overcome.
7. They never hesitate to return to the strategies and tactics that made them and their companies successful in the first place.
Seven Habits of Spectacularly Unsuccessful People: The Personal Qualities of Leaders Who Preside Over Major Business Failures
As drawn from the book: Why Smart Executives Fail and What You Can Learn from Their Mistakes
About the Author: Sydney Finkelstein is the Steven Roth Professor of Management at Dartmouth's Tuck School of Business. He is widely known as one of the top authorities on strategy and leadership. Professor Finkelstein teaches executives and MBAs at the Tuck School of Business, and has helped to propel Tuck to the top of recent business school ratings-including the most recent Wall Street Journal and Forbes rankings.
To be spectacularly unsuccessful requires some very special personal qualities. We're talking about people whose failures were breathtakingly gigantic, who have taken huge, world-renowned business operations and made them almost worthless. They have caused thousands of people to lose their jobs and thousands of investors to lose their investments. They've managed to destroy hundreds of millions or even billions of dollars of value. Their destructive effect is so beyond the range of ordinary human beings that it's on a scale normally associated only with earthquakes and hurricanes.
The personal qualities that make this awesome scale of destruction possible are all the more fascinating because they are regularly found in conjunction with truly admirable qualities. After all, hardly anyone gets a chance to destroy so much value without also demonstrating a potential to create it. Most of the great destroyers of value are people of unusual intelligence and remarkable talent. They are almost always capable of being irresistibly charming, exercising great personal magnetism, and inspiring others. Their faces have typically appeared on the covers of Forbes, Fortune, Business Week, and other business publications.
Yet when it comes to the crunch, these people fail monumentally. The list of leaders who have failed spectacularly is not a list of people who weren't up for the job. It's a list of people who had a special gift for taking what could have been a modest failure and turning it into a gigantic one.
How do they do it? What's the secret of their destructiveness? Remarkably enough, it's possible to identify seven habits that characterize spectacularly unsuccessful people. Nearly all of the leaders who preside over major business failures exhibit five or six of these habits. Many of them exhibit all seven. Even more remarkable, each of these habits represents a quality that is widely admired in today's business world. As a society, we don't just tolerate the qualities that make leaders spectacularly unsuccessful; we encourage them.
Let's look, then, at The Seven Habits of Spectacularly Unsuccessful People. Although these habits are most destructive when it's the CEO who exhibits them, other managers with these habits can do terrible harm as well. Learning to recognize these habits is the first step toward finding ways to compensate for them.
Habit #1: They see themselves and their companies as dominating their environments.
"Wait a minute," you might say. "Where's the harm in that? Don't we want leaders who are ambitious and proactive? Shouldn't a CEO seize the initiative and create business opportunities, not just react to developments in his or her industry? Shouldn't the company try to dominate its business environment, shaping the future of its markets as well as setting the pace within them?"
The answer to all these questions is, of course, "yes." But there's a catch. Successful leaders are proactive because they know they don't dominate their environment. They know that no matter how successful they have been in the past, they are always at the mercy of changing circumstances. They need to generate a constant stream of new initiatives because they can't make things happen at will. To be successful for more than a fleeting moment, every business venture needs to be one that customers and suppliers interact with voluntarily. This means that no matter how successful the company, its overall business plan will need to be continually re-adjusted and renegotiated.
Leaders who see themselves and their companies as dominating their environments forget these things. They vastly overestimate the extent to which they are controlling events and vastly underestimate the role of chance and circumstance in their success. They think they can dictate terms to those around them. They think they're successful and that their company is successful because they made it happen.
There are some deep psychological reasons why many leaders begin thinking this way, the most important of which is the human need to feel responsible for what happens to us. We need to feel we can influence our fate when things are going wrong, and that we deserve our success when things go right. Yet CEOs are constantly faced with threats that are in some respects beyond their control, and they are successful in some respects beyond what they deserve. Under these circumstances, many business leaders need to believe they are dominating their environments in order to cope with the stresses of their jobs.
The Illusion of Personal Preeminence
Many CEOs believe that he or she is personally able to control the things that will determine the company's success or failure, a tendency labeled the Illusion of Personal Preeminence. Rather than scrambling to keep track of changing conditions, the CEOs who succumb to this illusion believe they can create the conditions under which they and their company will operate. What's more, they believe they can do it by their own personal genius and force of personality. Like certain film directors, they see themselves as the auteurs of their companies and sometimes even as the auteurs of their industry. They imagine that their job is to realize their creative vision, imposing their will on unruly collaborators and inert raw materials. As far as they're concerned, everyone else in the company is there to carry out their personal conception of what the company should be.
When CEOs actually do possess a measure of genius, they are especially prone to slide into this illusion of personal preeminence. An Wang, for example, knew he was a technical genius. This led him to believe he could master business situations by employing the same intelligence and diligence that had allowed him to master technical problems. Mossimo Giannulli had a touch of genius when it came to expressing popular trends in clothing designs. This led him to believe that he was also a business genius, one who had little need for qualified and experienced managers. In the opinion of Merrill Lynch analyst Brenda Gall, Mossimo "bought into his own image too much" and believed that he could do anything. It wasn't until his rapid growth plan fell victim to cost overruns, late shipments to major customers, and inadequate systems - stripping his company's stock price by 90% - that he finally stepped down.
Executives with a degree of business genius are just as susceptible to this illusion as those with a more technical kind of genius. Samsung CEO Kun-Hee Lee was so extraordinarily successful with semiconductors and electronics that he thought he could repeat this success with automobiles. Webvan CEO George Shaheen had been so successful in his earlier job as CEO of Andersen Consulting that he was completely oblivious to the fact that he wasn't communicating effectively with his managers in Webvan. "He operated 20,000 feet above everyone else," explained a former Webvan executive. "I liked him," commented another Webvan manager, "but he was the wrong man, particularly for a public company."
Behavior That's a Little Too Preeminent
Leaders who suffer from the illusion of personal preeminence often reveal this in the way they treat the people around them. To these leaders, the people they interact with are instruments to be used, materials to be molded, or audiences for the leader's performances. When business leaders think this way, they often use intimidating or excessive behavior to dominate the people who surround them. In most cases, it's not unconscious or unintentional. They want to be "larger than life," "legendary," "awe-inspiring." The subtlest practitioners of this intimidating personal style are those who achieve it while speaking softly and making small gestures. They revel in the contrast between the little things they do and the huge effects they can get by doing them. But there is no shortage of leaders who prefer the other alternative - speaking loudly and carrying a big stick. Whichever style they chose, leaders who believe in their personal preeminence can achieve a remarkable level of intimidation.
As co-founder and CEO, Bob Levine of Cabletron was famous for his flamboyant, confrontational style. He was also famous for his bodybuilding regimen, right-wing politics, and survivalist mentality. He purchased an abandoned grocery store near the company's offices so he could lift weights during his lunch hour. His lighter side is illustrated by the fact that he bought a working army tank to keep in his yard. Legend has it he once used it to scare a pizza deliveryman. As a salesman, he was known for aggressive motivational stunts. At one Cabletron sales meeting, he arrived brandishing a knife to teach employees about killing the competition. At another, he appeared dressed in combat fatigues and swinging a machete.
Few CEOs could match Bob Levine when it came to colorful antics, but many CEOs whose companies suffered major breakdowns could match him when it came to sheer intimidation. Roger Smith of GM had such a ferocious disposition that the EDS executives who witnessed one of his outbursts say he turned red, shouted, pounded on the table, and literally foamed at the mouth. Jerry Sanders of Advanced Micro Devices (AMD) intimidated those around him by his temper to such an extent that they were afraid to tell him any news they thought might upset him. Enron leaders Jeffrey Skilling and Andrew Fastow were known for their toughness and arrogance. Sir Richard Greenbury was feared for years by his underlings at Marks & Spencer. Rubbermaid's Wolfgang Schmitt could be "a very engaging and personable guy," but he adopted a personal style at work that was described as "very blunt and intimating in dealing with people." Inside the company Schmitt "was known as the 'U-boat Commander' because he had a very tough, take no prisoners style about him." These aren't people who occasionally get angry; they are people who have made displays of anger and other intimidating behavior part of their basic management style.
The Illusion of Corporate Preeminence
Executives who succumb to an illusion of personal preeminence often succumb to an illusion of corporate preeminence too. This is a belief on the part of the CEO that his or her company is absolutely central to suppliers and customers alike. Rather than looking to satisfy customer needs, the CEOs who believe they run "preeminent companies" often act as though their customers are the lucky ones, fortunate to be able to have their needs satisfied so effectively. It's almost as if the entire customer relationship is turned on its head so that it is the customers' job to please the company by showing themselves worthy of the company's products.
Leaders who suffer from an illusion of corporate preeminence often believe that the superiority of their company's product makes it invulnerable. An Wang, for example, believed that Wang would eventually dominate its markets because its products were simply so much better than any others. Bob Levine believed that rivals like Cisco were producing such inferior products he had little need to take them seriously. If the customers didn't immediately see this, he thought it was the job of Cabletron's sales force to make them see it. CEOs like these become so proud of their company's product, they believe its sheer excellence will give them the latitude to do anything they please. After all, they tell themselves, if you make the best product in the world, customers must either come to you or settle for something inferior.
Even when competitors who offer better designs or better prices challenge the company's products, executives who suffer from an illusion of corporate preeminence will continue to believe that their company is secure simply because of its status in the business world. Kun-Hee Lee, for example, believed that Samsung's corporate preeminence more-or-less guaranteed its success. "We, at Samsung, used to believe that we could do better than anyone else," one of Samsung's managers later confessed. "Samsung believed that it could not fail." Wolfgang Schmitt of Rubbermaid has said, "Our success had it's own form of seductiveness. It made us pretty self satisfied and not inclined to ask the tough questions." At Schwinn, managers boasted, "We don't have competition. We're Schwinn." Read more.
