Here’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.
CEO Wolfgang Schmitt of Rubbermaid was fond of demonstrating his ability to sort out difficult issues in a flash. A former colleague remembers that under Mr. Schmitt,” the joke went, ‘Wolf knows everything about everything.’ In one discussion, where we were talking about a particularly complex acquisition we made in Europe, Wolf, without hearing different points of view, just said, ‘Well, this is what we are going to do.’”
Leaders who need to have all the answers shut out other points of view. When your company or organization is run by someone like this, you’d better hope the answers he comes up with are going to be the right ones. At Rubbermaid they weren’t. The company went from being Fortune’s most admired company in America in 1993 to being acquired by the conglomerate Newell a few years later.
Warning sign for #3: A leader without followers
Habit #4: They ruthlessly eliminate anyone who isn’t completely behind them
CEOs 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. Sometimes CEOs who seek to stifle dissent only drive it underground. Once this happens, the entire organization falters.
At Mattel, Jill Barad removed her senior lieutenants if she thought they harboured serious reservations about the way that she was running things. Mr. Schmitt created such a threatening atmosphere at Rubbermaid that firings were often unnecessary. When new executives realized that they’d get no support from the CEO, many of them left almost as fast as they’d come on board. Eventually, these CEOs had everyone on their staff completely behind them. But where they were headed was toward disaster. And no one was left to warn them.
Warning sign for #4: Executive departures
Habit #5: They are consummate spokespersons, obsessed with the company image
You know these CEOs: high-profile executives who are 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.
Behind these media darlings is a simple fact of executive life: CEOs don’t achieve a high level of media attention without devoting themselves assiduously to public relations. When CEOs are obsessed with their image, they have little time for operational details. Tyco’s Dennis Kozlowski sometimes intervened in remarkably minor matters, but left most of the company’s day-to-day operations unsupervised.
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. The creative accounting that was apparently practised by such executives as Enron’s Jeffrey Skilling or Tyco’s Mr. Kozlowski is as much or more an attempt to promote the company’s image as it is to deceive the public: In their eyes, everything that the company does is public relations.
Warning sign of #5: Blatant attention-seeking
Habit #6: They underestimate obstacles