Root Causes of Executive Failure

Smart leaders make dumb decisions. This statement should come as no surprise. The questions we should ask, though, are why? when? and how? By attacking the root causes and attempting to understand the character issues, we can “peel the onion” and see what is so potently wrong when poor decisions are made and executives fail.

Do you know a leader who sees himself and the company dominating its environment? If so, they collectively are set up for a fall. The basic fallacious assumption is that success in one domain can be infinitely translated into every other domain.

Similarly, the executive who treats the business as a private empire blurs the necessary distinctions between the personality and the entity. Beware the (wo)man who uses position to attempt to carry our personal ambitions. Those who see themselves as stewards of a resource as opposed to royalty seem to avoid this trap.

Know-it-alls are another type of failure waiting to happen. Those who feel they must look polished and do not invite the input of others suffer from hubris that is unhealthy. Being decisive without considering alternative views and related outcomes is not a sign of executive skillfulness.

Slash & burn is not just a rain forest dangerous practice–it is also bad for a talent management policy. We’ve all seen mobster movies where opposing viewpoints are literally snuffed out. When an executive does this inside a business, it shows a lack of appreciation for objectivity. More than likely, decisions will be weaker and mid-course corrections will be missed.

Is the top executive an attention hog? Choosing appearance over substantive management can be a fatal character flaw. Hyper-focus with image can also mean that underlying, important issues like financial performance are not getting the attention they should.

Trying to vision-cast one’s way around a hurdle instead of approaching it head-on is almost always a huge mistake. Shrugging off a problem or pretending it is inconsequential shows immaturity and a lack of executive responsibility. It’s more than okay to admit a problem exists–in doing so, we invite others to help us resolve it and the organization benefits.

Fascination with the past as opposed to staying in the moment is a final way executives doom their organizations to failure. As we’ve heard it said, “what got you here won’t get you there!” Embracing innovation is a good habit of top leaders.

Sydney Finkelstein addresses many of these issues in greater depth in Why Executives Fail, a book published a few years ago that examines case studies of companies that once thrived and then took a nose dive. Similar to Good to Great in its treatment of lessons learned, the book highlights problems with mindsets, information management, and habits.

 

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