Viewpoint -- Six Common Beliefs Of Executives Who Fail

The year 2002 will go down in history as a banner year for tarnished corporate reputations. Enron, Tyco, WorldCom -- names that were once associated with outstanding achievement -- are now forever linked to corporate failure. Unfortunately, these companies weren't the first -- and won't be the last -- to suffer from the mistakes that their corporate leaders made. Over the years, many executives have adopted beliefs that have led to their own, as well as their companies', demises. As an executive advisor to many top leaders of Fortune 500 companies, I have witnessed my share of these travesties. With an eye toward learning from past mistakes, here are six of the most common "performance beliefs" that contribute to executive failure. Belief No. 1: My Press Clippings Are True. Ever notice how many failed executives use "I" more than "we"? How they have more answers than questions? These people are very busy, very important and often very difficult to get to know on a personal level. In the kindest of terms, they are focused; in reality, they are often simply arrogant and show little respect for their superiors, peers, subordinates -- even their customers. One news report about Enron revealed a sarcastic motto that some top Enron executives allegedly espoused: "When Enron says it's going to 'rip your face off,' it will 'rip your face off.'" To me, that says it all. Belief No. 2: The Company Is Mine. Many executives who fail believe that the corporate limousine, the corporate jet, the corporate expense account, and all of the company's employees are theirs. They regard the company as their personal fiefdom and do not view shareholders or boards as their boss. Tyco International, with its notorious $6,000 shower curtain, is a classic example. Executives like these often have a history of building the company, of reeling in the No. 1 client or doing something in the past that led them to believe that they now own the company. They feel it is their responsibility to make or break the company and that they're only accountable to themselves. They stay in office too long and regularly terminate potential successors. Belief No. 3: I Come First. Failing executives tend to deal in the short term and frequently discuss issues that relate to bonuses, stock options and other personal incentives. In addition, they usually have an exceptional spread between their bonus and salary compared to employees' incomes. As in the case of WorldCom, these leaders almost always exhibit an attitude that, "I'll get mine before anyone gets theirs" and seem to feel they deserve more than they are paid. They epitomize self-indulgence and self-aggrandizement at its worst. Belief No. 4: Don't Distract Me With The Facts. How many times have you heard a superior say, "Don't bring me the problem, just bring me the solution"? I hope it hasn't been too often. Executives like this don't want to know about problems or challenges to their organizations. Their response to negative news is to kill the messenger; their response to challenges is, "Tell me it's fixed, don't tell me it's broken." Usually these individuals are isolated and, therefore, vulnerable to believing that things are going well, until the problem explodes. They usually look for others to blame. Belief No. 5: Rules Are for Everyone Else. It's hard to believe, but some people at the top think that they are above the law. They don't adhere to their own corporate policies. In essence, they don't realize their ego is writing checks that their actual performance can't cash. When their companies get into difficult situations, they ask questions like, "How can we get around this issue? How can we eliminate that problem with no consequences? How can we make it appear it's not that serious?" Belief No. 6: The "Board" Is Against Me. Whether they perceive themselves to be the victim of board "cronyism" or whether they just don't respect their directors, too many failing executives find themselves in an adversarial relationship with their governing body. As a result, they don't take problems to their board. Instead, they try to "out-think" their directors and even keep them in the dark about what's really going on. Who suffers? Customers, employees and shareholders. Obviously, the antidote for executive failure is to adopt the opposite of these behaviors, and that means developing greater self-awareness, self-regulation and respect for others. Psychologists call these factors "emotional intelligence." Many believe that it is higher emotional intelligence -- and not greater technical skill -- that separates effective corporate leaders from the ineffective. When the dust settles from the most recent corporate failures that we have witnessed, perhaps boards that govern companies should make it a point to find out what causes executives to fail. William J. Morin is chairman and CEO of WJM Associates Inc., an executive and organizational development firm in New York. He can be reached at [email protected].