Great leaders look to the future, while average leaders cling to the past. Clinging leaders tend to have leadership attitudes that lead to disaster.
There are five specific leadership attitudes that can undermine your company’s potential, erode employee morale and steer business toward failure. Recognizing and addressing these toxic traits is crucial for fostering a healthy productive work environment and ensuring long-term success.
1. Arrogance
Arrogance leads to hubris. Hubris leads to disaster. It is easy to become arrogant if everything is going right. Especially if everything has gone right for a long time. NASA is a perfect example of this. Mission after mission was executed flawlessly. Year after year after year. Such a flawless record caused the NASA engineers to believe they could do no wrong. Then the Challenger disaster happened. The Challenger broke apart 73 seconds after liftoff, killing all seven crew members aboard. The cause was a secondary O-ring seal. NASA was warned this part might fail years before the disaster. Yet it failed to correct the situation. Arrogance led to hubris. Hubris led to disaster. NASA believed it could do no wrong.
Whenever you believe you can do no wrong, it is time for a reality check. Ask yourself what you are missing. Assume that your assumptions are incorrect.
2. Not Watching the Numbers Closely
Maybe it is just me. I am obsessed with the financials. I check order intake every single day. I compare the backlog to the previous five years every single day. I want to know immediately if the numbers are getting soft. And if they are, I dig in to find out why. I keep a close eye on margins and product-line volumes. I do not just look at the top and bottom line. I want to know everything in between.
Remember this: the top and bottom line do not reveal everything. The bottom line is the result of how the company performed yesterday. Or last month, or last year. You want to know where the numbers are today. More importantly, you want to know where the numbers are going tomorrow, next month, or the next year.
3. Not Managing Like It Is Your Money
If you are the owner of the company, you already do this. If you are not the owner, you should manage the same way. You should ask yourself if it were your money, would you spend it this way? Too many leaders, especially in large companies, act like they are playing monopoly. They do not really care about outcomes unless they affect their year-end bonus. Lead the company like your savings account is on the line. That will make you think twice, maybe three times before you frivolously throw money around. The more you care, the more successful the company will be. Always think like an owner.
4. Assuming the Competition Is Not Planning an Attack
Companies that have strong market share positions tend to believe it will always be that way. History is replete with examples of why that is not so. Just look at Blockbuster or Blackberry, just to name two. Both had domineering market positions. Until they did not. Both assumed that it would always be that way. Neither one was planning and preparing for a competitor attack.
Remember this: somewhere, probably out of left field, someone is planning to attack your company.
I obsess over our most important product lines. I watch them like a hawk. I compare unit volumes (not revenue because that can be skewed by price increases) every single month. I check volumes against the previous 36 months. If a competitor is starting to gain traction, I know it almost immediately. Do not just rely on your sales force to catch this—although if you have a good one, they will spot a competitor testing its innovation in the field.
5. Assuming a Crisis Is Not on the Horizon
I guarantee you a crisis is looming. I do not have a clue as to what it will be. Perhaps another pandemic. Perhaps new government regulations. It certainly will be a recession the next time one comes along (as it always does, in case you forgot that). Are you prepared for it?
Every crisis has the same effect on your company. Lower sales, perhaps dramatically lower. Lower profit margins. Layoffs. In some cases, the impact is so dramatic, it closes businesses. Just look at the travel and leisure industry during the Covid pandemic. They went out of business in droves. Why? Because they were not prepared for the unthinkable.
So, prepare for the unthinkable. Simulate “What would I do if…” What would you do if sales were suddenly cut in half? What would you do if the government regulated one of your biggest product lines right out of business?
You do not need to go crazy with this simulation. But get creative. Do not just think “lay off half the workforce.” Plan for how you could mitigate the crisis in such a way as to preserve the foundation of the company. Plan for how you can mitigate the crisis so the company comes out stronger on the other side. This exercise will reveal options you will not think of in the middle of a crisis. When you are in the middle of a crisis, you will not be thinking creatively, only instinctively.
There is one thing you should always do before the next crisis. Shore up the balance sheet. Pay off whatever short and long-term debt you can. Get a revolving credit line from your bank, but do not use it. Save it for a rainy day. The time to ask the bank for this is not when you need it. The time to ask is when you do not.
It Is Never Too Late to Correct a Bad Attitude.
You don’t need to have all five of these attitudes to create a disaster. Any one of them would do the trick. Do a leadership attitude check of yourself and your team. If you find any of these five, work to correct them. Some are easier to fix than others. As an example, if you aren’t obsessed with the numbers, get obsessed and check them every single day.
