A recent article in Forbes summarised the work of Sydney Finkelstein at the Tuck school of business which looked at 50 high-flying company failures and he concluded there are 7 traits or habits that the company executives had in common. The Forbes article can be read in full here. (Thanks to Olivier Guiot for posting the article on the EMCC Linked In group).
Here are the 7 habits and my commentary on the role of challenging coaching in preventing such failures.
Habit 1: They see themselves and their companies as dominating their environment
Habit 2: They identify so completely with the company that there is no clear boundary between their personal interests and their corporation’s interests
Habit 3: They think they have all the answers
Habit 4: They ruthlessly eliminate anyone who isn’t completely behind them
Habit 5: They are consummate spokespersons, obsessed with the company image
Habit 6: They underestimate obstacles
Habit 7: They stubbornly rely on what worked for them in the past
From a challenging coaching perspective, the Seven Habits of Spectacularly Unsuccessful Executives are very interesting as there are some golden threads that connect them that are associated with challenging coaching and the FACTS model.
There clearly was a lack of open and honest feedback (F of FACTS) at an individual and orgnisational level. Reality was denied and inaccurate beliefs were allowed, even encouraged, and not challenged. We all know that some senior executives can be very dominant characters, and this may mean that providing feedback is difficult particularly if the message goes against the accepted norm. Internal employees may fear for their careers, worry about their pay rise, their bonus, promotion or even job security, and so edit what they say. This colludes with the myopia and allows failure to result.
The denial of reality and evident myopia extended to not considering the whole system (S of FACTS). It was as if the world ended at the walls of the organisation. The bigger picture, the wider context, the longer term effects were not considered. Possible future scenarios were not worked through. The connectedness of the economic and social system was not acknowledged.
With the lack of feedback coupled with not acknowledging the wider system, it appeared that the CEOs of the failed companies became arrogant and disconnected. In our book “Challenging Coaching” we retell the story of the Emperor’s New Clothes; an innocent boy free from inhibitions and the conventions of society was the only person to speak the truth that the Emperor was not wearing any clothes. In addition, in “Challenging Coaching” we talk about ‘groupthink’, a phrase coined by Irving Janis in the 1960s to describe a group that is too cohesive, too unified, too harmonious, so lacking critical evaluation or debate and a sense of artificial invulnerability is created.
The Emperor’s new clothes and groupthink were evident in these failed organisations. These can be avoided if employees and external coaches/consultants are passionately curious and question actions, and speak their truth. To do this individuals need a strong sense of personal confidence and security. Saying what they think and asking challenging questions regardless of the consequences will help ensure the long-term sustainability of the organisation. If we fear the consequences of speaking our truth, then we do not speak.
I always think, ‘if in doubt ask a question’. A question acts to increase awareness without being dogmatic. If more questions are asked of senior executives, maybe failures can be avoided.
Would the outcome have been different if there were more challenging coaches within these organisations? The scary thing is that none of these spectacular failures were foreseen or predicted. Are you working with an organisation that may fail next, if so what could you do?
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