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Is Executive Hubris Ruining Companies?
Crash McBang wonders: "In a recent IndustryWeek article, Mathew Hayward, assistant professor at the University of Colorado, does a Q&A on his new book, "Ego Check: Why Executive Hubris Is Wrecking Companies And Careers And How To Avoid The Trap", which shows how executives' inflated egos can impact what they choose to produce, the manufacturing decisions they make and how they market their products. What failures (colossal or otherwise) have you been involved in that could be attributed to Executive Hubris?"
I produced a better product than he was trying to force me to accept in the original timeframe. Still wasn't enough for him, the sabotoge continued. Rather than sit there and watch my my career languish I chose to get the hell out of Dodge to far greener pastures.
When I left he was tasked with producing a product which was at least as good as mine and couldn't even come close. The sr exec who litterally could not be fire resigned within months of my departure.
If you are reading this, fuck you.
It's sad to watch the ruin and downfall of a perfectly good company. The one I worked for back in 2000 tore itself apart due to (how can I put it politely)...a mutual circle of self-gratification on the part of its senior management. They were totally blinded to the industry trends at that time by their own egos, and they reacted to the external threats and forces in a way I can only characterize as sick. Their loud self-praises utterly drowned out the realities of what was going on, and it was scary to watch. Even the annual planning meeting, attended by a cast of thousands, degenerated in fall of 2000 into a venue for them to strut onstage to ear-splitting music to the wild applause of their captive audience of hired help. Folks were a bit put off by that speech session, and the response was to forbid us from leaving the hotel on pain of being fired. That ensured that we'd be captive for the evening sessions.
By spring of 2001 these same VP's were screaming at us during massive company-wide phone conferences; the gist was that we, the people, were responsible for the alarming nosedive the company was taking. The layoffs began shortly thereafter, and by August I had taken my rather-nice severance and moved on, having decided to work for myself. (I still do.) By December of that year it was mostly all over, though the company limps on today in a pitifully truncated form.
I remember thinking a lot in those days about Nero fiddling while Rome burned, but the proverb I remember considering most was, "As a dog returneth to his vomit, so a fool repeats his folly."
"Here's what's happening. You're starting to drive like your Dad..." - Red Green
British slashdotters will have heard of the classic example: GEC, which changed its name to Marconi.
The management decided that they did not want to be running a boring business (making everything from lifts to generators), however profitable it was. So they, during the dotcom boom, they decided to refocus on telecoms equipment.
So they spent the multi billion pound cash pile they had on buying telecoms equipment manufacturers.
This was not enough, so they sold off all those boring businesses and spent that on more acquisitions.
They then borrowed heavilly to make even more acquisitions.
Come the bust, lenders wanted their money back. Needless to pay, all those expensive acquisitions were not making enough money to pay them with. Creditors eventually agreed to swap the debt for something like 99% of the equity.
A little fragment of the company is still around, calling itself Telent. All that is left of what was once one of the biggest companies in Britain.
I may be wrong in attributing it to hubris, it could be just stupidity, but given the nature of the businesses sold an bought it certainly looks like the main motive was not being boring.
I see people in management make regular stupid decisions, usually based on their views without listening to more qualified expertise.
I don't know what happened internal to Sony, but it seemed like hubris in the theory that 'PS1 and PS2 dominated, therefore we can do whatever the hell with PS3 we want and people will just automatically buy it, let's make it really expensive and try to have it float our HD optical media format.'
In more personal hubris where I work, I see very very good technical input on the qualities and shortcomings of various products ignored by execs. Going out the door a particular software was needed, and the technical team evaluated the solution liked by management (third party software that lacked functionality and would be very costly) or what another division within the company had developed, which was much more comprehensive and advanced, and, we thought, business execs would like that we could honestly recommend the cheaper way to go that preserves the most profit for the company and make things happy. However, the third party had salespeople, took execs out to dinner and sweet talked them to go out with the shitty product. It seems that personally winning over an executive frequently trumps concrete information on a product.
Also, they have been trying *so* hard to move into less technical stuff. They want to do business consulting so they just get to focus on the bullshittery of executive and management without dealing with anything non-bullshittery. It's probably orgasmically exciting to them to think about the prospect of many people *paying* to be bossed around by them, and of course logical, they are *such* great leaders people *should* pay for the privilege. Evidently, despite great efforts to do so, there isn't much uptake on other companies who think they are too stupid to do basic management, imagine that. In the face of a successful segment of the business and the flopping business consulting, they repeatedly screwed over the people doing real work to try to get that miserable stuff up. I haven't heard much lately about it, so I'm getting the impression that someone got the message that the business consulting market is either not that big, or that no one is interesting in paying to listen to these executives say how they think a business should be run.
Now execs/managers aren't the only ones to suffer from hubris. Probably everyone in their role can thoroughly screw up due to hubris, but it seems that executives are less likely to be shitcanned for stupid stuff, and up the chain the 'punishment' for fucking up to the point of being ousted means a multi-million dollar payoff. That combined with the natural implications of being a leader within a company means a single exec's hubris can do so much more damage with very little accountability, and that makes it all the worse.
XML is like violence. If it doesn't solve the problem, use more.
Having had direct experience with both the military and civilian flavours of this, I can say that the private sector has the military utterly cold on this.
As bad as a commander on a rampage can be - and don't get me wrong, I've seen some doozies - nothing can top the reality distortion field that accompanies having a great deal of cash and no oversight.
Everybody in the military reports to *someone*, and while it may take a little while, eventually those chickens will come home to roost. Those limits simply don't apply to private enterprise, especially to small-midsize companies where the owner/president is effectively God and can do whatever the hell he wants.
DG
Want to learn about race cars? Read my Book
Aristotle defined hubris :
to cause shame to the victim
not in order that anything may happen to you, nor because anything has
happened to you, but merely for your own gratification. [snip]
men think that by ill-treating others they make their own
superiority the greater
Hubris can destroy nations
why not companies ?
It seems that the arrogant jerks are the ones who want to be CEO, from my experience.
I work for a small startup that finally had a really profitable year, and made $600K profit in '05-'06 off of our main customer. There were only about 8 people in the company, so that was pretty good -- we had a lawyer, two programmers (including me) and some salespeople.
Sales were really good, and the company decided it needed some "leadership" - so a CEO was hired -- this guy was a retired CEO of a call center. (we were a web training startup, so this was a big WTF for me, but I had no say in it)
This CEO then basically decides to spend the whole year keeping everyone tied up in meetings. At the first all-company meeting (we were all telecommuting) a co-worker said "this looks really bad -- there are monre chiefs in this company than indians" -- out of 8 people, 5 were executives and 4 were regular workers.
Our product is web training based on PHP and Mysql, so he had the lead programmer (the co-founder) driving a 100 miles to meet with "consultants" who claimed that our product was flawed because we did not have a "transactional" database, so they wanted to move us to a transactional database like MS SQL-SERVER, and "offered" to re-write the application in ASP for us since it had to be run on Windows now. They were publicly shown as idiots because after going on about how our database was not transactional, when we asked them why we needed a transactional database, they answered "I don't know".
This CEO irritated our main customer so much that we lost them (the lawyer co-founder got arrogant and helped with this too), our new team of 6 salespeople were all trying to cold-call, and so we had basically no sales for last year. By December our company was weeks away from collapse. He had spent the whole year tying the company up in endless meetings and turning in endless reports. This CEO was such a control freak the sales director couldn't meet with the salespeople without the CEO being there.
This guy came across all warm in the beginning, and he had the whole "sincere" act down, but pretty soon you could tell that he didn't think much of those he thought were "little" people. The company still had a possible future, but the CEO was focused on trying to sell the company off for the amount of the revenues still coming to the company, putting everyone else out of a job but guaranteeing him a bonus of $10,000. This probably would have allowed him to tell himself and everyone else he was "successful" in selling the company but he really did his best to drive it into the ground.
This guy even did things like buying 10 laptops from one of his buddies for $3500 each but only putting 5 into use and not telling anyone about the extra 5 laptops.
Now that we don't have a CEO anymore, we are all just doing our jobs and getting things done again. The politics and internal tension of the company which had risen to a fever pitch basically went away with the CEO as well. we are CEO-free, our main customer likely is coming back, sales are up since the 2 salespeople that are left can do their job without people looking over their shoulders all the time about "call numbers" -- and things are looking good!