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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?"
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!