Gautam: Over time, it’s grandiosity.
Gautam: Yeah. You live in an environment where everybody constantly tells you how great you are, and you begin to believe it.
Eric: Yeah. Even Machiavelli said a leader needs people who are going to be honest with them, because everybody’s going to kiss their ass.
Gautam: Exactly… The CEO of a major corporation, how often does he or she hear the word “no”? How often does someone challenge their basic preconceptions about the world?
We constantly hear about the need for more information, but when it comes to strategic leadership that’s often not really the problem.
Leaders have information. But as former Harvard professor Richard Tedlow explains, they often just don’t want to hear it.
I have been teaching and writing about business history for four decades, and what is striking about the dozens of companies and CEOs I have studied is the large number of them who have made mistakes that could and should have been avoided, not just with the benefit of hindsight, but on the basis of information available to decision makers right then and there, in real time. These mistakes resulted from individuals denying reality.
How is this possible? If we just had the best information, wouldn’t making the right strategic leadership choices be easy?
Denial is big. Hubris is huge. Egos expand faster than waistlines.
And if you don’t think this applies to you then this definitely applies to you.
Why do we experience denial at all? There are two theories:
In fact, sometimes denial is vital.
Knowing the statistics, what business leader would ever be an entrepreneur or attempt to turnaround a seemingly doomed company without a little denial?
Who would think they could succeed where all others failed without a little hubris?
When you start to think you have the midas touch, things get ugly in a hurry. It’s amazing how ego can get in the way.
Jeffrey Pfeffer at Stanford did a study where they told subjects (“leaders”) that feedback they’d given on an advertising campaign had been included in the final product to a greater or lesser degree.
In reality, all the final campaigns were the same. What happened?
People who thought their feedback was included liked the results twice as much, despite there being no real difference.
Supervisors in the third group, who believed that their comments influenced the final advertisement, rated identical product about twice as highly as the other supervisors who believed they had no influence, and gave similarly inflated ratings to their own ability as managers. The mere act of believing that they had engaged in supervision led them to believe that the final product was twice as wonderful (and they were twice as wonderful), even though their actions had no actual impact!
Do some people manage to avoid this trap? Yes.
The CEOs of top companies all had a similar style. Collins called them “Level 5” leaders.
What sets Level 5 leaders apart?
Those leaders who can stop focusing on me me me and measure their self-worth by the health of the company avoid the hubris trap.
Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious — but their ambition is first and foremost for the institution, not themselves.
If right now you’re saying “I think I’m a Level 5 leader”, frankly, that’s probably the best sign of hubris I can think of.
But seriously, how can you tell if a company is full of denial?
Ask yourself: Are the conversations after a meeting a lot more honest than the ones in a meeting?
One quick test: are the private conversations that follow meetings usually more frank and honest than the public discussions in the meetings themselves? The energy level is often greater after a meeting than in it, notes Babson College management professor Allan Cohen. Why? Because “everybody talks about what didn’t get said.”
That is not good.
So how do you avoid denial and (maybe) work your way to Level 5?
In Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management, Pfeffer and Sutton point out three ways to avoid the hubris trap.
1) Don’t Believe Your Own Hype
The irony of leadership is you need to speak with certainty to be taken seriously. But if you take yourself too seriously, you end up in the hubris trap.
This duality must constantly be managed. And as Machiavelli warned, beware sycophants.
You need people who will be honest with you. Shoot the messenger and, in the long term, you shoot yourself.
2) Figure Out When, And How, To Get Out Of The Way
Don’t ask, “What can I do?” Ask, “Am I needed at all right now?”
The first step that effective leaders need to take is not to ask “What can I do?” Rather they should ask, “Am I needed at all? Will my actions, or even my presence, do more harm than good?” The best leaders know when and how to get out of the way.
This is summed up by a favorite quote of mine from Steven J. Ross: “Get the best people for the job and LET THEM DO IT.”
3) Build Systems And Processes
Leaders can only be hands-on when teams are small. Past that, their immediate effects are limited.
This is why good leaders build systems that make sure their way of doing things can be made clear even when they can’t be present.
Denial, ego and hubris are all parts of human nature.
They are like gravity. We don’t defeat them. To move forward we must actively resist them every day.
You will therefore never defeat denial, but you had better battle it. As James Baldwin once wrote, “Not everything that is faced can be changed, but nothing can be changed until it is faced.”
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