The Four Failures of Leaders

Times such as these expose many weaknesses. We have seen problems emerging in all sectors: housing, banking, commodities, stocks, services, pensions and manufacturing, to name a few.

When markets are bullish, leaders are often protected from scrutiny because the spoils of success divert attention. When times turn hard, however, the failures or defects of leadership are exposed for all to see. These are not usually a pretty sight. As George Bernard Shaw reminds us, “Success covers a multitude of blunders.”

There is widespread agreement that the current economic crisis has been brought about by poor leadership and greed. In a recent Globe & Mail newspaper article, Professor Henry Mintzberg, of McGill University in Montreal, suggests that much of the blame for economic failure can be tied directly to the failure of management education:

“Every decade, American business schools have been graduating more than a million MBAs, most of whom believe that, because they sat still for a couple of years, they are ready to manage anything. In fact, they have been prepared to manage nothing.”

Ouch! Professor Mintzberg goes on to point out that lack of introspection in corporate America prevents leaders from learning from their own mistakes. After almost 30 years in the management consulting business, I concur. I have witnessed four critical leadership errors that occur with alarming regularity in organizations of all sizes, market segments, and geographies.

These four failures of leaders are: lack of vision, poor communication, tolerance for organizational fragmentation and character flaws.

Lack of Vision

In dark times such as these, vision is at a premium. Without a clear personal and organizational vision, we live in a reactionary world. We grab what we can to serve our immediate needs, and are driven by agendas that are not our own. A lack of vision leaves us in the dark, unable to navigate the complexities of the world. We’re incapable of seeing the pitfalls and the opportunities emerging around us.

The need for vision has never been greater. Warren Bennis, management professor and author suggests that we are at a tipping point:

“Around the globe humanity currently faces three extraordinary threats: the threat of annihilation as a result of nuclear accident or war; the threat of a worldwide plague or ecological catastrophe; and a deepening leadership crisis in most of our institutions.”

Professor Bennis’ dark prophecy is happening right in front of our eyes. Whole industries are failing, unemployment is spiking to levels not seen since the Great Depression, and capital markets are in turmoil. Banks and financial institutions are requiring unprecedented measures to stave off bankruptcy. Governments are abandoning policies of market self-regulation and are aggressively investing in public corporations. Political strife around the globe endangers national security and the threat of terrorist attacks and global pandemic continues to challenge public health and safety.

Lack of vision has undermined our ability to foresee the calamities that we must now face and overcome. How do we overcome the destructive patterns in our leadership behaviors that sabotage us consistently?

The sheer velocity of the modern world, coupled with the tyranny of quarterly returns has led to a decline in the importance placed on vision. Prior to the market crash, “the vision thing,” a term coined by George Bush Sr., was dismissed as fluff in some management circles.

The Bull market brought with it an arrogant dismissal of this leadership imperative. Now, the Bear market is dominated by apocalyptic visions from analysts who recognize that doom and gloom spells media profile.

Vision is the product of reflection. It requires that we slow down and look at what matters most, at what’s worth doing, at what must be accomplished beyond our reactive impulses. Without reflection we become lost and disconnected from our dreams, aspirations and ethical code.

Again, Professor Henry Minztberg provides a forthright assessment of the problem and its implications for leaders:

“In this, we have America’s problem in a nutshell: the utter absence of collective introspection, whether it be the current crisis, the relationship between the Vietnam and Iraq debacles, even what might have contributed to 9/11, as well as the way it has been compensating and educating corporate “leaders.”

Without reflection, there is no way to determine whether we are being driven by our values and principles over personal gain. Leaders fail to harness insight, or learning from the past, and foresight, application of these lessons to the future. As well, leaders miss the opportunity to examine the impact of their choices in advance of making them.

If leaders had taken the time for reflection, one wonders if the auto makers would have chosen to drive to Congressional hearings, rather than fly in their private jets? Would financiers have forgone inflated bonus payouts and office renovations paid for by bail-out dollars? Would the financial system have recognized and avoided the dangers of sub-prime mortgages?

Poor Communication

“If I wanted to have to talk to people all day, I would have gone into HR,” a CEO said to me shortly before being fired by the Board. There it is in a nutshell! The second failure of leaders is poor communication.

One of the chief responsibilities of leadership is articulation. Articulation means literally “to join together.” That’s precisely what good communication achieves – a bridge from the present to the future that all stakeholders can understand and cross together.

In challenging times, people need to know that there is a clear destination that they are heading towards. Imagine being on an ocean voyage with a captain who fails to identify where the boat is headed, the length of time it will take to get there, what’s needed for success along the way, the conditions that are challenging the voyage and who also refuses to make progress reports regularly? These are perfect conditions for a mutiny.

Strategy is an ongoing conversation about what matters most. Leaders must lead that conversation to ensure that the organization’s preferred future is delivered in the most effective and efficient means possible. Leaders and teams must be in constant communication before, during and after major phases of a strategic advance towards organizational goals. Failure to do so increases the risk of confusion, conflict and other productivity breakdowns.

Poor leaders see communication as the HR department’s job. They refuse to recognize that the campaign for the future is won by those that build a bridge of common understanding, shared goals and effective teamwork. That’s the leader’s job.

Tolerance For Organizational Fragmentation

The third failure of leaders is tolerance for organizational fragmentation. Fragmentation is a state of organizational disintegration where cohesion, collaboration and communication breaks down. This leads to organizational systems failures that undermine enterprise. An organization that is allowed to disintegrate through power politics, turf wars, and unresolved internal conflict is ripe for a fall.

Many years ago, I had the experience of being asked to meet with the head of a pharmaceutical firm that I had been working with for some time. The Vice-President of Sales had engaged me to help him bring his team together. He was so pleased with the result that he suggested I meet with his boss, the President, to intervene in a nasty dynamic between the Sales and Marketing groups, one that had grown increasingly toxic over many years.

The President looked like he had come from Central Casting. He was every inch the suave, sophisticated business executive that you would expect to see in a Hollywood movie. The meeting started cordially, with the President enthusiastic about his subordinate’s idea. But shortly after the meeting started, the Vice-President was called away to take a phone call. That’s when the President turned icy.

“I don’t want you resolving any conflicts between Sales and Marketing,” he said. “I like things exactly the way they are. It makes the two groups work harder to show each other up.” With that, he laughed coldly and ended the meeting. A year later, he was gone, reviled by his staff and fired for poor performance.

Unfortunately, there is a belief that toxic organizations are the norm. This is a dangerous notion. It conditions leaders to accept abnormal organizational behavior rather than work hard to eliminate it. That’s what leaders are paid to do - develop organizational cultures where people like to come to work because they can do their best work.

Character Flaws

The economic calamity could have been prevented with a simple navigational device. It’s called a moral compass. Every leader needs one. Money, sex and power are the three opiates of success. They are constant temptations that visit smart, talented and charismatic people.

Leaders require strength of character to resist the temptations of worldly success, which seek to seduce us into believing that the rules were made for other people and that we are entitled to bend them. Of course, these transgressions usually end badly. Consider recent developments: John Edwards and Eliott Spitzer leaving politics in disgrace. Bernie Madoff awaiting trial. Conrad Black in prison. Abu Ghraib. Fannie Mae and Freddie Mac. Manny Ramirez, Roger Clemens, Jason Giambi, Mark McGuire and Barry Bonds disgraced by performance-enhancing drug scandals. Teachers and clergy charged with sexual misconduct. The list goes on.

Character is fundamental to the humane and ethical approach to conduct. It allows us to adhere to a code of ethics, values and principles even when others are unable or unwilling to abide by such standards. Greed, peer pressure, opportunism and hubris eventually lead to breakdown.

The word “character” comes to us from a Greek word, meaning “a distinctive mark.” The character we were born with and the character we derive from life’s experience guides our behavior and reveals our integrity.

Franklin Delano Roosevelt provides an important reminder of why a moral compass is a requirement for leaders, especially those in the highest offices:

“The presidency is not merely an administrative office. That's the least of it. It is more than an engineering job, efficient or inefficient. It is predominantly a place of moral leadership. All our great presidents were leaders of thought at times when certain historic ideas in the life of the nation had to be clarified. In other words, they were possessed by their visions.”

This is a good touchstone for leaders in all organizations. We must remember that we are moral leaders as well as managers and administrators. Being possessed by a vision is a far happier destiny than being incarcerated by the police.