September 2010 Strategic Innovation Newsletter: Power Trip

Welcome to the September 2010 edition of Strategic Innovation newsletter, a free monthly newsletter on leadership, strategy and innovation. Delivered on the first Tuesday of each month.

Back issues are archived for free downloading at www.DanielLockConsulting.com.


Tips for improving

Leaders must set the example: People only hear what they see; Ralph Waldo Emerson said, "Your actions speak so loud, I can’t hear what you’re saying.”

Some characteristics to foster:

  • Epitomize values
  • Develop your people
  • Understand your customers needs
  • Set and implement strategy: choose the right objectives
  • Celebrate victories
  • Leave time available for legitimate crisis, and unanticipated problems

Power trip.

In almost as many weeks two CEO’s have fallen on their sword and resigned (or were pushed), from large businesses.One from Australia, Mark McInnes, who resigned because of sexual harassment claims, and the other Mark Hurd, CEO of Hewlett-Packard for‘ethics violations’ (allegedly falsifying expense reports, and sexual harassment).

These were both by all accounts very effective CEO’s, both increasing shareholder value significantly in their tenure in the top job. Furthermore CEO Mark Hurd known as a straight laced no nonsense executive.

Both companies are solid businesses with tight reputations, and with being that size, especially Hewlett-Packard, have many diversity, and compliance people all over the company.

What’s more puzzling is how these people made it all the way to the top of their game and, as far as we know, never displayed this type of behaviour before. Hurd had been with the company for 35 years.

How does this happen?

An article in the Wall Street Journal last week, made this comment:

"Psychologists refer to this as the paradox of power. The very traits that helped leaders accumulate control in the first place all but disappear once they rise to power.Instead of being polite, honest and outgoing, they become impulsive,reckless and rude. In some cases, these new habits can help a leader be more decisive and single-minded, or more likely to make choices that will be profitable regardless of their popularity. One recent study found that overconfident CEOs were more likely to pursue innovation and take their companies in new technological directions. Unchecked, however, these instincts can lead to a big fall.”

Sounds like the age old problem of hubris.I’ve been guilty of it. We all have; for example, thinking I’ve done a good job and become big-headed, and then either make over confident decisions, or forget to check the details.

This is what makes people like Warren Buffet so incredible. He’s been at the top of his game for years on end and may well be the most disaffected(in terms of hubris) CEO getting around. From Management Intelligence:

…That is Buffett’s ‘only caveat’. He is clear that ‘All of you do a first-class job in running your operations with your own individual styles. We are going to keep it that way. You can talk to me about what is going on as little or as much as you wish’.

Warren Buffett adds, ‘We can afford to lose money – even a lot of money. We cannot afford to lose reputation – even a shred of reputation.’

This isn’t a new problem, its been around since Adam was a boy, and it will happen again. But it does serve to remind us how important ethics are and how they must be modeled by those at the top.

David Jones and Hewlett-Pack now have some challenging work ahead of them; to build the trust of their people. They acted swiftly to get rid of these guys, and the message clear: we don’t tolerate aberrant behaviour no matter who you are.
 


Technique of the month: Leadership

The best test of leadership is that people follow when they don’t have to.

Ask yourself if people would acknowledge you as a leader in the volunteer organisations, professional associations, charities, public events that you are involved in.

If you are, you’re probably doing well, if not, perhaps you can work more on the leadership attributes which are not apportioned to you by dint of your position on the job.