COVER STORY Senior Executives Behavioral Dynamics

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Successful senior executives have to be aware that their success, unless monitored and carefully managed, may possibly lead to subsequent corporate failure. Corporate success can result in dysfunctional levels of self-belief, grandiosity, arrogance
  10 HRM Review  August 2010   COVER STORY Senior Executives Behavioral Dynamics Successful senior executives have to be aware that theirsuccess, unless monitored and carefully managed, maypossibly lead to subsequent corporate failure. Corporatesuccess can result in dysfunctional levels of self-belief,grandiosity, arrogance and narcissism leading tocounterproductive workplace behavior. This article suggestscountermeasures and five reasons to be careful to helpguard against senior executive self-destruction andpotential corporate malaise. Dr. Michael Walton Director of ‘People in Organisations Ltd.’ and Visiting Fellow in the Centrefor Leadership Studies,The University of Exeter Business School, UK.The author can be reached,  © 2010 IUP. All Rights Reserved.   11  August 2010  HRM Review  SENIOR EXECUTIVES: BEHAVIORAL DYNAMICS S enior executives are at riskand could even be consideredas an endangered speciesgiven the high attrition ratereported in the media worldwide.This article highlights some of thedangers awaiting unsuspectingsenior executives and proposes five‘reasons to be careful’ whichexecutives can use to defend againstfailure and reduce derailment risksand to help keep their organizationssafe.But why do senior executivesneed to be aware of protection inthe first place? In the beginning, itmay appear a rather absurd assertionbecause they are positioned at thetop of the organization and occupya position of privilege. Secondly,they strongly influence the criteriaby which their success will beassessed, and thirdly, they are ableto mobilize people, information andresources to their own advantage.Given such influence why is it thenthat so many fail to live up toexpectations, just go wrong, tripover and self-sabotage theirhitherto very successful careers?Instances suggest, perhaps as thepower and greed of the celebrityexecutives grew, their capacity toact with humanity, requisitehumility and responsibilitydiminished.Root causes of role instability atthe top include political infighting,fights for the limelight, egomania,megalomania, turf-tussles,criminality and corporate fraud,incompetent auditing and ineptregulatory supervision. Physical andmental illness and as well as thetoxic dynamics of envy, greed anddysfunctional narcissism are also afactor. Sometimes, problems arisebecause leaders just try too hard orbecome fixated on past workingpractices which are no longerappropriate to meet thecontemporary demands. ViktorFrankl says about paradoxicalintention, “Our good intentionsactually become the cause of ourfailure.”To reach the upper echelons of the corporate world, seniorexecutives must have endured thetrenches of corporate life, ledinitiatives and forays againstbusiness rivals (‘internal’ as well as‘external’), and successfully playedorganizational politics. Yet again,why do senior executives of allpeople need protection, and, if so,protection from what or fromwhom?Paradoxically, it is preciselybecause of such competencies—combined with a track record of success in their functionalresponsibilities—that those insenior posts do find themselves atrisk of failing and suffering fromcareer burnout. The contemporaryoveremphasis on continuous‘winning’ and delivering quarter-on-quarter business success—doesn’t help and can lead to asituation where the boss just has tobe ‘right’ on everything and whereto show doubt, ask for advice orhesitate becomes personallyintolerable and organizationallyunacceptable. In turn, this canfoster levels of arrogance whichthreaten personal relationships aswell as well-judged decision makingin the drive for continuous success. A Problem with Winning One significant drawback to theemphasis on conspicuousachievement is that sound butindemonstrable, ethical andmeritorious achievement may beundervalued or insufficientlyrecognized. Secondly, those who areidolized for outstanding and heroicsuccess may succumb to the rhetoricheaped upon them and begin tobelieve that they are indeed the‘Masters of the Universe’. These twodynamics in combination can leadto a potentially disastrous conditionin which risky, grandiose,manipulative, self-serving andnarcissistic business practices arereadily sanctioned and become thenorm and also the value accordedto less fundamental but corebusiness processes is significantlydiminished.  12 HRM Review  August 2010 COVER STORY Such dynamics can result in anorganization becoming increasinglyvulnerable to risky decision makingfrom its senior executives, flawedstrategic undertakings, substandardleadership and damage to the brandand the company’s reputation.In their well-documented bookon corporate failures, Hamilton andMicklethwait (2006) note how“Greed, overweening ambition anda desire for power will continue todrive many, in and out of thecorporate world. Companies willstill choose to follow poor strategies,make inappropriate acquisitionsand overreach themselves on theproject too far” (:183).Finkelstein reports from hiswork how many executives “… werenot only arrogant they were proudof it” (2003:169). ‘Hubris’, anexaggerated self-worth and sense of invincibility which can so easilytake over and shape the behavior of those at the top, is a furtherdimension that can often presagefailure at the top (Hayward andHambrick, 1997; Owen, 2007).Parnell et al.  describe such featuresas “A perception of superiorityinducing a reluctance to learn fromthe successes and failures of othersand inviting a frighteningly rapidfall from grace” (2005). Anunfortunate fact of business life ishow success can all too easily blindexecutives to the need to examinewhat is actually going on aroundthem rather than assuming that thecurrent level of success willcontinue unabated. Past success—no matter how impressive—is noguarantee for its future continuity.In this regard, Collins (2009) chartsfive stages of a corporation’s decline  from  Stage 1: ‘Hubris born of Success’ to  Stage 5: ‘Capitulation toIrrelevance or Death’ and amplyillustrates just how such aprogression can —but notnecessarily will —proceed. It is abook well-worth reviewing andapplying to your business as is ‘TheIcarus Paradox’ by Miller (1990).These references amply illustratethe tenuous nature of seniorexecutive positions.So to summarize the verycapabilities and competencieswhich have resulted in an executivesucceeding in the corporate worldmay well also, unless managed withcare, ultimately result in theirsubsequent failure and fall fromgrace.It is thus from (a) an exaggeratedsense of pride and arrogance and (b)from seeking to meet the unrealisticand sycophantic expectations of followers et al.  that executives needto be protected as shown in theFigure. Senior executives can reducesuch likelihoods taking hold,however, by examining the five‘Reasons to be Careful’ suggested inthis article and by considering thecountermeasures proposed. Respectful or Disdainful Leadership? Warner Burke (2004), in quotingHogan et al., notes that “No matterwhere or when the survey wasconducted and no matter whatoccupational group was studied,60 to 70% of employees state thatthe worst or most stressful aspect of their job is their immediatesupervisor.” More recent researchfrom the Chartered Institute of Personnel and Development (CIPD,2009) in the UK suggests that lessthan two out of five think seniormanagement treat their employeeswith respect. This research wasbased on a survey of 2,000 employeesand found that organizationalperformance was undermined by alack of trust in senior management.The twice yearly ‘Workers Index’conducted by Ipsos MORI (2006)reports a significant proportion of workers doubt senior management’sleadership abilities and sense of strategic direction. The WorkFoundation of UK notes a leadershipgap at the top of Britishorganizations whereby seniormanagers appear to be failing toconvince the people they lead. Suchchallenging findings would nodoubt be challenged by the majorityof senior executives who—onewould expect—would say that theyare doing precisely what is necessaryand that they were following a Figure : Dynamics Underpinning Potential Dysfunctional Executive Behavior Exaggerated and Unjustified external ‘applause’ and levels of Self-belief   these can combine to generate a heightened potentialfor risky, self-serving and narcissistic decision making   13  August 2010  HRM Review  sound business plan and strategy.However, it is precisely suchdifferences, or dissonance, inperceptions which—unlessregularly checked and examined—can impair organizationalperformance and increase thepossibility of executive failure.Encouraging a more open-minded and reflective stance fromsenior executives can however bedifficult to achieve as the preferredmodel of business executives seemto remain trapped—as judged by themedia, business press andtraditional Business Schoolteachings—in the somewhatidealized mould of the charismatic,heroic and transformational role of the leader. There is some room forhope however as the past decade hasseen the topic of toxic anddysfunctional leadership—anddiscussion of the many ways inwhich an executive’s behaviordamages the organization—elevated to become a topic forgeneral discussion rather than oneto be avoided or suppressed.Consequently, there is more,although still too little recognitionof the latent potential fordisreputable and disabling seniorexecutive behavior and morediscussion on how to guard againstsuch behavior crippling thebusiness.Senior executives are high statusindividuals and they can beexpected to maximize their benefitsand protect their status, position,image and reputation againstthreat. Such a need to protect whatthey have achieved—and perhapsaccumulate more advantages—cantrigger dysfunctional and toxicbehavior. This is not to suggest thatsenior executives will necessarily bebad, corrupt, 100% self-serving,toxic, inevitably exploitative,fraudulent or behave in other wayswhich are detrimental to theorganization or its employees.Though I am suggesting that onceinstitutional power is vested in anindividual, the potential and theopportunity for errant behavior issignificantly increased and with thisalso comes a heightened potentialfor future derailment.As ( Kahn and Langlieb, 2003)note “All business is personal.Whether on the assembly line or inthe corporate boardroom, theworkplace is made up of people withcomplex combinations of personality traits. Success in theworkplace requires technicalabilities as well as professionalpresence, but it is most profoundlydetermined by personality. … Thecommon expression ‘It’s nothingpersonal, just business’, isinteresting just because it attemptsto deny the significant contributionof personality to the workplace”(:458).From my experiences much of the leadership toxicity in businesslife is unleashed through the anxietyof perceived threats to personalstatus, reputation, image andposition. It should be rememberedthat organizations are intenselyemotionally-charged places whichcan transform considerate,easygoing people into driven,uncaring demonic bosses. This isespecially so if an executive is placedunder extreme pressure to performand ‘show what they are worth’(Lubit, 2004; Walton, 2007;Zaccaro, 2001 ) !It seems to me that it is vitaltherefore for all senior executivesto remember that, whatever peoplemay say to the contrary, “Allbusiness is  personal” and that whenany of us feel challenged orthreatened we will react and may nolonger choose to behave in thesocially polite and professionalmanner in which we have beenschooled. In such a state, and indeedwhen executives feel they areomnipotent and can do whateverthey desire, that person’s tenure ontheir position is weakened.Organizations change peoplejust as much as people changeorganizations and this is mostapparent when tracking the careerof hitherto successful executiveswho have derailed throughoverconfident (arrogant,narcissistic, self-serving) or under-confident (obsessive compulsive,passive-resistant, ‘absent’,paranoid) behavior at work. Conspiratorial Failures But however convenient it may beto lay the blame for organizationalfailings on those in positions of power, dysfunctional and toxicleadership behavior is not a productsolely of any individual leader’sbehavior. Even the most disruptive,rampant and destructive leader willusually need some help in bringingthe place down! Examples of factorswhich will conspire, promote andenable errant, disruptive andcriminal behavior to emerge includecomplicit follower behavior,pressure from greedy stakeholders,inadequate business processes,seductive reward incentives as wellas individual character flaws—andin some cases criminality—fromthose at the top (Babiak and Hare,2006). So what can we do to lessenthe likelihood of senior executives SENIOR EXECUTIVES: BEHAVIORAL DYNAMICS  14 HRM Review  August 2010 failing, and wreaking havoc? Whatsort of protection might be needed?How might an endangered speciessuch as CEOs protect themselves?CEOs and senior executives canhowever lessen their vulnerabilityif, through their behavior, theyemphasize the following:  The realistic  rather than the esoteric  The practical  rather more thanthe abstract  The needed  more than the whimsical  The fair rather than the exploitable  The communal  more than the self-serving   The humble  rather than the arrogant and narcissistic In combination, these six‘protections’ advocate basic down-to-earth practical businessbehavior. They need not constrainprofitable, creative, innovativedecision making, entrepreneurialthinking, or firm task-orientedmanagement. They do however seekto limit speculative, ill-founded,self-serving, grandiose and overlynarcissistic behavior by executivesand aim to limit and constrainpotentially irresponsible executivebehavior. At the same time, these‘protections’ seek to reduce themanipulation of leaders by theirfollowers and  the manipulation of followers by their leaders.With continuing pressure todeliver quarter-on-quarter growthexercising ethical, realistic, fair andprofitable choices is however easiersaid than done, as the continuingstream of corporate malpractice inthe media bear witness (Burrough,2004; Byron, 2004; Collins, 2009;Dotlich and Cairo, 2003; Hamiltonand Micklethwait, 2006). But evenunder such performance pressureswhy it might be seemingly sodifficult (i) to act with reasonedcommon sense, propriety,evenhandedness and (ii) to avoidoverly risky, rash, and self-promoting business decisionmaking? Perhaps some answersrevolve around the inherentvulnerability of being human andour underlying desires to survive,prosper, be liked, be respected, showwhat we can do and—significantlyperhaps—leave behind a positivelegacy that will demonstrate tofuture commentators (andorganizational historians) just howgood we were!If so there are a number of waysin which we can lessen oursusceptibility to such anxiety-provoking vulnerabilities that cancause us to exhibit ill-judgedbehavior in the boardroom andwithin the executive suite. Five‘reasons to be careful’ are suggestedwhich, if adopted, should help thesenior executive species to becomeless ‘endangered’!  Reasons to be Careful 1 – Human Vulnerability: Acknowledge and accept thatevery executive has limitationsand will thus be less than‘perfect’ irrespective of pastsuccesses and accomplishments.Consequently, they cannot beexpected to always ‘have theanswer’ and will need supportand help from colleagues fromtime to time. This more humbleorientation will guard againstomnipotent tendencies andmake it more ‘legitimate’ andacceptable for senior executivesto be able to listen attentivelyto advice and guidance fromothers without reproach.  Reasons to be Careful 2 – Examine the Context of theOrganization: Eachorganizationdevelops over timeits own internal culture andsystems of beliefs. This willaffect what an organization’sexecutives can and cannot do.So, examine the norms, ritualsand ‘corporate mythology’ of  your organization and considerhow it shapes your ownbehavior and decision making.A failure to tune-in sufficientlyto the internal cultural andpolitical landscape of theorganization may presage yourultimate failure.  Reasons to be Careful 3–Remember Personality FactorsMatter:  An executive’sbehavior is a function of theirunderlying psychologicalcharacteristics shaped throughtheir life’s experiences. It isimportant to remember thathow a person behaves will thusreflect on how they haveinterpreted the currentsituation which, in turn, will bebased on their past experiences,and their sense of personalidentity. Thus, personalitymatters!  Reasons to be Careful 4 –Avoid Entrapment: Those inpositions of influence and highstatus are invariably in dangerof being compromised (i)through the company they keep,(ii) the decisions they make (orfail to make), (iii) the dealingsthey are involved in, and (iv)off-the-cuff statements they COVER STORY
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