Stephen H Baum Leadership

It is clear that the personality of successful entrepreneurs plays a crucial role in their success. Traits of passion, energy, drive, persistence, self-confidence, intuition and creativity within their chosen space all contribute.  

However, we frequently read about the failure of a company whose name is familiar and whose fortunes we thought were favorable. We wonder what happened. Where did they go wrong? Was it strength that became weakness?

Occasionally, the answer truly lies in the marketplace – an unanticipated event beyond the ability of the best of bosses to anticipate or control. 

More often than not, however, the failure lies in the intent and behavior of the person. In my experience, they are as follows in order of decreasing frequency and increasing catastrophe:

– Ignorance

– Incompetence

– Insouciance

– Cowardice

– Arrogance

– Malice

To be clear, here are the definitions along with quotes which paraphrase what I have heard when the boss was candid with me or when I read in the news articles that got beneath the veneer:

1. IGNORANCE: I did not know:

“I wish I had asked. I would have acted differently if I had known,” or  “Nobody thought to tell me,” or “ They told me but there wasn’t enough evidence to make me a believer.”

2. INCOMPETENCE: I knew but did not understand:

“Hindsight is 20/20. I knew, but I did not understand or foresee the consequences.” 

3. INSOUCIANCE:   I knew and understood but didn’t care:

“Sure I knew. But I really did not take it seriously until too late,” or “I thought it wouldn’t get serious.”

4. COWARDICE: I knew, understood, cared, but did not have the courage to act:

“I could not bring myself to act ((overrule the recommendation from my lawyers? Go against my team? Fire the executive? Put the funds at risk?)).”   

5. ARROGANCE: I knew, understood, cared and had the courage to make the tough choice, but believed I could get away with the path I chose: 

“We were on a roll. We could do anything. Who did they think they were to question me?” 

6. MALICE: I knew, understood, cared, had the courage to act, but my personal agenda comes first. (arrogance combined with lack of integrity).

“I had to protect my own power/wealth” or “I was gonna get even no matter what.” 

When you read about a company or entrepreneur really in the soup, ask yourself “what contributed most to the failure?” How far down the hierarchy was the boss in the choices that really mattered? How many words does the text contain before it actually uses the word “arrogance” or cites the boss’s personal agenda as overriding all other concerns? Such failures are not limited to the top 500 companies, some of whose leaders are either out of work or in jail. In smaller companies, the values and behavior of the owner are usually more top of mind for everyone. 

If you have a strong leadership core – character, the appetite to lead, the confidence to embrace risk, capacity to be decisive, ability to engage and inspire followers – the intent and behavior that have contributed to your setbacks may not be part of your DNA. You will do better by being more self-aware and more open to the possibility of having been unnecessarily your own worst enemy. 

However, if you are a “mask” – an impostor who has substituted pretensions for a strong leadership core, who is more about herself or himself than about the enterprise and the people in it, or who has resorted to bullying and browbeating and counterproductive micro-managing, then you have the DNA of faiure. In that case, I regret that you have two choices: give more latitude and authority to one of your trusted lieutenants or prepare yourself for a crash. 

In future editions of this viewpoint article, we will examine case histories taken from the news or my personal experience and I will give you my take on the frequency with which leaders arrive toward the bottom of the list. 

 If you are an entrepreneur at any stage from start-up to early success, look in the mirror and examine your behavior in this light. Revisit some of the setbacks you have experienced and use them to learn how to reduce the possibility of more catastrophic failure. Discuss this with whomever you trust. 

You may find use in applying it to the one or two people on whom you and your enterprise most depend. When they have let you down or otherwise been set back, what was the root cause? A timely conversation may help them perform better next time. 

If you are a board member, put aside the governance manuals for a moment and think about the DNA of your leadership. 

If you report to the entrepreneur, have the courage to help her or him avoid sliding down the chain.

Feedback, positive and negative, are welcome on my blog at www.stephenhbaumleadership.com where you will also find videos of CEOs whose insights address such topics.