Why Executives Fail & Why It’s Important to Know

Why Executives Fail & Why It’s Important to Know

By Dan Coughlin

The Four Root Causes for Executive Failure

1. Poor Confidence

Joe had no confidence in himself. Technically he was brilliant in finance, but he didn’t see the value that he brought to the organization. Whenever his boss said, “Jump,” Joe said, “How high?” He ran reports six different ways just to please the people around him. His self–esteem was really label esteem. He told me that if he lost his title of VP of Finance his career would be over. He had no idea that he was the reason he had been successful up to this point and that he had the talent to rebuild his career if it came to that. When the company went through a reorganization, Joe had to interview for a position, and he did a terrible job of explaining what he would bring to the future of the organization. He was let go.

2. Poor Communications

Beth was rude. She was the VP of Operations and probably knew more about operations than anyone else in the organization. That was the upside. The downside was every time someone gave her a suggestion related to operations she rolled her eyes and threw her glasses on the table. She cut people off in mid–sentence, and told them what to do and when to do it. Even though she had been handpicked by the president for this key position, she was demoted based purely on her inability to communicate effectively.

3. Poor Judgment

Paul didn’t believe in alignment. He was the regional vice–president in charge of one of the most important regions in a national company. The entire organization had decided to focus on improving operations and the guest experience. Paul was focused on short–term financials.

He decided he would do whatever it took to increase sales. So instead of concentrating on improving operations, he created one discount program after another. Every week he would change the program so that he was offering a different product at an unbelievably low price. Customers kept coming back just to see what surprise awaited them.

For three years his region led the company in year–end comparable sales compared to the year before. However, he created three long–term problems: customers kept expecting lower and lower prices, his fellow regional VPs were torn over whether to focus on discounting or operational improvements. So they did neither very well, and customers became confused when they went to other parts of the country and didn’t get the same deals as in Paul’s region. Despite great numbers, Paul was removed from the position.

4. Poor Direction

Carol was an idea machine with no clear strategy. As the organization’s president, she saw ways to grow the business and talked about them at every meeting. And every day she had a different idea. Because of her title, the employees tried to implement every single idea she threw out there. Some worked very well, but over the course of four years her machine–gun approach to strategy backfired. Fewer and fewer customers were coming back each year until Carol was finally let go.

Why are these stories of value to you?

Regardless of your current title, if you understand the root causes of executive failure and identify any of them within yourself, you can dig those roots right out of the ground and replace them with healthier alternatives for the future.

Joe, Beth, Paul, and Carol were bright, competent individuals who failed. What could have gone differently for them, and what can you do about it for yourself?

Strengthen Confidence

Abraham Maslow used to say that true self–confidence is based on a feeling of personal dignity, the feeling that you are in control of your decisions and your destiny. (Resource: Maslow on Management by Abraham Maslow.) If you change your decision every time you get confronted with an opposing point of view, you will continually erode your self–confidence.

Take out a sheet of paper and write down your answers to these questions:

  • What are my values, the beliefs that determine my behaviors?
  • What are my strengths, the things that I do well?
  • What are my passions, the things that I get the most excited doing?

Then when you are doing an activity, ask yourself, “How can I do this in a way that fits with my values and leverages my strengths and passions?” In this way, you will be contributing your greatest value to a project rather than being a corporate change artist. Over time, people will realize that you are not their puppet, but rather an intelligent person who focuses on delivering true value.

Improve Communications

Effective communications are based on three prerequisites: honesty, clarity, and respect. If you want to do a self–test on your communications, ask yourself these three questions:

  • Was I honest with the other person?
  • Does he or she understand the message?
  • Did I say it in a way that demonstrated respect for the other person?

If you can answer yes to those three questions, then you were effective as a communicator. This doesn’t mean that people will be happy with your decision. It doesn’t mean that you won’t have to discuss it further. It doesn’t mean you won’t change your mind later. But it does mean that in that moment you were an effective communicator.

Use Wise Judgment

Using wise judgment is the process of finding and selecting the best decision to achieve sustainable improvements in results. While there are a lot of factors involved in making a wise decision, here are three that I suggest you consider:

  • Does it fit with my personal values?
  • Does it fit with our organization’s values, strengths, and passions?
  • Will it potentially have a positive, lasting impact on our organization’s most important desired outcomes?

One of the organizational values that Paul ignored was teamwork. He went on his own to generate great short–term results and left everyone else to look foolish.

Clarify Strategy

A strategy is a story that tells what an organization wants to achieve and what it intends to do to achieve it. If you’re the top executive for the group, then you need to work with other key executives to finalize the storyline: the plot, the main characters, the roles they perform, etc. You have to decide if your company is product–centric, customer–centric, technology–centric, distribution–centric, sales method–centric, or profit–centric. You have to decide on the quality of the product, service, and customer relationships that your organization is going to provide. You have to decide on the value your organization is going to put into the marketplace.

And then you need to stick to your story.

If you change the plot everyday, the story gains no traction. Employees and customers get confused, and very soon you have a literary, and business, mess.

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