BGA | BUSINESS IMPACT
B usiness Schools are become emerging leaders in organisations and their hard work is rewarded with success. But too much success also presents possible pitfalls. After a string of accomplishments, young leaders may conclude that their successes prove that their decisions are always correct, and that their ideas are always the best. That attitude risks leading them to dismiss the ideas and perspectives of colleagues. The word for this is ‘hubris’, and it is equally dangerous for the person displaying the hubris as it is for those working with them. The importance of well-functioning teams whose leaders prioritise co-operation, magnets for talented, ambitious people who are used to achieving what they set out to do. Usually, these driven students go on to humility and open-mindedness are clearly demonstrated in my work as the head of a consultancy that helps CEOs and their organisations examine their culture. So, too, are the dangers of what happens when overconfidence is left to grow unchecked. Leaders' overestimation of themselves and underestimation of others result in poorer outcomes and missed opportunities for both the business and the person who succumbed to hubris. How hubris works and how to fight it Too often in both corporate leadership and business education, we equate the drive to succeed with the pressure to succeed at all costs. The pressure on executives and students to achieve results can lead them to abandon any attempts to consult and co-operate. The pressure to meet and outperform, be it for a class or an earnings report, leads to short-termism and a relentless pursuit of success at the expense of broader considerations. This results in leaders being wrongly admired for their overconfidence, drive and single-mindedness. It rewards autocratic decision-making by CEOs and boards, and the forgoing of consultation and collaboration. In the short term, the results from this approach might look good and indicate that things are working. In the longer term, it is bound to lead to problems. Poor collaboration leads to siloing throughout the organisation, which can lead
Stopping hubris requires: 1. Being able to spot the warning signs — lack of collaboration, lack of humility and a lack of understanding (or willingness to understand) regarding the effects of their decisions. 2. Understanding why people fall victim to hubris, and which kinds of environments encourage it and how to avoid them. 3. Examining high-profile examples that illustrate the business consequences of hubris, both at the level of companies — such as WeWork, General Motors, Uber and Deutsche Bank — and at the individual level – among the executives whose overconfidence in their infallibility led to predictable failures that tarnish their otherwise brilliant careers. The lessons of history must be accompanied by education in anti-hubris values and skills to check overconfidence. Cautionary tales I doubt many readers would need more than a moment to think of several examples of hubris in business. There are cautionary tales among both individuals and entire companies: They’re blockbuster movies and 600-page biographies, or, in the case of Boeing, the subject of tragic TV news for weeks. Educators can use these examples as case studies. In the 2021 book, Too Proud To Lead , my co-authors and I look at four cautionary tales. The We Company, once again rebranded as WeWork, shows us, ironically, how its name was belied by a failure to embrace true openness and collaboration, while its investors’ unquestioning faith in Co-Founder, Adam Neumann, constitutes its own form of a complementary, enabling hubris. While Neumann was overconfident in his own abilities, and instilled that in his acolytes and investors, the subject of our second case study, General Motors (GM), is overconfidence in the permanence of the status quo. GM’s failure to compete with Japanese automakers in the 1980s and 1990s cost it market share and reputation. After its recovery in the late 2000s, aided by the US taxpayer, GM seems once more to be underestimating a new wave of competition — this time from Tesla and the industry-wide move to electric vehicles.
to the creation of fiefdoms in which data is not shared but wielded for power against ‘competitors’ within the company. It is not a recipe for long-term thriving. Companies concerned with legacy, long-term survival and staying relevant are broadening their purpose. Profit and shareholder value are no longer sufficiently broad aims — businesses need to develop a purpose- and values-driven vision for the future. By doing so, they are democratising their purpose and creating ownership of it throughout the organisation. By adopting a shared vision, instead of a CEO-driven vision, companies will diffuse most of the risks of a skewed, hubristic approach taking root. The trend towards ‘purpose’ as the key driver of a business’s vision for the future is a healthy one and involves all relevant stakeholders naturally – the board, employees and suppliers, as well as the customers and communities. This broadening of responsibility creates a need for greater transparency and a wider set of obligations, which forces CEOs to adopt a more inclusive approach. In this way, ethical, equitable, environmental and societal values become a part of their decision-making. ‘Young leaders may conclude that their successes prove that their decisions are always correct’ Business Schools can take the lead Hubris, like so many other issues, is easier to prevent than it is to reverse. That makes Business Schools the perfect place to curb overconfidence in the next generations of leaders. Fortunately for educators, teaching this is not an additional curricular goal to add to the heap — it can be integrated into the existing syllabus. Not unlike other competencies in business education, teaching against hubris needs to include the development of critical- thinking skills and emphasise the values of collaboration, long-term thinking and the practice of welcoming alternative and opposing viewpoints.
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