Why Things Go Sideways and Smart People Lose
By Sandy Schroeder
According to Forbes.com, Eastman Kodak is a prime example of what happens when a successful company takes a wrong turn. Kodak invented digital photography and then sat on the technology, because they did not want it to impact their core business. The new technology prevailed and Kodak lost.
Following up on this issue, Dr. Travis Bradberry, co-founder of TalentSmart, an agency that serves 75 percent of the Fortune 500 companies, looked at the research of Sydney Finkelstein, a professor at Dartmouth’s Tuck School of Business.
Finkelstein and his colleagues studied 51 of the business world’s most flagrant failures. They spent six years interviewing CEOs and company staff to find out how and why such bad decisions were made.
Here are some of the Finkelstein study findings of common fatal errors.
They believed they were invincible – Their success convinced them their competitors would never top them, and the world would not change. Actually they needed to question their positions and be aware of real threats.
They believed they were the brightest of all – When you think you are smarter than everyone else, it is easy to ignore or reject the ideas of others. Quick decisions may be made creating huge mistakes.
Company image became an obsession – The researchers discovered leaders who were sure image was all and would do almost anything to preserve it, including hiding low numbers or lesser products.
They wanted a staff that always agreed with them – When a leader puts loyalty above everything else, bright people with varying ideas may be pushed aside. Actually, open discussions of all possible views can keep a leader aware and a company strong.
They were not open to change – When people assume what worked before will always work, they are on dangerous ground. Most people realize there is nothing as constant as change, and they make an effort to keep up with it. New is not always better, but knowing what the competition is doing, and what the latest technological options are, just makes sense. Finkelstein found failed leaders often clung to one career high point, instead of adapting to the changing business landscape.
Warnings were waved aside – According to Finkelstein, many of these leaders were so focused on their own views they ignored all of the alerts of danger as they surged into disaster, and took everyone with them.
As usual, Dr. Bradberry has given us a lot to think about with this look at research on failed leaders. Being aware of what we are doing, and being open to change, is what it’s all about.
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