7 Habits of Unsuccessful CEOs

By SiliconIndia,Wednesday, 01 February 2012, 17:28 IST

Bangalore: "Why Smart Executives Fail" was a book published by Sydney Finkelstein, the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth College. The book spoke about how big companies turned out to be complete failures due to the habits of their seniors or executives. These habits are registered in some of the leading executives of these days which can be warning signs for them. Listed below are the habits that Finkelstein described in a 2004 article:

I and My Companies Rule the World

This is the most sinister habit, as it appears very enviable. But don't you think a company should not aim at dominating the market rather shape the future of its market? The failed leaders fail to realize that they are at the mercy of change in circumstances. They feel they control events and underestimate the changing trends in the market. The illusion of personal supremacy is what traps CEOs. They felt that they have all the control over the company and as far as others in the company, they are just to execute their personal vision for the company. Samsung's CEO Kun-Hee Lee was successful with electronics which made him feel he could equally do well in automobiles and he invested $5 million on the oversaturated market. He just entered the auto business because he loved cars, there was no business case. The warning sign here is lack of respect.
 Personal Interest and Corporation's Interest Becomes One

This habit might look harmless and beneficial. A company always demands for a dedicated and committed leader, with their interests associated with the company. But if we have a deeper look at the failed executives, we will see that, rather than considering their company as enterprise and nurturing it, these executives treated them as an extended part of themselves. CEOs with such mentality carry out their personal ambitions by using their companies. Most of these CEOs use company funds for personal use, which pushes them towards the slippery grounds. CEOs who have impressive track and feel that the company has made huge profits with him are so even if they likely to make expensive expenditures it will always appear less by comparison. Dennis Kozlowski of Tyco was majorly influenced by this logic. His pride in his company and his pride in his own profligacy seem to have reinforced each other. Being the CEO in a company is almost a king in your realm, which can turn very dangerous with time.

 
 I Know it All

A dynamic leader is known for making dozen decisions at his finger tips, dealing with crises, and we admire such a leader. But in reality it's a fraud. Leaders who are perpetually decisive are inclined towards settling issues so quickly that they have no chance to take hold of consequences. They are so arrogant that they are never open to new ideas and they have this feeling that they know it all. Leaders who need to have all the answers shut out other points of view. When your company or organization is run by someone like this, you better hope the answers he comes up with are going to be the right ones.
 If You Don't Follow Me, You are Eliminated

CEOs have this feeling that that all are bound to follow their vision and it is the job of everyone to buy what he says. Those who don't tally with the vision will are only given two options: either go with the plan or leave the company. This approach is unnecessary and destructive. It's not logical for a CEO to expect everyone to agree with his views. As the CEO arises, they cut off their chances to see and correct their problems. Many executives leave as soon as they are on board, once they realize their CEO is not in their support. Ultimately, these CEOs had everyone on their staff completely behind them, they are heading towards disaster. And he has no one to warn him.
 Obsession for the Company Image

High profile CEOs are always in public eye. Amid all this public frenzy leaders become low and unproductive as they are constantly tring to accomplishing things than achieveing things. When CEOs are obsessed with their image they have little time for operational details. The top priority for a CEO is company's image. They even take the jeopardy of using financial-reporting practices to promote that image. They treat their financial accounts as a control tool, rather than treating them as a public-relations tool.
 Underestimate Obstacle

When CEOs turn out to be so charmed of their vision, they frequently overlook or underestimate the difficulty of actually getting there. When the obstacles turn out as pain they casually wave them sideways which turns more bothersome than they predict. These CEO have a custom of dropping full-steam into the void. Some CEOs are obsessed to be correct all the time, because they feel making a mistake can pull the "CEO Chair" behind. If CEO makes fallible decisions they will receive criticism. These unrealistic expectations make them push too hard.
 Stubborn About Past Practices

Some CEO is always adamant to follow the tried and used methods, which pushes the company into devastation. What they desire as their core strength, actually makes them clinging to a fixed business model. Inability to make innovations results in failure. CEOs generally fall prey to this habit. They feel the one thing they are most known for will get all the work done for them every time. Once they become the CEO of a company they allow their defining moment to identify the company as well, not being bothered how impractical it has become.