Seriously? How many more decades are we going to see people mistake correlation for causation as if this problem had not been thoroughly understood? This article reads like one long speculation presented as fact.
Kahneman and other psychologists have long established that we color character traits into stories that fit the result. If a CEO is pursuing his beliefs strongly and the company succeeds, we call him a visionary. If the company fails, we say 'he never listened'.
If you really wanted to check the influence of a certain character trait, you'd need to try to (carefully) compare how CEOs with the trait performed compared to CEOs without the trait, and make damn sure your sample sizes and methods are sound before making any confident assertions. What you definitely don't want to do is look at a handful of failed companies, find some common traits among their CEOs and call it 'The 7 Habits Of Spectacularly Unsuccessful CEOs'. That's intellectually negligent, and it's a testament to something that is fundamentally broken in journalism — we have publications that pretend to educate when they in fact serve misinforming entertainment.
Shame on Forbes for publishing such ill supported claims, they should have more respect for their readers.
"This article reads like one long speculation presented as fact."
Though this might be true about the article itself as posted, this is not a bit of bad journalism. The author Sydney Finkelstein, is a Professor of Management and spent 6 years studying 50 companies and conducting some 200 interviews, here's a link to the journal article : http://www.jacksonleadership.com/pdfs/7Habits_IveyBusinessJo...
So to answer your "If you really wanted to check the effect of a certain character trait, you'd need to try to (carefully) compare how CEOs with the trait performed compared to CEOs without the trait, and make damn sure your sample sizes and methods are sound before making any confident assertions." It seams like 6 years, 200 interviews, and research in 50 companies would seem to be a fairely extensive study IMHO.
Just because a sample consists of 50 companies and 200 interviews hardly makes that a sound sample, given no information about how those companies were selected, and given no attempt to compare those companies to successful companies. For example, 5/7 of these traits easily describe Steve Jobs.
Furthermore, just because someone is an academic authority hardly makes them less liable to fall for the cognitive biases that davidkatz mentions (that we color character traits into stories that fit the result). It goes without saying that we all have a strong bias to attribute other people's actions to their personality rather than conditions in their environment over which they have no control (http://en.wikipedia.org/wiki/Fundamental_attribution_error). We generally don't apply this error to ourselves.
The classic example is that if someone trips over a rock, you'll tend to have the impression that they're clumsy. If you trip over a rock, you won't think you're clumsy, you'll just say to yourself that the rock was sticking out.
I suppose I should have been more verbose above. Basically, I don't want to say that davidkatz's and yours notes about the possible errors and biases of the study are unfounded. IMO, every study or report should be approached with these precautions in mind, if simply because all data has to be interpretted at some point which makes it subjective. But the main point I was trying to get across is that a study of this size conducted by someone of academic authority should not be simply waved off as a piece of bull b/c of possible errors, which was the impression that davidkatz's post made on me.
I'm sorry to say that I've had personal conversations with faculty researchers in diverse fields that gave me the distinct impression that these people really should not be doing research. It's very easy to go through the 'form' of good research. Interview a lot of people, look at a lot of data, but that's no guarantee for good research.
When someone says: 'here are 7 habits of unsuccessful CEOs' and does not even attempt to account for the problem of 'how do we know it's really these habits that caused the company to fail?', but rather just flat out assumes it in the face of decades of findings that suggest that this is an easy trap to fall into, I for one can't take them seriously, and academic credentials have almost nothing to do with it.
I think the issue is journalism vs scientific reasearch. In journalism, you do not have the luxury of spending huge quantities of time developing your methadology and validating your statistics; and it is understood that journalism is much more by-the-gut than science.
One of the major jobs of journalism is to help your reader draw connections and get context for current issues. As long as readers get a diversity of sources, and views are expressed in rough proportion to how they are help by people in the field, then I think journalism is doing its job.
Journalists have a responsibility towards facts that is just as strong as a scientist's responsibility towards facts. The major difference is that journalists are not necessarily expected to discover facts, but report on them, which greatly shifts their scope of attention.
Helping readers draw connections and get context is valuable, but only if it's done within the facts. A journalist or a publication that reports something that is factually wrong has to loose credibility.
Reporting something as fact when it is merely speculation is a milder form of reporting something that's factually wrong, but it's almost as deserving of our criticism.
I haven't read the book that he linked to, but in the blog post or the journal article I didn't see any true exploration of causation vs. correlation.
What if these are 7 habits that make people likely to become CEOs? It would follow, then, that CEOs that failed would also exhibit these habits. I'd like to see the article provide some evidence that these are habits specific to "spectacularly unsuccessful" CEOs as opposed to CEOs at large.
Without having to provide such evidence, I would propose an 8th habit common to all spectacularly unsuccessful CEO: they all breathed air. If your CEO or senior execs breath air, it may be a warning sign.
This may be the factor behind the success of Shark Tank. By backing CEOs who are gill-endowed, they remove air from the equation. OTOH, it does open them up to accusations of fishiness behind the scenes.
I've been in companies whose CEO exhibited all of the items on the list (two in particular has a good 5 of them). They became CEO by convincing people with money to invest in their "vision" (it always starts as a vision sale).
Now both companies are under new management where the CEO only has one or two of the items on the list and are doing ok. In both cases, neither CEO could understand why they were being removed and were certain the company would totally fail without them -- as they were the most important person in the company!
Another favorite of mine: Feel they can do everyone else's job better than them. Also, You are an expert until you hire on -- then you are just another body.
All corporate biographies are written by people who know the end of the story and now have to retrofit some facts and omit the others to backfill the story so that it seems like a straight line leading to success/failure.
I present to you a set of quick templates for writing business advice where you know how the story turned out.
CEO failed: They see themselves and their companies as dominating their environment.
CEO succeeded: They expressed confidence in their leadership and weren't afraid to explore riskier opportunities.
CEO failed: They identify so completely with the company that there is no clear boundary between their personal interests and their corporation’s interests.
CEO succeeded: Laser focus is what differentiates them from other [loser] CEOs. Ability to identify major problems and relentless pursue them instilled energy in top management team and eventually led to success.
CEO failed: They think they have all the answers.
CEO succeeded: Successful CEOs have to be quick at their decisions. Sometimes the underlings will deliberate too much, as rarely there are obvious strategies, and some elements of risk are involved in pursuing any new opportunity. A CEO is someone who's able to cut to the core of the issue and make a decision, so even when failure happens, it happens faster and lessons are learned.
CEO failed: They ruthlessly eliminate anyone who isn’t completely behind them.
CEO succeeded: There's no "i" in the "team". Avoid detractors and those who try to play politics. Focus on execution, remove all obstacles to flawless implementation.
CEO failed: They are consummate spokespersons, obsessed with the company image.
CEO succeeded: Not afraid to stand up and be the face of the company. This builds trust in customers, even when the reason for standing up is to apologize for a mis-step.
CEO failed: They underestimate obstacles.
CEO succeeded: Focus on the end goal. A lot of people will try to scare you from expanding into new markets, and you know there will always be problems. It's how you deal with those problems that makes or breaks the company.
CEO failed: They stubbornly rely on what worked for them in the past.
CEO succeeded: Stick to your gut feeling. If the business model does not seem viable, there will be plenty of distractions telling you that "this time it's different". Recognize core issues when you see them.
While it might be funny, I've never seen anything like this come from any of the books I've read. In fact, some of your "succeeded" advice is mentioned as "wrong" precisely for the reasons they can fail. In fact:
> retrofit some facts and omit the others to backfill the story so that it seems like a straight line leading to success/failure.
None of the good ones remotely do this. They mention the failures right along with the successes, and it's rarely a book about "their" success.
Nothing you've read, if you read anything, is of merit, not because of the subject matter, but rather, your poor choices.
I think this is a very good list, and I'm very surprised at the negative reaction it's getting here. The habits in this list are all signs that an executive is making decisions, not rationally, but out of hubris. I'm amazed that people can't see that this is a problem.
I've always looked at the CEO position as something that is very hard to find someone to carry out. Anyone clown can do a startup with a little website and talk about getting traction. Bit few can actually deal with the demands of being the CEO. The position is what sets the tone of the company and its culture. Rotten people create rotten cultures. If I ever was in a position to be a real CEO ( from a successful company), I would really invest in learning about people, how they work better, and how to give them good tools so they can do their jobs. Not in fancy planes, or luxurious offices. I despise those things. Guess that my take on the CEO is that he/she has to be in a servant type of position rather than that of a dictator.
Yes, Jobs had all of these qualities to varying degrees.
The list is bullshit. It doesn't make a bad CEO, it makes an aggressive, ambitious CEO.
I would say that all of these traits are good to have in a CEO. Provided you have a CFO or COO who keeps his eyes on the numbers, keeps the company solvent and keeps the CEO in the realm of sanity.
Jobs had Tim Cook and his predecessors Fred Anderson and Peter Oppenheimer who managed to keep 30 billion cash in the bank even when Apple were at their lowest ebb and turn an operating profit in all but 4 quarters.
Or seven habits that increase risk. These habits boil down to having an extreme trust in their own infallibility, and eliminating and ignoring input that disagree with them, which may work fantastically well for a long time if you are a true visionary, but puts you at extreme risk of being blindsided if you aren't, or eventually even if you are.
I'm trying to work out if this article is intended to be ironic or humorous. The list is basically a description of the Apple corporate culture (and to a lesser extent some of their rivals), and then it ends with "[Jackson was long AAPL at time of writing]".