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.
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.
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.
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.
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.
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.
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.
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.
> 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.
What to do when the outcome is mostly determined by luck?
These books and articles are just cloudspotting. They see a bunny rabbit, I see a lucky skunk.
Habit #5: They are consummate spokespersons, obsessed with the company image
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.
If they are good, they use there personality traits to make things better. If they are bad, they use these traits to make things worse.
Steve Jobs was an asshole and would have got nowhere if he hadn't met Wozniak.
When Jobs set out on his own, he got the flaming defeat that was Next Computer.
Maybe his traits should be seen as negative, but he was lucky other talent at Apple could compensate for them.