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Bill George

Harvard Business School Professor, former Medtronic CEO

Why Leaders Lose Their Way

David Sokol, Mark Hurd, Greg Mortenson, Eliot Spitzer, and Rajat Gupta.  The list of talented leaders at the top of their game losing their way continues to expand. All of these leaders were highly successful in their respective fields and had promising careers ahead of them. For this reason, their behavior is especially perplexing and raises many questions:

  • What causes these leaders who have been known for their integrity and their leadership to engage in unethical activities?
  • Why are they willing to risk great careers and unblemished reputations for such ephemeral gains?
  • Is this simply greed, as many have suggested, or is something deeper going on?
  • Do they think they won’t get caught, or could they honestly believe their elevated status puts them beyond the law?
  • Did they get caught the first time they did something inappropriate, or have they been building to this for a long time with lesser actions paving the way?

Despite myriad news articles, I have yet to see one that illuminates what led to such unusual behavior by such successful people. To be clear, I’m not taking a position on the legality of their actions, but rather examining the root causes of their actions.

After the fall of Enron, WorldCom, et. al. in 2003, I became very troubled by what had happened to so many of our corporate leaders. In 2004 I wrote a paper for my new class on “Leadership and Corporate Accountability” at Harvard Business School titled, “Why Leaders Lose Their Way.” I’ve excerpted pertinent examples below, which seem very pertinent to today’s cases:

Part I – Why Leaders Lose their Way

 In the seemingly never-ending revelations of corporate scandals that have been exposed since the fall of Enron, the media, politicians, and the general public have taken to characterizing their leaders `as “bad people,” even to the point of considering them evil.  The rest of our leaders have become suspect, as corporate executives are tied for dead last with used car salesmen in terms of the public trust. These overly simplistic notions of “good leaders” and “bad leaders” only serve to cloud our understanding about the nature of leadership in the business world and how good leaders can lose their way. 

Very few people go into leadership in business to cheat or do evil things.  Yet all of us have the capacity to do things we deeply regret unless we develop the means of staying centered within our leadership. These leaders are not bad people; they have just gone astray. 

Before anyone takes on a leadership role, they should first ask themselves two fundamental questions, “Why do I want to lead?” and “What is the purpose of my leadership?”  These questions are simple to ask, yet the process of seeking answers to them is profound and may take decades, even a lifetime, to answer.

If the truthful answers to the first question are simply power, prestige, and money, these leaders may be at risk of relying on external gratification as the source of their fulfillment.  There is nothing wrong per se with desiring these outward symbols as long as they are combined with a deeper desire to serve something greater than oneself, such as to be responsible to those you are leading and to serve them.  That’s where the deeper sense of inner satisfaction comes from, not from having money, prestige or power. 

Leaders whose singular goal is the quest for power over others, unlimited wealth, or the fame that comes from success tend to look to others to give them a superficial sense of satisfaction and to attest to their greatness, if not their goodness. In public, as well as in private, these individuals exhibit ego-centeredness.  As their names appear more frequently in the media, they start to believe their own press.  As leaders of institutions, ultimately they come to believe that they are the institution and that the institution cannot survive without them.

Most leaders don’t start out this way.  Yes, they like to be fairly compensated for their accomplishments and to have the material pleasures that come with them.  Being given added power reinforces their success, and they enjoy the prestige that goes with it.  But along the way, their success in these realms can go to their head, and they start seeking more and more external success until they cannot get enough.  It is at this point – at the height of their power, their fame, and their material wealth – that they are most susceptible to losing their way, if they haven’t already lost it.  Their string of successes creates a deep desire to keep it going, just as they feel more and more like imposters in their roles. Out of fear of losing their status and stature, they are prone to doing increasingly bizarre and even illegal things. 

Losing Touch with Reality

Let’s examine how this happens.  By focusing on external gratification instead of inner satisfaction, leaders find it difficult to stay grounded.  They begin to lose touch with reality, even if the ability to define reality accurately was a key quality that brought them success in the first place.  Typically, these leaders reject the honest critic who holds up a mirror to them and “speaks the truth to power.”  Instead, they surround themselves with sycophants who tell them what they want to hear.  Over time, these leaders lose the capacity for honest dialogue, as others learn not to confront them with reality or the truth. 

Craving Success

Let’s look deeper into the root causes of these behaviors.  Losing touch with reality, which is one of the most common and dangerous traits of successful leaders, often results from the lack of introspection about who they are.  Underlying these tendencies may be an insatiable craving for success caused by a burning desire to overcome narcissistic wounds from childhood.  These wounds may have been caused by perceptions that their parents did not love them, they are not good people, or the trouble they had in making friends in their early years.  So they try ever harder to keep their string of accomplishments going so the external world will view them as highly successful.

. . . and Fearing Failure

The other side of the coin of craving for success is a deep-seated fear of failure.  Many leaders get to the top by imposing their will on others, even to the point of destroying people that stand in their way.  By the time they reach the top, they may be paranoid that someone else waiting in the wings to knock them off their pedestal.  This is akin to the “King of the Hill” game that little children play in the schoolyard.  Thus, these leaders can develop “the imposter complex,” caused by a deep insecurity that they really are not good enough to hold such a powerful leadership role and that any day now someone is going to unmask them.

To prove that they are not imposters, they drive so hard for perfection that they are incapable of acknowledging their failures and their weaknesses.  When confronted with information demonstrating their failures, they try to cover it up or to create a rationale that convinces others these problems are neither their fault nor their responsibility.  Often they will look for scapegoats on who they can blame their problems, either internal to their organization or on the outside.  Through the combination of power, charisma, and communications skills, they force others to accept these distortions, causing entire organizations to lose touch with reality.

Making Big Mistakes

At this point leaders are vulnerable to making big mistakes, such as violating the law or putting the very existence of their organization at risk.  In their desperation to keep their success going, they may wind up stretching the rules beyond legal limits.  In some cases their distortions of reality and powers of persuasion enable them to convince themselves and others they are doing nothing wrong. Or they believe they can outsmart the enforcers of laws.  Some rationalize that their deviations are acceptable because they are seeking to create a greater good.

In examining the behavior of leaders at this stage, one may conclude that they lack a moral compass, a sense of their “true north,” that keeps them centered.  Some may have had a moral compass originally, but lost sight of it as they got caught up with external gratification. 

The Loneliness Within

It is lonely at the top.  No one doubts that.  When you’re in that position, you know that the lives and fortunes of so many people rest in your hands, and you are ultimately responsible for what happens.  If you fail, many will be deeply hurt.  You try to deny that loneliness, which may lead to avoiding the anxiety of facing reality.  You shut down your inner voice, because it is a constant reminder that long ago you abandoned your true self.  It is just too painful to confront or acknowledge, but it returns to you in your dreams as you try to resolve the irresolvable conflicts rustling around inside your head.

 . . . that Can Lead You Astray

Lacking connection with your own inner voice, you start listening to all the voices pressuring you, thinking that if you can satisfy them, all will be well.  But their advice is often conflicting, or too painful to face.  So you choose to listen only to those voices that reinforce your views. Meanwhile, your work life and your personal life are growing more and more unbalanced.  Fearing failure, you favor your work life, even to the point of saying, “My work is my life.”  You lose touch with those closest to you – your spouse, your children, and your best friends – or you co-opt them with your point of view. Eventually, you lose your capacity to think clearly about important issues. 

By now your little mistakes have turned into major ones.  No amount of hard work can correct them.  In your desperation you keep digging yourself a deeper and deeper hole.  The collapse is near.  When it comes, there is nothing you can do to avoid it.  You attempt to stave off the consequences, but societal powers overwhelm you.  You are trapped.  The tragedy of your behavior is unfolding to its ultimate conclusion.  There is nothing you can do.

Who are you?  You could be one of those executives facing prosecution for their actions.  Or just a former CEO forced to resign “for personal reasons.”  But “you” could be me, as we are all subject to these tendencies, in greater or lesser ways.  We may not face a plight as severe as these leaders, but we can all go this route.