Whenever I see an article that tries to extract patterns from a limited study of successful or failed companies, my BS detector goes off. I just read this abomination on Forbes: The Seven Habits of Spectacularly Unsuccessful Executives.
I remember back in 1997 when I first heard of some friends reading “The 7 Habits of Highly Effective People.” My first reaction was “if I studied the 7 habits of awesome dolphins, could I become one?”
This article is worse than that because it’s plagued by hindsight bias and dishonest language. Let’s dissect the “habits” one by one:
Habit # 1: They see themselves and their companies as dominating their environment
I wonder how many successful executives also do this. The question is whether you are right or wrong! If you are Larry Page and you see Google as dominating the online advertising market, you are successful. On the other hand, if you are an AOL executive… The key “ability” here is realizing when there is an up-and-coming threat, and acting accordingly. This is not always possible at the time, but it’s trivial in hindsight.
Habit #2: They identify so completely with the company that there is no clear boundary between their personal interests and their corporation’s interests
Two words: Steve Jobs. Of course if you had this habit and you failed, you were not Steve Jobs. A more interesting question would be: of all executives with this trait, how many succeeded and how many failed? Of course, that’s not addressed.
Habit #3: They think they have all the answers
Hmm… what if they happen to be right? How many successful companies have executives who think they have all the answers? Also, this could be rephrased in a more positive way: they are extremely confident. Both mean essentially the same thing, except one is a criticism in hindsight.
Habit #4: They ruthlessly eliminate anyone who isn’t completely behind them
Of course, successful executives don’t do this. Instead, “they do not hesitate to fire those who won’t align themselves behind the company vision.” or something equally positive.
Habit #5: They are consummate spokespersons, obsessed with the company image
That’s probably true of most high-profile CEOs, whether successful or not.
Habit #6: They underestimate obstacles
Of course, this can only be true in hindsight. If you succeeded, then you took smart and calculated risks. This statement is just unadulterated stupidity.
Habit #7: They stubbornly rely on what worked for them in the past
Again, successful CEOs learn from experience. They know what worked and what didn’t work. They are not stubborn, instead they possess resolve and determination. They “stay the course.”
The article is a collection of cognitive biases. It also falls prey to a basic trick of the human brain: creating a story to explain what may be the result of an intractable set of interactions including timing, market, and luck. Investment analysts want to believe in a world of easy explanations and prescriptions for success (or at least, avoidance of failure). They need to be called out more often when they put out this kind of drivel.
Oh well. So long and thanks for all the fish.