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Is Executive Hubris Ruining Companies? 94

Crash McBang wonders: "In a recent IndustryWeek article, Mathew Hayward, assistant professor at the University of Colorado, does a Q&A on his new book, "Ego Check: Why Executive Hubris Is Wrecking Companies And Careers And How To Avoid The Trap", which shows how executives' inflated egos can impact what they choose to produce, the manufacturing decisions they make and how they market their products. What failures (colossal or otherwise) have you been involved in that could be attributed to Executive Hubris?"
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Is Executive Hubris Ruining Companies?

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  • by Anonymous Coward
    From what I've seen in person, yes.
    • by Travoltus ( 110240 ) on Friday February 02, 2007 @04:02AM (#17856008) Journal
      More liberal communist tripe by yet another confiscationalist author from Rio Linda California.

      Don't you people realize that it's unions, not corporate execs, who bring companies down? Look at what the electricians' union did to Enron!

      [right wing parody off]
    • by Anonymous Coward
      Aristotle defined hubris :
              to cause shame to the victim
              not in order that anything may happen to you, nor because anything has
              happened to you, but merely for your own gratification. [snip]
              men think that by ill-treating others they make their own
              superiority the greater

      Hubris can destroy nations

      why not companies ?
    • by soren100 ( 63191 ) on Friday February 02, 2007 @02:21PM (#17862268)
      It seems that the arrogant jerks are the ones who want to be CEO, from my experience.

      I work for a small startup that finally had a really profitable year, and made $600K profit in '05-'06 off of our main customer. There were only about 8 people in the company, so that was pretty good -- we had a lawyer, two programmers (including me) and some salespeople.

      Sales were really good, and the company decided it needed some "leadership" - so a CEO was hired -- this guy was a retired CEO of a call center. (we were a web training startup, so this was a big WTF for me, but I had no say in it)

          This CEO then basically decides to spend the whole year keeping everyone tied up in meetings. At the first all-company meeting (we were all telecommuting) a co-worker said "this looks really bad -- there are monre chiefs in this company than indians" -- out of 8 people, 5 were executives and 4 were regular workers.

        Our product is web training based on PHP and Mysql, so he had the lead programmer (the co-founder) driving a 100 miles to meet with "consultants" who claimed that our product was flawed because we did not have a "transactional" database, so they wanted to move us to a transactional database like MS SQL-SERVER, and "offered" to re-write the application in ASP for us since it had to be run on Windows now. They were publicly shown as idiots because after going on about how our database was not transactional, when we asked them why we needed a transactional database, they answered "I don't know".

      This CEO irritated our main customer so much that we lost them (the lawyer co-founder got arrogant and helped with this too), our new team of 6 salespeople were all trying to cold-call, and so we had basically no sales for last year. By December our company was weeks away from collapse. He had spent the whole year tying the company up in endless meetings and turning in endless reports. This CEO was such a control freak the sales director couldn't meet with the salespeople without the CEO being there.

      This guy came across all warm in the beginning, and he had the whole "sincere" act down, but pretty soon you could tell that he didn't think much of those he thought were "little" people. The company still had a possible future, but the CEO was focused on trying to sell the company off for the amount of the revenues still coming to the company, putting everyone else out of a job but guaranteeing him a bonus of $10,000. This probably would have allowed him to tell himself and everyone else he was "successful" in selling the company but he really did his best to drive it into the ground.

      This guy even did things like buying 10 laptops from one of his buddies for $3500 each but only putting 5 into use and not telling anyone about the extra 5 laptops.

      Now that we don't have a CEO anymore, we are all just doing our jobs and getting things done again. The politics and internal tension of the company which had risen to a fever pitch basically went away with the CEO as well. we are CEO-free, our main customer likely is coming back, sales are up since the 2 salespeople that are left can do their job without people looking over their shoulders all the time about "call numbers" -- and things are looking good!
    • "PIPSS" = Punks in pin striped suits.
  • by CRCulver ( 715279 ) <crculver@christopherculver.com> on Friday February 02, 2007 @02:48AM (#17855646) Homepage
    ...Needs a chair in the face. Accusing such responsible and level-headed executives as Mr Steve Ballmer of "hubris"? As if.
    • Re: (Score:3, Funny)

      I concur. I mean, taking a cue from Mr. Ballmer, I run into work every day yelling, "I LOVE THIS COMPANY!!"
    • by elrous0 ( 869638 ) *
      Yes, this guy is full of it. LOTS of companies hire detectives to illegally bug their board-members' houses, dig through their trash, and call up their phone companies posing as them. Why would anyone want to single out MY company as paranoid?

  • Obvious Sony Dig (Score:3, Insightful)

    by BinaryOpty ( 736955 ) on Friday February 02, 2007 @02:54AM (#17855672)
    Let me be the first to nominate Sony's execs (namely games devision but not limited to) for executive hubris running their company into the ground.
  • What failures (colossal or otherwise) have you been involved in that could be attributed to Executive Hubris?
    Most banking executives?
    • "What failures (colossal or otherwise) have you been involved in that could be attributed to Executive Hubris?""

      Depends on the definition of "failure", these two are high on my "colossal" list: The industrial revolution, The global economy.
  • by Kris_J ( 10111 ) * on Friday February 02, 2007 @03:04AM (#17855744) Homepage Journal
    What's ruining companies is upper management's pathological inability to make a fucking decision.
    • Ego Check: Why Executive Hubris Is Wrecking Companies And Careers And How To Avoid The Trap", which shows how executives' inflated egos can impact what they choose to produce, the manufacturing decisions they make and how they market their products.

      Nah, the problem is that these executives are running companies whose business models are predicated entirely on producing, manufacturing, or selling actual products. Clearly, they just need to be running different types of companies. Like the ones that were
      • Or, like HP, they kinda forgot about developing and manufacturing products and decide to concentrate just on selling stuff. After all, it's selling stuff that makes you money, right? Everything else is just a cost so you're best getting rid of that pointless, expensive R&D.
        • Re: (Score:3, Funny)

          Everything else is just a cost so you're best getting rid of that pointless, expensive R&D.

          Except HP is doing massive R&D... those printer cartridges don't become unrefillable and prematurely unusable on their own.

    • by metlin ( 258108 ) *
      Well, yeah, I guess, kinda-sorta, in a way, I suppose. Actually, come to think of it, maybe not. Or maybe I just am not sure.

      I'm confused. :-\
    • Woo hoo! It got insightful, but it should be funny too. Take the damn fence post outta yer arse management!
  • by Anonymous Coward
    I produced a better product than he was trying to force me to accept in the original timeframe. Still wasn't enough for him, the sabotoge continued. Rather than sit there and watch my my career languish I chose to get the hell out of Dodge to far greener pastures.

    When I left he was tasked with producing a product which was at least as good as mine and couldn't even come close. The sr exec who litterally could not be fire resigned within months of my departure.

    If you are reading this, fuck you.
    • Re: (Score:3, Funny)

      by Bin_jammin ( 684517 )
      You worked for Dodge? Which one of the catastrocars did you work on?
    • I produced a better product than he was trying to force me to accept in the original timeframe. Still wasn't enough for him, the sabotoge continued. Rather than sit there and watch my my career languish I chose to get the hell out of Dodge to far greener pastures.
      If you had said "General Motors" or "Pontiac" instead of "Dodge", I would have asked you if your first name was "Zachary"...
  • by rice_web ( 604109 ) on Friday February 02, 2007 @03:48AM (#17855962)
    "In a recent IndustryWeek article, Mathew Hayward, assistant professor at the University of Colorado, does a Q&A on his new book, "Ego Check: Why Programmers' Hubris Is Wrecking Companies And Careers And How To Avoid The Trap", which shows how programmers' inflated egos can impact what they decide to produce, when they will produce it, and in what language and with what buzzword they will create it in. What failures (colossal or otherwise) have you been involved in that could be attributed to Programmers' Hubris?"
    • by khallow ( 566160 ) on Friday February 02, 2007 @07:58AM (#17857112)
      I suppose the exercise is insightful, but programmer hubris is curable. You can always fire them or (in less enlightened parts of the world) just take away their computer. Executives have more power, can do more damage, have access to far more of the business's resources, and are more often not monitored or audited properly.
    • If programmer hubris is ruining a company, the executives are at fault for not firing them.
    • What failures (colossal or otherwise) have you been involved in that could be attributed to Programmers' Hubris?

      Certainly not Daikatana. Romero wasn't a programmer.

      But seriously, I have yet to see any national failure of any product or company because the developers were too egotistic in its design. In fact egotistical developers led us to many grand products and software packages. Mostly open source and free.

      Whereas executive hubris usually leads to failed products and failed companies.
    • It's all a question of scale:

      Damage from programmer's fuckup < Damage from designer's fuckup < Damage from manager's fuckup < Damage from executive director's fuckup

      Reciprocally the cost of fixing the damage goes the other way around (bigger for executive director, smaller for programmer).

      Note that the pay scale in most companies follows the same order as the "how much does it costs us when you fuckup" scale.

      The justification for paying the big bucks to executive directors is that they're very spec
  • Back in 2000 (Score:5, Interesting)

    by beadfulthings ( 975812 ) on Friday February 02, 2007 @04:22AM (#17856110) Journal
    It's sad to watch the ruin and downfall of a perfectly good company. The one I worked for back in 2000 tore itself apart due to (how can I put it politely)...a mutual circle of self-gratification on the part of its senior management. They were totally blinded to the industry trends at that time by their own egos, and they reacted to the external threats and forces in a way I can only characterize as sick. Their loud self-praises utterly drowned out the realities of what was going on, and it was scary to watch. Even the annual planning meeting, attended by a cast of thousands, degenerated in fall of 2000 into a venue for them to strut onstage to ear-splitting music to the wild applause of their captive audience of hired help. Folks were a bit put off by that speech session, and the response was to forbid us from leaving the hotel on pain of being fired. That ensured that we'd be captive for the evening sessions.

    By spring of 2001 these same VP's were screaming at us during massive company-wide phone conferences; the gist was that we, the people, were responsible for the alarming nosedive the company was taking. The layoffs began shortly thereafter, and by August I had taken my rather-nice severance and moved on, having decided to work for myself. (I still do.) By December of that year it was mostly all over, though the company limps on today in a pitifully truncated form.

    I remember thinking a lot in those days about Nero fiddling while Rome burned, but the proverb I remember considering most was, "As a dog returneth to his vomit, so a fool repeats his folly."
    • by Ihlosi ( 895663 )
      a mutual circle of self-gratification on the part of its senior management. They were totally blinded to the industry trends at that time by their own egos, and they reacted to the external threats and forces in a way I can only characterize as sick.

      Why ... that's the difference between a manager and an entrepreneur. A manager may put his own interests ($$$) before the company, because he can just switch companies (and, heck, get a nice compensation package while doing so) once the supply of $$$ in his pre

    • Re: (Score:3, Funny)

      by DuctTape ( 101304 ) *
      Whoa, you've described about every company that went bust back then. Except my company. The CEO was deathly afraid to release product, thinking he'd have one chance and one chance only, so he kept putting it off, still grubbing for more money (and diluting our shares). I think they still haven't released.

      DT

    • Re: (Score:3, Funny)

      by udderly ( 890305 )

      Some years back, I worked in a department of a Fortune 100 company that produced weekly sales circulars. Even though the average level of experience in the dept was well over 10 years, our egomaniacal and clueless boss insisted on having twice daily production meetings where she would circle "glaring errors" with a red marker.

      The funny thing is that at the end of the week the circular was exactly where it had started and she didn't even know it.

      • Monday: "Replace picture A001 with A002."
      • Tuesd
  • GEC/Marconi (Score:5, Interesting)

    by the_womble ( 580291 ) on Friday February 02, 2007 @05:12AM (#17856314) Homepage Journal
    British slashdotters will have heard of the classic example: GEC, which changed its name to Marconi.

    The management decided that they did not want to be running a boring business (making everything from lifts to generators), however profitable it was. So they, during the dotcom boom, they decided to refocus on telecoms equipment.

    So they spent the multi billion pound cash pile they had on buying telecoms equipment manufacturers.

    This was not enough, so they sold off all those boring businesses and spent that on more acquisitions.

    They then borrowed heavilly to make even more acquisitions.

    Come the bust, lenders wanted their money back. Needless to pay, all those expensive acquisitions were not making enough money to pay them with. Creditors eventually agreed to swap the debt for something like 99% of the equity.

    A little fragment of the company is still around, calling itself Telent. All that is left of what was once one of the biggest companies in Britain.

    I may be wrong in attributing it to hubris, it could be just stupidity, but given the nature of the businesses sold an bought it certainly looks like the main motive was not being boring.
    • Re: (Score:3, Interesting)

      by sgt101 ( 120604 )
      Well, also quite a lot of the company is part of BAE Systems...

      But you are right, a dumb set of decisions, the end of a great organisation. Personally I blame the bankers for that - the delivery of cash on the basis of a belief in the management team and a business plan based on wishful thinking should have got the people concerned boiled in oil. Instead I'd like to bet it got them BMW 7 series and mansions in Surrey.

      Another great British example is of course Rover. A three year chase for a new model to sav
      • by chthon ( 580889 )

        You can blame the bankers, but the bank only gives money when they know they can win on both sides. Either you have a good businessplan and you can pay back your loan with interest, or you have enough assets, in case you fail, they can seize the assets. If you do not have assets, they won't loan any money.

  • "Democrats... In league with worldwide terrorism"?

    "Global warming... just a theory?"

    "George Bush.... Best President, Ever?"
  • ... military. Nothing can screw things up like some idiot Commander that has to "leave a mark" or "make changes" for an evaluation. Naturally this would include the Commander in Chief...
    • by DG ( 989 ) on Friday February 02, 2007 @10:12AM (#17858058) Homepage Journal
      Having had direct experience with both the military and civilian flavours of this, I can say that the private sector has the military utterly cold on this.

      As bad as a commander on a rampage can be - and don't get me wrong, I've seen some doozies - nothing can top the reality distortion field that accompanies having a great deal of cash and no oversight.

      Everybody in the military reports to *someone*, and while it may take a little while, eventually those chickens will come home to roost. Those limits simply don't apply to private enterprise, especially to small-midsize companies where the owner/president is effectively God and can do whatever the hell he wants.

      DG
      • Re: (Score:2, Insightful)

        by R2.0 ( 532027 )
        I concur. I work with a gentleman who was a Colonel in the Special Forces when he retired, and took a position in logistics at a Very Large Non-Profit Organization. He has never really been able to adjust to the fact that there is really no "chain of command" such as he is used to; no one will make a decision, people shown on the TO as under his authority don't report to him, and no one has any compunction about bypassing anyone else and going over their heads. He desperately WANTS his superiors to give
      • by Anonymous Coward
        in the military
        everyone has guns
        the fog of battle and all that

        it is difficult to beat a boss to death with a keyboard
        i did have one fire me once because he claimed i tried to run over him with a forklift
        i did not
  • by svunt ( 916464 ) on Friday February 02, 2007 @07:44AM (#17857030) Homepage Journal
    My own experiences with hubris in management mostly consists of newcomers in high positions thinking that some management experience meant that they knew every industry better than those non-executives with 30 years experience. Being able to spell KPI does not an expert make! Humble (and goo) managers spend their first few months (at least) learning about the industry & company they're in. The rest come in and start hiring, firing, spending, slashing, basically making a lot of 'impact' without the first clue about the consequences. This is called "being pro-active"
  • I seem to recall that, at one point, Germany had Great Britan completely cut off from incoming supplies. All they needed to do was maintain the siege and Britan would have fallen. The story, as I understand it, was that Hitler wanted to show Germany's air superiority so, against the advice of his staff (including Goering [sp?]), he sent in his Stutka's to take London. Problem is, they were no match for the British Spitfire - which could outfly and outdive the Stutka. By shifting Germany's resources to a
    • The story, as I understand it, was that Hitler wanted to show Germany's air superiority so, against the advice of his staff (including Goering [sp?]), he sent in his Stutka's to take London. Problem is, they were no match for the British Spitfire - which could outfly and outdive the Stutka. By shifting Germany's resources to a tactical campaign where he was outmatched, Britan was able to eventually break the siege.

      This may well be true; the story I heard is that things started to fall apart once Hilter shi

      • I remember hearing about this in 20th Century History. It's been about 5 years, but if I remember correctly, the professor suggested that the switch from strategic targets to civilian targets allowed British factories to continue to produce materials necessary for warfare/defense. For example, I believe he gave the example of a simple ball bearing factory being critical to Britain. Had the Germans continued to bomb strategic targets such as this factory, the British would have been unable to produce part
    • The reasons for the blockade failure were the buildup of escorts by the Canadian Navy, the US lend-lease and the capture of a German Enigma machine.

      http://en.wikipedia.org/wiki/Battle_of_the_Atlanti c_(1939-1945)#The_.27Happy_Time.27_.28June_1940_.E 2.80.93_February_1941.29 [wikipedia.org]
    • by smithmc ( 451373 ) *

      I seem to recall that, at one point, Germany had Great Britan completely cut off from incoming supplies. All they needed to do was maintain the siege and Britan would have fallen. The story, as I understand it, was that Hitler wanted to show Germany's air superiority so, against the advice of his staff (including Goering [sp?]), he sent in his Stutka's to take London. Problem is, they were no match for the British Spitfire - which could outfly and outdive the Stutka. By shifting Germany's resources
  • Yes... (Score:3, Interesting)

    by Junta ( 36770 ) on Friday February 02, 2007 @09:36AM (#17857696)
    I see people in management make regular stupid decisions, usually based on their views without listening to more qualified expertise.

    I don't know what happened internal to Sony, but it seemed like hubris in the theory that 'PS1 and PS2 dominated, therefore we can do whatever the hell with PS3 we want and people will just automatically buy it, let's make it really expensive and try to have it float our HD optical media format.'

    In more personal hubris where I work, I see very very good technical input on the qualities and shortcomings of various products ignored by execs. Going out the door a particular software was needed, and the technical team evaluated the solution liked by management (third party software that lacked functionality and would be very costly) or what another division within the company had developed, which was much more comprehensive and advanced, and, we thought, business execs would like that we could honestly recommend the cheaper way to go that preserves the most profit for the company and make things happy. However, the third party had salespeople, took execs out to dinner and sweet talked them to go out with the shitty product. It seems that personally winning over an executive frequently trumps concrete information on a product.

    Also, they have been trying *so* hard to move into less technical stuff. They want to do business consulting so they just get to focus on the bullshittery of executive and management without dealing with anything non-bullshittery. It's probably orgasmically exciting to them to think about the prospect of many people *paying* to be bossed around by them, and of course logical, they are *such* great leaders people *should* pay for the privilege. Evidently, despite great efforts to do so, there isn't much uptake on other companies who think they are too stupid to do basic management, imagine that. In the face of a successful segment of the business and the flopping business consulting, they repeatedly screwed over the people doing real work to try to get that miserable stuff up. I haven't heard much lately about it, so I'm getting the impression that someone got the message that the business consulting market is either not that big, or that no one is interesting in paying to listen to these executives say how they think a business should be run.

    Now execs/managers aren't the only ones to suffer from hubris. Probably everyone in their role can thoroughly screw up due to hubris, but it seems that executives are less likely to be shitcanned for stupid stuff, and up the chain the 'punishment' for fucking up to the point of being ousted means a multi-million dollar payoff. That combined with the natural implications of being a leader within a company means a single exec's hubris can do so much more damage with very little accountability, and that makes it all the worse.
    • Upper management was convinced that rather than writing decent software they should just "throw hardware" at the problem. So they threw lots of $25K Compaq Pentium Pro WinNT 3.51 servers at the unholy mix of 16-bit MFC and COBOL code they bought from another company (who used the $millions to write something modern). If you're familiar with that generation of Intel hardware and Microsoft software you'll know why that strategy didn't work so well. When sales came in well short of expectations, they downsi
  • The SCO Group?

    How can it be that no-one has mentioned them yet? Apart from the (equally obvious) reason being that hardly anyone cares that they are going down the proverbial drain...
    • by sconeu ( 64226 )
      I'd say Lucent and HP top the list, and golly gee, it just so happens that the executive responsible is the same in both cases!

      Hi Carly!
      • I think Carly illustrates the problem is perhaps not hubris, but the complete lack of disincentives for failure. Screw a couple of formerly great companies into the ground and what do you get? Tens of millions of dollars and lucrative consultuing and speaking engagements. WTF? Anybody not a board level who scews up like that ends up flipping burgers.
        • Currently, there is seldom anything to ensure that these people leave the company in a sustainable state.

          Fix:

          Every day, grant a small amount of stock which vests 5 years later. The stock continues to vest even after they leave. Thus they start getting paid 5 years after they show up, and continue to get paid for 5 years after they leave. If they work from 2002 to 2009, they get paid from 2007 to 2014.

          Maybe have multiple vesting periods: X shares that vest in 6 months, 2X shares that vest in 18 months, 2X sh
  • What colossal failures have you seen that could be attributed to Executive Hubris?

    Apple Lisa

    IBM PS/2 line of computers

    Microsoft Vista

    These are the Edsels and DeLorians of our age.

    And now I shall run away very fast, faster than a flying chair...

    • by smithmc ( 451373 ) *

        IBM PS/2 line of computers

      More specifically, the Micro Channel Architecture. (Or, at least, the decision to keep MCA closed.)

  • Lead to more time be spend on unless paper work then making things work better. Also taking code by lines of code leads to bloated code as no wants to end up with and - number of lines.
    • by tedgyz ( 515156 ) *

      Lead to more time be spend on unless paper work then making things work better. Also taking code by lines of code leads to bloated code as no wants to end up with and - number of lines.

      I THINK what you were trying to say is that beauraucracy ruins companies (e.g. TPS reports). Is the other comment referring to bugs per line of code? At HP we used to joke about adding lots of useless code to improve our metrics - a variation of the Dilbert joke "I'm going to code myself a minivan!"

  • Enron and Worldcom. And that cable company where the pres and his family dipped regularly in the till.
  • by whitroth ( 9367 )
    And in addition to what others have already said, let me point out all the companies where the CEOs downsized (or, as I prefer, undersized) until the market stopped rewarding their actions by increasing the value of their stock options, never mind the effect on the company or its customers.

    I've come to the conclusion that modern American "free market" businessmen are among the greediest, most thoughtless class of wealthy people seen on this planet since the French took objection to theirs two hundred and a
    • by smithmc ( 451373 ) *

        I've come to the conclusion that modern American "free market" businessmen are among the greediest, most thoughtless class of wealthy people seen on this planet since the French took objection to theirs two hundred and a few years ago.

      Riiight, 'cause this sort of thing never happens anywhere else...

  • In nearly all of the companies I have worked for the affect of an IT executive/managers decision based wholly or partly on ego has had a negative impact on what software, hardware, consultant, and employee options were selected.

    However none of my experience has been as clearly devestating as the amazingly inept antics of the former CEO of a company formerly known as Candesa*.

    Short version: My brother in law was the development manager, was one of the founders of the company, and usually produced profit from
  • All you have to do to find out is to look at The SCO Group. It may not financially ruin the company, but boy, that reputation sure precedes them.
  • Jobs is pretty arrogant, yet he completely saved Apple. His distinct "my way or the highway" attitude turned the company around.

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