In his well-known work, How the Mighty Fall, Jim Collins described hubris as the first stage of decline. This is when the past successes of a company have been transformed into a sense of all-knowing or entitlement. Add to this the element of luck, that some company’s success is attributable more to chance than by design, and hubris can be more than just damaging. It can be downright deadly…yes, a corporate deadly sin.
We’ve all been exposed to companies and leaders like this. Too great to fail (not by the government’s deciding, but of their own belief). Too talented to listen to others. Too awesome to pay attention to metrics and other “hard” indicators that success may be waning. Too preoccupied with their own image as an industry leader to sense that the industry has passed by them. And in an era of ever more rapid change, to fall behind is usually to simply fall…never to regain the prominence or success of the past.
So what’s behind hubris? What causes it, and how do we recognize it in ourselves and out leaders? Here are some (certainly not all) of the indicators of organizational hubris:
1) Habitual overinflation of performance – Whether one it describing organizational financial performance or the performance ratings of employees, if there is a tendency to downplay weaknesses or focus almost exclusively on successes and strengths, excessive pride may be at play.
2) Leadership over-importance – Without question, strong leadership is key to any organization. But when leaders begin to view their positions as synonomous or attributed to greater (or better) knowledge, it’s time to check the level of hubris in the organization.
3) Lack of shared sacrifice – Everyone’s seen the outrageous divergence of executive to worker compensation. Like it or not, that’s a reality. But if employee pay or bonuses have been halted because of financial difficulties, yet executive bonus and perks continue, hubris has turned to entitlement.
In 2011, Collins published his latest book (along with Morten Hansen), Great by Choice. In it he states (with regard to hubris, “Those who truly practice productive paranoia never feel they’re invicible; they always fear potential doom lurks just around the corner.”
That’s an important idea to grasp….it may help save your organization.