Book Review - Why Smart Executives Fail

I think I'll get the book.

Source of review: http://www.boardoftrade.com/bbro_page.asp?pageid=2596
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Published in Sounding Board, May 2006.
Dr. Owen A. Anderson

Why Smart Executives Fail and What You Can Learn from Their Mistakes — by Sydney Finkelstein (Penguin, 2004, New York)

This book focuses on failure and what you can learn from it. Author Sydney Finkelstein breaks the mold of most business books and writes about "worst practices" instead of best practices. His book profiles the seven habits of spectacularly unsuccessful people.

Habit No. 1
Many CEOs suffer from the illusion of personal pre-eminence and believe that they are personally able to control all aspects that will determine the company’s success or failure. Rather than scrambling to keep track of changing conditions, these CEOs succumb to this illusion and believe that they can create the conditions under which they and their company will operate.

Leaders who suffer from this illusion reveal this in the way they treat people. These leaders consider their employees as instruments to be used and materials to be molded. Business leaders who think this way often use intimidation and excessive behaviour to dominate the people who surround them.

Habit No. 2
Unsuccessful business leaders identify so completely with the company that there is no clear boundary between their personal interests and their corporation’s interests.

Habit No. 3
Ineffective leaders think they have all the answers. This is the image of executive competence that we’ve been taught to admire for decades. Movies, television shows and journalists continually offer us recognizable vignettes of dynamic executives making dozens of decisions a minute, snapping out orders that will redirect huge enterprises, dealing with numerous crises at once, and taking only seconds to size up situations that have obviously stumped everyone else for days. Generally these leaders are also control freaks who try to have the final say on everything their company does.

Habit No. 4
Unsuccessful leaders eliminate anyone who isn’t 100 per cent behind them.

Habit No. 5
Unsuccessful leaders are consummate company spokespersons and are obsessed with company image.

Habit No. 6
CEOs who succumb to this sixth habit tend to see obstacles as though they are minor difficulties, when many of them are, in fact, major hurdles. They constantly underestimate major obstacles. Executives who have achieved a string of successes are particularly prone to underestimate obstacles.

Habit No. 7
Unsuccessful leaders stubbornly rely on what worked for them in the past. Many CEOs on their way to becoming spectacularly unsuccessful accelerate their company’s decline simply by reverting to what they regard as the "tried and tested." These and many other high-flying CEOs failed, not because they couldn’t learn, but because they had learned one lesson all too well.

One of the most vital skills for a successful executive to have is the ability to create a learning organization. By studying mistakes and failures, we open up a window to learn not just what we shouldn’t do, but also what we should do. Smart executives succeed by learning from the mistakes of others, by understanding the underlying causes of failure and how to be alert to them, and by creating organizations that are open-minded enough to acknowledge and learn from their own mistakes.