128 Terry Fernsler Introduction Founder’s syndrome (Block, 2004; Mathiasen, 1983) is when one individual holds disproportionate power and influence in a nonprofit organization. Block and Rosenberg (2002) suggested that founder’s syndrome is not limited to the original founder of an organization; it can be evidenced in a particularly dominant executive director, especially when the board of directors cedes power to a charismatic leader and the success of the organization is wrapped up in the personality of the leader. Fast, Sivanathan, Mayer, and Galinsky (2012) found that power is like an elixir that surges through the brain, leading to the tendency to overestimate the accuracy of personal knowledge. When that dominant character allows power to control his or her ego, he or she discounts the legitimate views of others, losing sight of what leadership means. In effective nonprofit organizations, the executive director and the board of directors govern collaboratively (Chait, Ryan, & Taylor, 2011). This means that policy and responsibilities are mutually developed and enforced. If a charismatic executive director is granted too much power, it is up to the board of directors to check that power. In the following case, an executive director who took his organization to a new level of operation and was permitted disproportionate influence due to his charisma ignored a conflict of interest policy. The board of directors failed to govern appropriately. As a result, the reputation of the organization could have been seriously damaged. The Organization The organization was a small Habitat for Humanity affiliate in a western United States county of about 100,000 residents. Habitat for Humanity International is an international nonprofit organization that encourages communities to create local organizations affiliated with it. They are called affiliates rather than chapters because these local groups are fairly autonomous, but must meet certain standards to use the brand and remain affiliated with Habitat for Humanity International. Habitat for Humanity is an ecumenical, Christian-based nonprofit that relies largely on volunteers and contributions to build new homes for low-income families who otherwise would not be able to purchase a home. As a Christian, faithbased organization, this affiliate, like most affiliates, did not discriminate when seeking volunteers or when selecting partner families. However, its connections to religious congregations helped garner support. Congregations would sometimes sponsor a home, providing most of the volunteer labor and funding for the materials. This Habitat for Humanity affiliate had managed as a volunteer organization until the board of directors decided to hire a recently retired executive, Pete, from an international corporation that exerted economic and historic influence in the region. Pete’s connections that he gained in his years at the company helped him acquire in-kind contributions (such as building materials at a discount or free) and donations once he was at the Habitat for Humanity affiliate. He was able to garner support sufficient to begin a 10-home build site. This was far more houses than the affiliate had ever before been able handle simultaneously in the past.
When Founder’s Syndrome Is Used for Personal Gain 129 Reliance by Habitat for Humanity affiliates on volunteers is high, even by nonprofit standards. Volunteers were used not only for construction purposes, but also for fundraising, publicity, family support, family selection, and even administrative and legal tasks. There were volunteer opportunities for almost anyone who wanted to participate. These many stakeholders and a fairly vulnerable service population established a high bar of accountability (Grobman, 2018). Selected families partnered with the Habitat for Humanity affiliate by volunteering 500 hours before they could move into their Habitat for Humanity built home. By working in partnership with Habitat for Humanity and investing in the building process, partner families gained self-reliance, self-esteem, and new homemaintenance skills while earning decent, affordable housing. The homes were sold to partner families through a no-interest loan by Habitat for Humanity, based on expenses for the cost of material, land, and any professional services needed to meet building code. Construction was typical of any new house – all permits and codes (state, county and municipal), had to be met. The Habitat for Humanity affiliate worked with partner families to design the home to meet their particular needs, using one of a number of suggested designs as a basis. The affiliate acquired material and set regular workdays for construction. Volunteer recruitment was ongoing, for both the construction and support activities, and all committee activities. At the time of this case, this Habitat for Humanity affiliate had three employees: an executive director, a construction manager, and a newly hired development director. In addition, an office administrator volunteered three days a week because Pete preferred working on the construction site than in the office. All committees were volunteer-run at the Habitat for Humanity affiliate. While the executive director was to serve on all committees, Pete rarely needed to attend committee meetings, and rarely did. In fact, he often felt it unnecessary to attend even the board of directors meetings. Organizational Growth The energy Pete generated led to a desire by the board to increase funding and inkind esources to sustain and grow the success the organization was having under Pete: The Habitat for Humanity affiliate agreed to participated in a fundraising training that Habitat for Humanity International offered affiliates. The expense of the training and hotel space were paid by Habitat for Humanity International. Affiliates made their own investment by paying for travel expenses to and from the training. The affiliate board decided to send three representatives from the affiliate: Pete, the chair of the board of directors, and a yet-to-be-hired development director. The development director’s first responsibility, therefore, was to accompany the other two representatives to the training and then lead in the fundraising initiative’s implementation at the affiliate. Pete felt the training was a waste of time and that the Development Director could just go out and ask for support, particularly from foundations. The board, however, believed that fundraising was one of Pete’s weaknesses, which is why it decided to create a development director position in the first place. This was the
130 Terry Fernsler first time the board urged Pete to share his responsibilities and try to strengthen his skills. Mark, the Board Chair, was the City Attorney for the largest city in the county. In addition to his positional power, he held moral and persuasive power. While Pete was charismatic and could talk up a storm, Mark was more thoughtful, more soft-spoken and quicker on his feet (he was a lawyer, after all). Mark was more emotionally intelligent and less narcissistic than Pete, but Pete’s charisma won over many supporters to the affiliate. The board of directors admired Mark greatly, and most people in the community did as well. When he made a decision, you knew it was well reasoned and a sound decision. For example, when he decided the fundraising training would be a good investment for the organization, the board got behind it. Mark, who had served on boards of directors of nonprofit organizations previously, sensed this board needed to govern and oversee the activities of the executive director to a greater extent. As a lawyer, he knew the board of directors was legally accountable to the public. The new Development Director had no voice in the selection of the fundraising model because it was made prior to his involvement with the affiliate; Pete did not tell him of the training until the Development Director was hired. The Development Director initially had some skepticism about it himself; most trainings he had received in past positions were little more than sales pitches for the services of consultants of particular methods. He did not voice his reservations, however, being so new to the organization. After going through the training he was convinced that it could succeed at the Habitat for Humanity affiliate. He organized a development committee to plan and manage the activities in the initiative. Following the training, Mark was so sold on the technique he committed two board members to the new development committee created by the Development Director to plan and oversee the initiative implementing the fundraising model. He kept close tabs on the committee through these two board members. The two board members appointed by Mark included Jon, the chair of the committee. Jon was a former mayor of a smaller city in the county. Jon, like Mark, was also a person of high integrity and highly respected. He was committed to the mission of the Habitat for Humanity affiliate and really wanted the initiative to work. He served on the board of directors as Vice Chair. Mark also appointed Sandy, who was highly organized. She was appointed to add a voice of skepticism about the fundraising method. However, after a short time, as she saw the enthusiasm of the rest of the committee and how well the program was being managed, she became very engaged in the planning process herself and turned out to be skilled at planning publicity. The Development Director relied on Sandy to make sure all the details were considered. Of the other volunteers on the committee, one, Melinda had years of fundraising experience and some inflexible thoughts about how fundraising should be conducted. Several members of the development committee had difficulty working with Melinda, so the Development Director frequently had to serve as a buffer between her and those members, which he adroitly accomplished simply by giving Melinda the attention she craved. The Development Director would occasionally push back against Melinda’s inflexibility, but generally felt her incessant
When Founder’s Syndrome Is Used for Personal Gain 131 questions actually resulted in a very-well planned campaign. Betty, the office manager, volunteered for the committee, and the last committee member, apart from the Development Director himself, was a high school senior who needed to complete an internship before graduating from high school and heading to college. She was very passionate about Habitat for Humanity and brought a fresh perspective to the affiliate. Becky, the student, had many connections at her high school and although admitted to the Development Director that she did not always understand the discussions at the committee meetings, she learned much and ended up recruiting many volunteers from her high school’s Key Club. It was a somewhat rag-tag ad hoc committee that the Development Director was able to coordinate well and on which he insisted all participate. The fundraising model involved cultivating relationships with prospective and current supporters for the long term. The affiliate’s ten-house building site served as a unique opportunity to demonstrate how homes developed from the foundation to a completed house through guided tours. The completed home housed a family who had already moved into it and quite willing to explain to tour participants the difference the organization made in people’s lives. In spite of his displeasure with the new method to raise money, Pete filled a perfect role in the model. Since he was nearly always found on the construction site anyway, it was easy to get him to lead tours – he could explain the organization’s history better than anyone, and was a dynamic speaker. He enjoyed the attention and meeting people. His participation in the model dampened his opposition to it; although Mark’s strong commitment to making it work also encouraged Pete’s participation. The fundraising model was successful for the Habitat for Humanity affiliate because of diligent follow-up with tour participants. Over the course of ten months, voluntarism, which was vigorous before, tripled. Volunteers were encouraged to participate in many ways and ongoing partnerships developed with local building suppliers. The effort culminated in a fundraising breakfast event in which nearly 400 people attended. The breakfast netted just over $150,000 its first year, a total almost unheard of for a fundraiser in the community. Things seemed to be going well for the Habitat for Humanity affiliate. Financial and in-kind resources increased, voluntarism tripled, and more families could be served. One day shortly after the breakfast event, Jon asked the Development Director if he had heard any rumors about public displays of affection between Pete – who was married at the time – and the Construction Manager he hired, Lori. The Development Director had not heard anything about it and had no reason to suspect it could have been happening since he and Pete rarely spoke. The Development Director spent most of his time in the office or visiting prospective contributors while Pete spent his time at the construction site. It turned out the reason Jon asked was because he had found Pete and Lori in a compromising position behind one of the houses at the building site one day. He decided the other directors needed to know and took the matter to the board. With Pete’s supervisory role of Lori, it could create a conflict of interest. Conflicts of interest in nonprofit organizations relate to the duty of loyalty by key stakeholders of the organization, including the chief executive.
132 Terry Fernsler As representatives of the organization, they are expected to exercise power in the interest of the organization, not for personal gain (Hopkins & Gross, 2010). When personal interests conflict with organizational interests, board member, staff, and volunteer activities must be managed in the interests of the organization (BoardSource, 2007). A few members of the board admitted they were already aware of Pete’s and Lori’s affair, but had not raised the issue to the rest of the board. When the full board found out about the affair, Pete was asked to resign immediately because intimate relations between the executive director and staff could clearly lead to conflict of interest. Pete had not been transparent with the board, violating a written conflict of interest policy that required full disclosure of potential conflicts. In addition, as a Christian organization, an extra-marital affair violated the ethics of most stakeholders. However, pressure by Pete’s supporters led to the board asking Pete to name his successor. Pete urged that Lori replace him, and the board accepted, hoping that an immediate replacement during the crisis of a sudden executive director termination would be easier with someone familiar with the organization. Although Lori did not have all the necessary skills to manage the organization, Pete would still have a connection to and influence in the organization. The Development Director, who had successfully led the effort to increase revenue and voluntarism in only one year, resigned immediately after Lori was named Executive Director, citing ethical reasons. Lori lasted only a few months as Executive Director, resigning in a sudden expression of morality after Pete divorced and quickly thereafter married Lori. Board members who covered up the affair were replaced and the organization eventually found more transparent staff and recruited new board members more willing to follow their obligation to keep informed about the organization’s activities, participate in decision-making rather than ceding governance decisions to the chief executive, and act in good faith for the benefit of the organization (Hopkins & Gross, 2010). Thanks primarily to the high reputation of Habitat for Humanity affiliates everywhere and the local affiliate’s board of directors successfully suppressing public knowledge about the affair, the organization recovered eventually, but without the fundraising success it once had. Lessons from the Case Charismatic dominant executive director. Founder’s syndrome is characterized by a charismatic leader with legitimate power (power gained through title and position in an organization). Extraordinary personal presence distinguishes charismatic people from others. This typically includes physical appearance and powers of speech (Greenwald, 2008), and Pete had both. People who are charismatic leaders rely on the qualities of being good communicators, prestige, or significant achievements to their credit. Their influence can make charismatic leaders appear to transform an organization. However, legitimate power will sometimes lead to a desire for personal gain. The test of true charisma is whether the individual represents something beyond him or herself. Concern for others is the distinctive
When Founder’s Syndrome Is Used for Personal Gain 133 feature delineating true transformational leaders from pseudo-transformational ones. The difference between a transformational and pseudo-transformational leader is whether charisma is used to benefit the organization or the individual leader him- or herself (Bass & Steidlmeier, 1999). Bass and Avolio (1994) found charisma a necessary but not sufficient ingredient for transformational leadership. In other words, being charismatic does not mean a leader will be able to transform an organization. Obedience to the charismatic authority figure may help team members overlook where the leader’s interests primarily lie, especially if the figure’s personality is closely entwined with organizational identity, as can occur with executive directors of small nonprofit organizations. Charismatic people make a strong initial impression and are chosen for leader positions, but often fail because of overwhelming arrogance (Paulhaus, 1998) which may reflect insecurity about their abilities. For example, Pete seemed to be aware that his administrative skills were not strong and compensated by avoiding the office and committee meetings. Pete was able to make a strong first impression when the board of directors hired him, but his reliance on power over others was an attempt to mask his shortcomings. Sometimes pseudo-transformational leaders create unnecessary crises. They feel that the bottom is about to fall out of life, so they run from one emergency to another, and may even create them (such as by ignoring correspondence and meetings). Such individuals carry out virtually all everyday tasks with a sense of high drama. They like to live in a state of high alert and seem to relish being called upon to fix all those problems that are causing the crisis (Fusco & Freeman, 2007) drawing more focus to themselves. Pete was reactive to problems, not proactive, and then complained about the pressures of being the executive director. As others, such as Betty, staff, and the board of directors began to increase their responsibilities in order to be proactive, continual crisis management could no longer work for Pete to maintain authority. Many founders exercise paternalistic, autocratic, overzealous, and opaque leadership, making it difficult for other stakeholders to fully understand the organization. To deal with founders’ syndrome and ensure smooth operations Muriithi and Wachira (2016) recommend developing strong all-inclusive leadership, building employees’ capacity to attain desired competence, practicing professionalism, establishing workable structures, and succession planning mechanisms. Pete had formed his own little domain at the organization, as many executives of small nonprofits do in the name of efficiency. Pete was a person of action, not talk, and was so frequently at the construction site away from the office that a volunteer, Betty, agreed to be the office manager to prevent correspondence from languishing. Pete preferred putting out the “fires” at the construction site. He wanted to be the homebuilding “fixer,” and felt imposed upon when the board hired someone to help with fundraising, a weakness of Pete. Indeed, instead of developing a new role for himself in the organization, Pete subverted development efforts when he could because he felt threatened. His response led Mark to feel a need to assert his authority as board Chair. Lessons for groups. Power is not the same as leadership but is often a feature of it (Maccoby, 1976, 1981; McClelland, 1975; Zaleznik & Kets de Vries, 1975).
134 Terry Fernsler Power in organizations has three identifiable forms. The most familiar form is power over, which is explicit or implicit dominance. A leader’s dependence on this kind of power has costs in undermining both relationships with team members and goal achievement (Kipnis, 1976). A second form is power to, which gives individuals the opportunity to act more freely through power sharing, or what is commonly called empowerment. A third form is power from, which is the ability to resist the power of others by effectively fending off their unwanted demands. High status in a group carries the potential for all of these power forms. The source of power relied upon by a leader can change with circumstances. For example, Pete exercised power over staff and volunteers. He exercised power from the board of directors by remaining opaque – refusing to attend committee meetings and hiding potential conflicts of interest. Ludwig and Longnecker (1993) found that usually the most successful leaders suffer the worst ethical failures. In part, power leads to privileged access, providing more opportunities to indulge, and therefore requiring more willpower to resist. The dark side of institutionalized charisma can be seen in cases such as United Way of America (Eisenberg, 2011) and the National Rifle Association (Levine, 2019), in which the CEOs of each organization abused their positions of power for personal inurement. However, it took years, even decades before William Aramony of United Way and Wayne LaPierre of the National Rifle Association abused their power, and it came after they had many major successes. In those cases, the organizations were larger and more intricate than the much smaller and relatively informal Habitat for Humanity affiliate in this case, which helps explain Pete’s abuse of power occurring more quickly. Pete had also learned to use his charisma in his previous position. While Pete was not the founder of the organization, he had been given much authority by the board. The board members who knew about the affair between Pete and Lori did not feel it was necessary to check his power because he had been so successful in growing the organization. In turn, Lori enabled Pete’s behavior, first allowing boundaries between her and her supervisor to blur, and then particularly when she agreed to step up to the executive director position to please the charismatic Pete, even though she did not have the requisite skills and knowledge for the complexities of fundraising and finances needed in the position. A conflict of interest clearly arises where a supervisor has direct input into the terms and conditions of employment of his romantic partner. The potential for positive evaluations (or negative if the relationship sours) and bias in pay rates – and as in this case, even succession – is quite high. The knowledgeable board members allowed Pete too much authority because of his charisma. They did not talk openly about the potential conflict of interest – to Pete or to the rest of the board of directors. Lessons for the organization. Board members of nonprofit organizations have a duty of care to the organization they serve. This means each member must act in good faith and actively participate in governing the organization (BoardSource, 2010). This includes enforcing bylaws and policies. The organization had a conflict of interest policy that included reporting any potential conflicts, however the
When Founder’s Syndrome Is Used for Personal Gain 135 board members who knew about the relationship between Pete and Lori chose either to not abide by it or were unaware of the policy. Nonprofit Boards of directors also have a duty of obedience, which includes being guardians of the mission (BoardSource, 2010). Accountability is important in nonprofit organizations (Kearns, 1994), and Ebrahim (2010) explores what this means by asking: 1. Accountability to whom 2. Accountability for what 3. Accountability how. Boards of directors are accountable to those they serve: the organization’s stakeholders (Ebrahim, 2010). Nonprofit stakeholders include the board of directors itself, but also supporters and constituents in the community. Accountability for what includes sound financial management, governance, performance and progress toward the mission. Governance involves creating and monitoring bylaws and policies, both of which are created to carry out the mission (Ebrahim, 2010). Transparency and open communication are necessary for accountability in multi-stakeholder organizations. Stakeholders tend to be more sensitive to ethical decision-making in nonprofit organizations because the organizations are mission driven. Ethical decision-making becomes even more important in faith-based organization. Many stakeholders of the Habitat for Humanity affiliate were congregations that did not look favorably on adultery. The reputation of the organization – which is especially important for nonprofit organizations (Heller, 2008) – could have been ruined if the board had not successfully covered up the affair and relied on the moral brand of being affiliated to Habitat for Humanity International. As it was, the local affiliate lost a highly capable development director. Conclusion In this case, the executive director catalyzed tremendous organizational growth, relying on his charisma. He quickly built power in the organization and let his ego influence organizational decisions. Some board members allowed unethical behavior because of obedience to someone who they thought was a transformational leader. It was not until board members whose reputations were closely associated with the organization learned of the behavior that steps were taken to exert shared authority. Even then, those board members supporting the Executive Director held enough influence that the situation could be only partially corrected. Board and staff of nonprofit organizations have obligations to act in good faith in the governance of the organization. Sharing this responsibility requires transparency, but this organization’s executive director (and some of the board members) operated opaquely. When the board of the organization ceded too much authority to the Executive Director, it lost a valuable resource (the Development
136 Terry Fernsler Director) and for a time had to operate under fear of being exposed to community stakeholders with high moral expectations. Nonprofit boards have the responsibility to enforce the duties of care and obligation. It is incumbent on veteran board members and the executive director to ensure new board members understand their obligations and to report any questionable behavior. When a founder, or a leader with founder authority, abuses power for personal gain, shared responsibilities require transparent decision-making. References Bass, B. M., & Avolio, B. J. (1994). Transformational leadership and organizational culture. The International Journal of Public Administration, 17(3–4), 541–554. Bass, B. M., & Steidlmeier, P. (1999). Ethics, character, and authentic transformational leadership. Leadership Quarterly, 10, 181–127. Block, S. R. (2004). Why nonprofits fail. San Francisco, CA: Jossey-Bass. Block, S. R., & Rosenberg, S. (2002). Toward an understanding of founder’s syndrome: An assessment of power and privilege among founders of nonprofit organizations. Nonprofit Management and Leadership, 12(4), 353–368. BoardSource. (2007). The nonprofit board answer book: A practical guide for board members and chief executives (2nd ed.). San Francisco, CA: Jossey-Bass BoardSource. (2010). The handbook of nonprofit governance. San Francisco, CA: Jossey-Bass. Chait, R. P., Ryan, W. P., & Taylor, B. E. (2011). Governance as leadership: Reframing the work of nonprofit boards. Hoboken, NJ: John Wiley & Sons. Ebrahim, A. (2010). The many faces of nonprofit accountability. In D. O. Renz (Ed.), The Jossey-Bass handbook of nonprofit leadership and management. San Francisco, CA: Jossey-Bass. Eisenberg, P. (2011, November 22). The death of a flamboyant charity wrongdoer sends a reminder to regulators. The Chronicle of Philanthropy. Retrieved from https://www. philanthropy.com/article/A-Charity-Scoundrel-s-Death/157497 Fast, N. J., Sivanathan, N., Mayer, N. D., & Galinsky, A. D. (2012). Power and overconfident decision-making. Organizational Behavior and Human Decision Processes, 117(2), 249–260. Fusco, G. M., & Freeman, A. (2007). The crisis-prone patient: The high-arousal cluster B personality disorders. In F. M. Dattilio & A. Freeman (Eds.). Cognitive-behavioral strategies in crisis intervention (3rd ed., pp. 122–148). New York, NY: Guilford Press. Greenwald, H. P. (2008). Organizations: Management without control. Thousand Oaks, CA: SAGE. Grobman, G. M. (2018). An introduction to the nonprofit sector: A practical approach for the twenty-first century. Harrisburg, PA: White Hat Communications. Heller, N. A. (2008). The influence of reputation and sector on perceptions of brand alliances of nonprofit organizations. Journal of Nonprofit & Public Sector Marketing, 20(1), 15–36. Hopkins, B. R., & Gross, V. C. (2010). The legal framework of the nonprofit sector in the United States. In D. O. Renz & Associates (Eds.), The Josssey-Bass handbook of nonprofit leadership and management (pp. 42–76). San Francisco, CA: Jossey-Bass.
When Founder’s Syndrome Is Used for Personal Gain 137 Kearns, K. P. (1994). The strategic management of accountability in nonprofit organizations: An analytical framework. Public Administration Review, 54(2), 185–192. Kipnis, D. (1976). The powerholders. Chicago, IL: University of Chicago Press. Levine, M. (2019, August 2). Another voice says something is rotten at the NRA. Nonprofit Quarterly. Retrieved from https://nonprofitquarterly.org/another-voice-sayssomething-is-rotten-at-the-nra/ Ludwig, D. C., & Longenecker, C. O. (1993). The Bathsheba syndrome: The ethical failure of successful leaders. Journal of Business Ethics, 12(4), 265–273. Maccoby, M. (1976). The gamesman, the new corporate leaders. New York, NY: Simon & Schuster. Maccoby, M. (1981). The leader; A new face for American management. New York, NY: Simon & Schuster. Mathiasen, K. III. (1983). The board of directors is a problem: Exploring the concept of the following and leading board. Washington, DC: Management Assistance Group. McClelland, D. (1975). Power: The inner experience. New York, NY: Irvington. Muriithi, S., & Wachira, D. (2016). The Founders’ syndromes, challenges and solutions. Researchjournali’s Journal of Entrepreneurship, 4(4), 1–11. Paulhus, D. L. (1998). Interpersonal and intrapsychic adaptiveness of trait selfenhancement. Journal of Personality and Social Psychology, 74, 197–1208. Zaleznik, A., & Kets de Vries, M. F. R. (1975). Power and the corporate mind. Boston, MA: Houghton Mitflin.
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Chapter 13 How to Destroy a Research & Development Group without Really Trying Jay L. Brand Abstract This chapter illustrates the consequences that can result from a mismatch between leadership style and organizational contexts required to encourage genuine investigation and exploration – particularly in topical areas relevant to the enterprise’s business model. This cautionary tale suggests not only that leadership approaches need to complement the necessary conceptual challenges involved in rigorously defining relevant problems and strategies in order to sustain organizational success; ideally, it should also align with the strengths and goals of the teams led. Thus, a senior marketing, communication and sales leader may not support the creative research and evidence-based, user-centered design necessary to nurture innovation within, for example, a future-oriented research and development team. Such cultural misalignments have been well framed by classical theories of leadership as well as by empirical comparisons of enduringly successful companies with more transient corporations. Keywords: Employee engagement; humane management; intrinsic motivation; learning organization; McGregor’s Theory X and Theory Y; organizational psychology Dedicated to describing and analyzing instances of leadership gone wrong in the hope of thereby illuminating and clarifying characteristics of good leadership in contrast, this volume constitutes an ideal forum for the following story. Although the details are accurate to the best of my memory and ability, they’re almost certainly incomplete, and the names have been changed to protect both the innocent and the guilty … When Leadership Fails: Individual, Group and Organizational Lessons from the Worst Workplace Experiences, 139–146 Copyright © 2021 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-80043-766-120211013
140 Jay L. Brand Introduction The tale I will share serves to indict far-too-typical leadership practices in many organizations. Although I would not question the integrity or good intentions of many if not most corporate leaders, I believe that even accurate evidence for strategic decisions – if it merely reflects financial considerations – can distract leaders from the priority of optimizing the quality of human experience. As Amabile and Kramer (2011) reminded us, the moment by moment attitudes, beliefs, perceptions, and even moods of employees have a salient influence on the quality of their interactions with colleagues as well as with customers – interactions that can result in winning or losing clients and can thus impact the ubiquitous “bottom line.” Many senior executives may scoff at the suggestion that they might be responsible for the “inner life” of their employees – especially due to the variety and frequency of what they may consider much more important decisions. Yet I would maintain that if “opportunity costs” are considered, then the quality of employees’ subjective experience holds the key to initiating, nurturing, and maintaining innovation – increasingly recognized as the only path to sustainable global competitiveness. Background The following incident occurred during my time with an international corporation headquartered in Southwest Michigan. Some background and context may prove to be helpful. My immediate supervisor, the individual most involved in hiring me, managed to persuade the relatively small group of senior executives that the company needed some vanguard explorers who could anticipate the future needs, interests, and preferences of clients, thus providing evidence-based guidance to corporate strategy so that it could stretch “just over the horizon.” To use a metaphor that oversimplifies his recommendation, he enjoined that their current myopic focus on cost-benefits analysis, supply-chain management, material efficiencies, coordinating logistics and managing operations might eventually result in their becoming better and better at designing, manufacturing and marketing wagon wheels. The Story Prior to my arrival, the group – consisting of several industrial designers, two writers/editors, a machinist, and one or two manufacturing engineers – set about to create a knowledge road map for their organization. They persuaded the company to give them space for exploration, rapid prototyping, active experimentation (in the try-it-out, action-research, self-as-user style), and informal dialog. To their credit, the company gave them quite a large, relatively unfinished space that encouraged writing proverbs and potentially relevant maxims from Architectural gurus, futurists, business strategists, and environmental activists all over the walls. Soon filled with cushy/comfy sofas from goodwill, this environment – almost by itself – convinced many visiting client groups of the company’s dedication to creatively “future-proofing” prospective partnership with their organization.
How to Destroy a Research & Development Group without Really Trying 141 One of the writers/editors began inviting notable scientists and strategists to visit with the group in their informal “warehouse” space for a few days. All of these luminaries provided very interesting, relevant information, but no one in the group had extensive experience in designing, conducting and interpreting the kind of rigorous, human-centered research required to adequately guide future product design and development. Approximately at this moment in time, due to my wife’s insistence that we leave Southern California and move back to her home in Michigan, I responded to this group’s placement of a job opening in the Human Factors and Ergonomics Society’s bulletin. That same day, I received an invitation to interview with the company and joined their R&D group soon after. In the ensuing months and years, the group continued to hire several competent scientists and researchers, occasionally adding a member internally (e.g., from Market Research). Our group manager eventually boasted 18 or 19 team members dedicated to experimenting about the future for this growing, global enterprise. We almost gleefully set out to understand a host of issues ranging from familiar Ergonomics concerns to the difference between the influence of organizational culture and national culture (e.g., for employees working for an American firm located in China). Due to clients’ inordinate interest in these matters, we focused extensively on the many factors that contribute to “knowledge worker productivity.” We designed and created several tools for collecting data online (e.g., surveys measuring group cohesiveness, employee engagement, quality of work life) and linked these outcomes, as best we could, with the products and services provided by the corporation (although I’m convinced that any relationship between the physical environment and employee outcomes is almost entirely mediated by psychosocial concerns; cf. Brand, 2008; Brand, 2017). At work, typically over bag lunches, we often watched fascinating documentaries depicting the rise of innovative firms that grew from largely garage-based start-ups to global behemoths (e.g., Xerox PARC, Microsoft, Apple). Although I wouldn’t claim that we ever reached such admirable levels of creativity, innovation and success, we did manage to “move the needle” on the company’s reputation as innovative among some of their most important constituencies. The company still retained many unenlightened management tools (e.g., annual performance reviews; scrutiny of every expense report and its accompanying receipts), but our group leader had an intuitive sense of more advanced practices, such as democratic design-making, participative management (Walton, 1986), the importance of interdisciplinary collaboration and exploration (DeGraff & Quinn, 2007), and the primacy of intrinsic over extrinsic motivation (Vallerand, 2000). Although rarely, members of our group did actually win contracts from large corporations merely because their decision-maker(s) happened to attend one of our professional seminars. In an effort to abbreviate a rather long story, our R&D group eventually expanded to include client consulting; we welcomed team members in São Paulo, London, Shanghai, Melbourne, New York City, Los Angeles, Dallas/Ft. Worth, Atlanta, Chicago, and San Francisco – many of whom were already architects, designers, or workplace consultants. Among many other accomplishments, we developed innovative measurement technologies to decipher social networks,
142 Jay L. Brand strategic programming (an Architectural technique to align the built environment with its human users’ needs, interests and preferences), and visually oriented applications for our company’s products, securing several patents and publishing in scientific journals along the way. During this time, our primary group leader remained, but two or three additional, more sales-oriented managers were added to coordinate client consulting globally; however, my hiring supervisor insisted on focusing primarily on product design and development, and he hired, internally, a manager to drive that emphasis. As a matrix organization, the company frequently involved all of us in more client-facing activities than determining successful future products would allow, so we often felt like Janus – with an internally directed R&D “face” and an externally facing consulting one. Inflection Point This mostly invigorating narrative came to a screeching halt one day in the following way. Briefly, the Vice President (VP) in my “up-line” scheduled a voice conference with all the members of the group. I participated via mobile phone driving to the airport to fulfill a speaking engagement with a high-profile client and their Architectural partner. In fewer than 5 minutes, she shared that our manager (the one hired internally by my original supervisor, whom we all really liked and appreciated due to his very laissez-faire management style, perfect for engaging our highly competent, self-motivated group) was being replaced with someone whom we didn’t know. She then promptly ended the call and that was that. There were no preceding or subsequent conversations, no requests for input, no exploration, no interest in our perspectives, no prior notice, no rationale, no reasoning or attempt at strategic context for the decision – nothing! None of us ever had an opportunity to give anyone any feedback of any kind – either regarding our then-previous manager or his dubious replacement. Additionally, the new manager was inappropriate to lead our group for several obvious reasons. He turned out to be a very hierarchical micro-manager who knew much less than any of the members of our group about the level of research and consulting we were involved in, yet he managed to position himself as the “source” of our knowledge to his superiors within the company. In his defense, I would speculate that upon being hired, he had received a mandate from senior management to “reign in” or at least re-focus that weird, irrelevant R&D group, in an inappropriate attempt to directly link our activities to current sales and client services. Of course, such a drastic shift to sales support from R&D completely destroyed all of our intrinsic motivation. Endeavoring to find a “silver lining” on this cloudy replacement manager, I confess that he did once share with me a strategy that convinced the CEO to hire a few more client consultants by framing the need for these team members within the core values expressed in the company’s official statement of vision, mission and priorities. I thus admit that it’s possible to learn something from almost anyone – even an otherwise mostly unenlightened autocratic manager. Due to a number of subsequent missteps (e.g., our group’s internal HR consultant breaking confidence with one member of our group who complained
How to Destroy a Research & Development Group without Really Trying 143 to her about our new manager; her immediate response to the concerns was to talk to our new manager about the issues – which had been shared confidentially), essentially all but one of the members of our team left the company for other abundant opportunities. Admittedly, the “financial bean counters” at the company may have believed that getting rid of our professional payroll actually helped the company – at least reducing its fixed costs; but in terms of investment in R&D (e.g., innovation) and “future-proofing” the organization, I would conservatively estimate that they lost at least half of their futurist perspective and potential. Other than one individual whom I hired (an Architect with a PhD who has subsequently been laid off), all of those who could design, plan, and conduct credible research left. In an attempt to portray the company in the best possible light, they did hire a competent Global Director of Research a few years after our R&D team was decimated, but he primarily works with Marketing Research in advisory roles; no real user-centered research has been conducted internally for a very long time – perhaps a decade. I even continue to suspect that the relevant VP, as she had been hired from a nearby competitor, actually served as a successful “mole” – inserted stealthily by our rival firm; perhaps something even more sinister may have been afoot (cf. Babiak & Hare, 2006). I suppose I should have anticipated this misfortune years earlier. I once scheduled a meeting with this relevant VP at the invitation of my manager when he refused to grant me a raise I felt I deserved (in my 16 years with the company, my average annual raise was less than 2% of my salary – clearly less than inflation). Although I assumed I came to the meeting well-prepared, with examples of peer-reviewed journal articles, scholarly book chapters (featuring the company’s products in pictures to illustrate ergonomics design principles), and other accomplishments, she responded, “Jay, those [publications] are meaningless to me.” Subsequently, I realized that what she meant was that to squeeze any value out of those knowledge resources, I would need to develop “marketing-friendly” materials for the company that our dealers could use to associate the information conveyed with company products and services in a manner that potential customers could quickly and easily understand. However, in retrospect, her general disdain for scientific research should have clarified her priorities for me much earlier than the “epic failure of leadership” described above. Interpretation and Implications Absolutely every relevant aspect of this decision careened exactly 180° opposite of an ideal approach as might be mandated by an enlightened leader (Brand, 2020; Dipboye, Smith, & Howell, 1994). McGregor’s (1960) classic distinction between “Theory X” and “Theory Y” of management would characterize this incident and the process of its implementation as reflecting most if not all of the disadvantages of “Theory X.” Although perhaps a bit dated in his writing style, McGregor (1960) brilliantly argued that these two approaches to leadership differed primarily in terms of their assumptions about employee motivation. “Theory X” leaders assumed that employees have no reason to contribute to organizational goals
144 Jay L. Brand unless influenced by various “carrots” (e.g., a promised bonus for meeting a sales quota) and “sticks” (e.g., threats of punitive measures for missing work, deadlines or goals). In this view, employees naturally tend to be lazy unless externally driven by instrumental means (e.g., rewards and punishment). In contrast, “Theory Y” leaders operate on the assumption that employees generally want to perform well, to learn, to grow, and to contribute to organizational success. Unless discouraged or dissuaded by toxic or dysfunctional circumstances, most employees remain intrinsically motivated, especially by meaningful accomplishments and recognition for achievement. “Theory X” treats employees as “cogs in the machine” who basically do what they’re told, while “Theory Y” accepts that employees are unique individuals motivated by creative, fulfilling responsibilities, and thus often consults them regarding how to improve their roles. Additionally, this episode ignored both Edward Deming’s (Gabor, 2000) belief that the information critical for improving quality is primarily distributed among workers, and Chester Barnard’s (Gabor & Mahoney, 2013) contention that morality and persuasion based on strong rationales should be core values for any executive. Furthermore, this unfortunate experience disregarded Drucker’s (2011) belief that in order to do something new you have to stop doing something old, Peter Senge’s (1990) call for “Learning Organizations,” and Govindarajan’s and Trimble’s (2010) description of protecting investment in innovation without damaging current operations (cf. Govindarajan, 2016). Finally, much if not most of the advice contained in the primary resource that might applaud our VP’s decision, “Re-engineering the Corporation” (Hammer & Champy, 2005), would require careful qualification and thoughtful clarification – not only for ethical and indeed moral reasons, but also based on the inevitable impact on prospective financial performance. Any student of organizational psychology could elaborate extensively on this leadership failure, but in an effort to provide a simple, practical yet powerful model to elucidate its occurrence, imagine an ellipse framing two prominent focal points in tension. Label one of these foci humane consideration and the other financial stewardship. The importance of leaders simultaneously prioritizing these two often competing goals has been recognized for almost four decades (cf. Ouchi, 1981; Peters & Waterman, 1982). Yet leaders often exhibit dogmatic adherence to presumed strategies at their command simply due to prerogative (cf. Kerr, 1995). In many cases, such decisiveness emphasizes the preservation of capital over the growth and development of people – sacrificing one of these crucial foci to the other. In this regard, most organizations do not understand much less measure opportunity costs, so any trimming of future creativity or innovation potential in the name of cost effectiveness goes largely unnoticed except for its immediate, positive impact on the “bottom line.” Additionally, an enduring, engaging corporate culture requires careful tending and continual, dynamic attention over many years (Quinn, 2011), but a few moments of autocratic neglect can destroy its advantageous inertia (Groysberg, Lee, Price, & Cheng, 2018). A meaningful, fulfilling organizational culture takes years of intentional effort and discipline to develop, and even small doses of apathy, of taking such affirming conditions for granted, can rapidly discourage the most gifted of teams.
How to Destroy a Research & Development Group without Really Trying 145 Conclusion In closing, I will summarize Gabor’s (2000) helpful outline of De Geus (1997) four characteristics that invariably seem to distinguish enduring from transient enterprises: 1. They display a genuine sensitivity to and concern for their environment. 2. As socially cohesive firms, they provide a strong sense of organizational “community” and identity – i.e., they nurture “a feeling of belonging to a social system.” Although lifetime employment is not guaranteed, new leaders are often promoted from within rather than outside, and employee tenure is embraced, rather than representing an aberration. However, in addition, these companies tend to be highly selective with regard to “new hires” – those individuals who will influence their future culture. Thus, longevity does not dissolve into complacency. Although occasionally the values and needs of an individual and company priorities may become irreconcilable, a strong “psychological contract” in these firms assures “that there is at least a statistical probability of lifetime employment.” 3. These companies also reflect a high tolerance for the internal challenges associated with change. They appear to be especially “tolerant of activities on the margin: outliers, experiments, and eccentricities within the boundaries of the cohesive firm.” 4. Finally, these long-lasting firms tend to be financially conservative, focusing on good monetary stewardship and the preservation of capital. Notice that the first three of these factors relate either directly or indirectly to the humane consideration foci of the ellipse model I framed earlier, and the fourth encompasses financial stewardship. No successfully enduring institution or organization can long ignore any of these competencies. Comparing these features with the inadequate leadership behavior described in this chapter may be enlightening. First, our VP discounted her environment, which valued creativity, innovation, and evidence-based design solutions – evidence not likely to arise from elsewhere in the company. Second, she not only flouted but embodied opposition to the second characteristic – she hired an unknown middle-manager from outside the firm, and the CEO hired her from a competitive organization. Thus, an affirming culture of trust based on “hiring internally” got doubly snubbed. Third, this VP’s frequent marginalizing (and, incidentally, the CEO’s as well) of the research, investigation, and critical exploration that defined our R&D group resulted in almost continual pressure from the ubiquitous need to drive current sales, a misplaced anxiety usually deadly to the deep learning necessary for refreshing strategy (Wergin, 2019). Wergin’s helpful term constructive disorientation which involves balancing natural curiosity with the disequilibrium necessary to displace complacency provides a fair description of our team’s contributions – not only inside our company but within the entire industry. Regrettably, a failure of leadership prematurely ended our delightful sandbox experience, silencing our advocacy of designing to optimize human experience.
146 Jay L. Brand References Amabile, T., & Kramer, S. (2011). The progress principle: Using small wins to ignite joy, engagement, and creativity at work. Cambridge, MA: Harvard Business Review Press. Babiak, P., & Hare, R. D. (2006). Snakes in suits: When psychopaths go to work. New York, NY: ReganBooks. Brand, J. L. (2008). Office ergonomics: A review of pertinent research and recent developments. In C. Carswell (Ed.), Review of human factors and ergonomics (Vol. 4, pp. 245–282). Santa Monica, CA: Human Factors and Ergonomics Society. Brand, J. L. (2017). Health and productivity effects of hot desks, just-in-time work spaces, and other flexible workplace arrangements. In A. Hedge (Ed.), Ergonomic workplace design for health, wellness, and productivity (pp. 341–352). Boca Raton, FL: CRC Press. Brand, J. L. (2020). Leadership and organizational dynamics. Journal of Applied Christian Leadership, in press. De Geus, A. (1997). The living company. Boston, MA: Harvard Business School Press. DeGraff, J., & Quinn, S. E. (2007). Leading innovation: How to jump start your organization’s growth engine. New York, NY: McGraw-Hill. Dipboye, R. L., Smith, C. S., & Howell, W. C. (1994). Understanding industrial and organizational psychology: An integrated approach. Fort Worth, TX: Harcourt. Drucker, P. (2011). The practice of management, rev. ed. London: Routledge. Gabor, A. (2000). The capitalist philosophers: The geniuses of modern business – their lives, times, and ideas. New York, NY: Times Business. Gabor, A., & Mahoney, J. T. (2013). Chester Barnard and the systems approach to nurturing organizations. In M. Witzel & M. Warner (Eds.), The Oxford handbook of management theorists (pp. 134–151). Oxford: Oxford University Press. Govindarajan, V. (2016). The three‐box solution: A strategy for leading innovation. Boston, MA: Harvard Business Review Press. Govindarajan, V., & Trimble, C. (2010). The other side of innovation: Solving the execution challenge. Boston, MA: Harvard Business Review Press. Groysberg, B., Lee, J., Price, J., & Cheng, J. Yo-Jud. (2018). The leader’s guide to corporate culture: How to manage the eight critical elements of organizational life. Harvard Business Review, reprint R1801B. Hammer, M., & Champy, J. (2005). Reengineering the corporation: A manifesto for business revolution. New York, NY: HarperCollins. Kerr, S. (1995). On the folly of rewarding A, while hoping for B. The Academy of Management Executive, 9(1), 7–14. McGregor, D. (1960). The human side of enterprise. New York, NY: McGraw-Hill. Ouchi, W. (1981). Theory Z: How American management can meet the Japanese challenge. New York, NY: Basic Books. Peters, T. J., & Waterman, R. H. (1982). In search of excellence: Lessons from America’s best‐run companies. New York, NY: Harper & Row. Quinn, R. E. (2011). Mastering competing values: An integrated approach to management (pp. 75–84). In J. S. Osland & M. E. Turner (Eds.), The organizational behavior reader (9th ed.). Boston, MA: Prentice Hall. Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. New York, NY: Currency Doubleday. Vallerand, R. J. (2000). Deci and Ryan’s self-determination theory: A view from the hierarchical model of intrinsic and extrinsic motivation. Psychological Inquiry, 11(4), 312–318. Walton, M. (1986). The Deming management method. New York, NY: The Berkley Publishing Group. Wergin, J. F. (2019). Deep learning in a disorienting world. Cambridge: Cambridge University Press.
Chapter 14 When Leading the Team Goes Wrong Dayne Hutchinson and Sholondo Campbell Abstract This chapter revisits and examines the experience of working with a new senior level administrator who failed to understand their role on the team. This was further compounded by the administrator’s inability to establish trust and rapport, assimilate into an established organizational culture, and empower staff. Additionally, this administrator’s style could best be described as managing instead of leading. This failure to assess and learn the group dynamics of the team resulted in a lack of buy-in and a visceral decrease in team morale. Change was swift and fast, but not transformational. Within 14 months of the hire of the new senior administrator, two office support staff assistants resigned and four of the six associate/assistant directors within the office resigned. Within two years, the senior administrator resigned. The authors will provide remedies that will assist future leaders in similar situations in making better decisions, as well as provide examples of ways to connect with staff and implement change together. Keywords: Change management; organizational culture; supervision; group dynamics; leadership; student affairs Introduction Leading a team can sometimes be difficult, especially when one comes into an organizational culture, that is, established, productive and cohesive. Hackman, Wageman, and Fisher (2009) assert that team leadership within itself, is not a singular act, but a team activity (p. 202). Being an effective team leader, within the context of higher education, means taking the time to develop a personal relationship with one’s staff, listening, learning, finding common ground and including the team’s feedback in decision-making. This chapter revisits and examines the experience of working with a new senior level administrator who failed to understand their role on the team. When Leadership Fails: Individual, Group and Organizational Lessons from the Worst Workplace Experiences, 147–156 Copyright © 2021 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-80043-766-120211014
148 Dayne Hutchinson and Sholondo Campbell This was further compounded by the administrator’s inability to establish trust and rapport, assimilate into an established organizational culture and empower staff. Additionally, this administrator’s style could best be described as managing instead of leading. Leadership describes one’s ability to influence others, to motivate them and to move the needle on both their thoughts and actions (Kuk & Banning, 2016, p. 2). Effective leadership is often depicted through the institution or organization’s ability to achieve success. In achieving this success, leaders must consider the roles of their followers, or team as integral to achieving shared goals (Kuk & Banning, 2016). Over the years, research has shown that strong teams add value to an organization, and that when leaders recognize that their subordinates can help in leading a team, productivity and staff moral increases (Katzenbach & Smith, 2015; Lee, Gillespie, Mann, & Wearing, 2010). Shared leadership speaks to everyone’s involvement in achieving the team’s mission, and involves the ongoing emergence of multiple team members, with skills that specifically align with the tasks at hand (Pearce & Conger, 2002). Decisions that are made on behalf of the team from the top down, without getting feedback from the bottom up, often times lead to trouble (Shipp & Kim, 2014, p. 5). This was exactly the case when a Senior Student Affairs Officer (SSAO) was hired to lead a team of six student affairs officers at varying stages of their careers. The team did not work together in the same physical office space, but had regular, virtual team meetings via Skype. This particular team was very close knit. One’s ability to do their job depended on the sharing of information and working closely together. The synergy of the team was disrupted when a leader was hired who did not value the team’s relationship, and as a result, team members felt as though they were on the outside looking in. While the team was involved in the hiring process of the new leader, the final decision was left to the Vice President for Student Affairs. There were significant gaps in the onboarding process of this new leader, with subordinates often times having to teach this leader how to do the job effectively. The team quickly began to realize that the leadership style of this new leader was not one that valued collaboration but one that was rooted in the positionality of power to drive change. When a SSAO inherits a team they did not hire or pick, they must make a conscious effort to build trust, learn the team culture and to listen. Winston and Creamer (1998) assert that in order for staff development and supervision to work, the establishment of trust and an open relationship between staff members and a supervisor must exist. They further state that employees must believe that their supervisor has their best interests in mind and prioritizes their success (p. 37). In the SSAO’s attempt to establish and maintain their power, they simultaneously diminished the team’s voice and, in some cases, its performance (Tost, Gino, & Larrick, 2013). The process of building trust is one that takes time. One must recognize that high performing teams are high performing because there is a culture of teamwork and shared understanding of the mission at play. A new leader must take the time to get to know each member of the team singularly and personally, to best assess what the staff member’s role on the team is. Teams with new leadership oftentimes understand that change is inevitable. Ones positionality to power
When Leading the Team Goes Wrong 149 cannot be the driving force behind decision-making, or gaining the buy-in of staff. Using power as blunt force leads to tension, conflict and eventual group resentment (Shipp & Kim, 2014, p. 5). This chapter will outline how a high functioning team of six changed over the course of two years. Within 14 months of the hire of the new senior administrator, two office support staff assistants resigned and four of the six associate/assistant directors within the office resigned. Within two years, the senior administrator resigned. This chapter will provide tangible examples of these failures across the intersection of individual, group and divisional leadership. The authors will provide remedies that will assist future leaders in similar situations in making better decisions, as well as provide examples of ways to connect with staff and implement change together. Background Breakdown of the team. The department consisted of a team of six student affairs practitioners who were located at campuses throughout the State. The department was charged with developing and delivering student affairs programing to distance students based on their geographic regions and online. Historically, the Director of the department would be at a seventh location, which was the flagship campus for the institution. The team met on a bi-weekly basis via video chat – and later, desktop webcam software – with the Director meeting one-on-one with team members on alternating weeks. Additionally, the team gathered twice a year for a departmental retreat, as well as participating in the Division’s annual training and development session. Though there was great geographic distance between them, the team was often described as cohesive and having strong communication and relationships. The team could also be described as diverse in a number of ways, including race/ ethnicity, age and professional experience. Experience levels ranged from individuals who had joined the team immediately following the completion of their graduate studies, to those who had served in the field for over 15 years. Though in the past, individuals in the department had moved on to other roles, there was never a sense of these exits happening due to frustration or team members needing to “escape.” It was widely understood that all of these exits were due to either relocation or an obvious opportunity for advancement. Former team members often remained closely connected, and would re-convene for holiday parties and conference calls long after their employment had ended with the institution. Timeline The Director of the department moved on, and for a substantial time, the team operated without someone formally in the position. During this time, the responsibilities of the Director were divided between the two most senior team members, who were later reclassified to Associate Directors. Operationally, the department continued to function at a high level, and was often praised – publicly and privately – for the work they were doing to enhance student life in their respective areas.
150 Dayne Hutchinson and Sholondo Campbell Individuals from other departments often joked that there was no need to fill the Director vacancy, and this belief seemed also to be held by the senior leaders of the Division as the initial search committee for a replacement was disbanded at an advanced stage in the process. After almost two years, a new SSAO was brought into the Division of Student Affairs at the institution. This SSAO had oversight of a number of areas including this team. Since there was no Director of the department, the Associate Directors reported directly to this SSAO in weekly virtual one-on-one meetings. Additionally, the SSAO was in attendance at the bi-weekly team meetings via webcam. Nevertheless, this was viewed initially as an opportunity for them to get to know the team and develop greater understanding regarding the nature of their work. Prior to the start of the SSAO’s tenure, the Associate Directors were called in a meeting with the Vice President for Student Affairs, who again commended them for the work that the team had been doing, while stating they felt that the current structure and processes were working very effectively and believed they should be kept that way. However, this was not reflected in the reality of the department under the new SSAO. After about five weeks in the position, the SSAO stripped away the responsibilities that had been assigned to the Associate Directors. This was without any explanation being provided beyond the repeated statement “I just work better that way.” This also negated the recently updated position descriptions the Associate Directors had received with their reclassifications. The Associate Directors were relegated to providing administrative support for those responsibilities. This often resulted in projects being handed to them at the last minute whenever the SSAO was overwhelmed by their primary responsibilities, which included managing the student conduct process for the university. The Associate Directors requested an opportunity to clarify the new expectations, especially given the fact that their position descriptions more closely aligned with the expectations they had previously discussed with the Vice President for Student Affairs. After receiving no response from the SSAO, they requested a meeting with the Vice President which would include the SSAO as they felt that this would have been the best way to clearly articulate how the team would be moving forward. Their meeting request was initially ignored by the Vice President. After repeated requests for clarification – especially given the fact that the position descriptions and the reality of the situation were becoming further misaligned – the Vice President finally responded via the SSAO that there would be no meeting and that the Associate Directors needed to simply “do your jobs because you’re being insubordinate.” Other patterns emerged which contributed to members of the team experiencing a negative shift in the environment. This included the SSAO’s insistence on being copied on all correspondence to other departments within the Division and the University. Additionally, the team – which had historically been commended for having strong communication – felt that they were losing their ability to partner remotely and collaborate on various multicampus projects. This was primarily due to the fact that SSAO needed to be invited to participate in, and direct, all video chats. Team members were routinely and intensely questioned about why they were having virtual meetings with each other, when these often
When Leading the Team Goes Wrong 151 were related to mundane topics such as walking through the submission process for merchandise invoices for student organizations. Staff were often approached by team members from other departments who refused to communicate with the SSAO due to the fact that they found them to be argumentative and condescending in their initial interactions. This often put the team members in the difficult position of having to find a diplomatic way to convey the fact that they were no longer allowed to make any decisions without the SSAO’s permission. With any change in a department comes a natural transition period as team members adjust to the new dynamics. This includes new leadership and communication styles, shifting responsibilities and the introduction of different personalities. Amado and Ambrose (2018) describe this transition as a psychosocial process, which requires proactive management by leaders. However, for this team the challenge was exacerbated by the fact that there was no communication from the SSAO regarding the new expectations, until team members were individually or collectively reprimanded for not meeting those expectations. A few years later – most of the team members have all moved into leadership positions within higher education, and outside of it. As we reflect upon this specific situation, we ask ourselves the following questions: What Lessons Did We Learn as Individuals? We learned how to be better supervisors. As professionals now with the responsibility of supervising other professional staff members, we learned the value of people, and how to be better supervisors through our own lived experiences with management. We learned the importance of relationships, and how valuable that is in the field of student affairs. In this same light, we learned that in order to supervise people, one has to genuinely care about them. One must recognize and value the person behind the work, and as supervisors, listen to language both spoken and unspoken in the workplace. Arminio and Creamer (2001) outlines the qualities of a high quality supervisor: (a) a relationship between supervisor and staff is required, this relationship should be genuine, honest and rooted in employee growth and competence; (b) supervisors must walk a fine line between being present in the lives of their reports, but not be overwhelming – allowing their staff space and autonomy over their work and personal lives as it relates to the job; and (c) the work environment must be supportive, and all-encompassing of the values of quality supervision across all levels of leadership (pp. 42–43). The timeline above provides many examples of how quality supervision as posited by Arminio and Creamer (2001) were not realized in our experiences, which contributed to decisions of team members leaving for other opportunities or the field all together. We learned to manage up. We learned that in order to accomplish one’s goals, there is a certain level of managing up that comes into play. Everyone isn’t meant to focus on the small details. Realizing this sooner than later, can have a significant impact on your happiness at work and interpersonally. This does not mean you should not ask for help, when needed – but one should consider how you frame that ask when you do. Managing up also means that you recognize
152 Dayne Hutchinson and Sholondo Campbell and identify potential issues before they arise and take precautionary steps to circumvent them before getting your supervisor involved. Additionally, managing up means you have spent the time learning about your supervisor, to better anticipate their reactions and questions to best provide solutions in advance. Von Bergen, Soper, and Licata (2002) posit that through managing up, we build the kinds of relationships with our supervisors that can lead to mutual success (p. 70). The process of managing up requires additional labor outside of the routine realities of just doing our jobs, but is critical to moving projects along smoothly, avoiding conflict, and miscommunication. Von Bergen et al. (2002) further asserts that, “effective workers recognize this function as a legitimate part of their jobs; they must establish and manage relationships with everyone on whom they depend and interact-including administrators” (p. 70). We learned the value of a strong support system. Being a student affairs professional is emotionally taxing, as a lot of what we do deals with managing students who are at different stages of their personal development. Having a support network of professionals in the field, supportive co-workers, and strong relationships with family and friends helps with alleviating anxiety and dealing with workinduced stress. Leaning on these support networks can help in your own process of figuring out your place in the organization, understanding organizational politics and prioritizing your self-care. What Lessons Can Others Learn From Our Experiences? Recognize when a system is broken, and call attention to it. As members of a team, you absolutely have the right to call attention to the ways decisions are being made, and how those decisions affect you. If your supervisor’s actions erode your confidence in your ability to do your job, and if they lecture you in public, this is a clear indicator that some change is needed in your working relationship. In their study on attrition from student affairs, Marshall, Gardner, Hughes, and Lowery (2016) found that the role of the supervisor and institution fit were significant contributors to staff’s decision to leave. Participants in the study described, among other things, poor supervision, incongruence with organizational culture and conflicts with supervisors as factors that influenced their decision to leave the field of Student Affairs all together (p. 155). If you are currently experiencing some of these as described, the question then becomes, how does one approach having this conversation with their supervisor without being fearful that it will be used against them in the future? This is never an easy question to answer; nevertheless, the question is inevitable. The first step is to formalize your thoughts and remove your personal feelings. When you approach your supervisor, focus on the facts and the details. Outline the effects of their actions, and their impact on your ability to do good work. The second step is to document your experiences. When did it happen? What was the context? Who was around when it happened? How did it make you feel? Documenting your experiences not only protects you, but can also be helpful in organizing your thoughts and informing additional follow up conversations if needed. Lastly, you should be prepared to escalate the situation to human resources, when you feel it is safe to do so.
When Leading the Team Goes Wrong 153 Recognize that your mental health is paramount. The emotional toll of working in an environment that requires significant amounts of mental energy, both to do your job and to support the students you work with and advise can be taxing. This emotional stress, if left unattended this can lead to significant staff burnout. Burnout, as defined by Maslach and Jackson (1981) is “a syndrome of emotional exhaustion and cynicism that occurs frequently among individuals who do ‘people work’ of some kind” (p. 99). When an organization becomes unhealthy, and frankly toxic, you must do your level best to ensure your peace and protect your mental health. Employ healthy strategies to manage stress and decompress from work. If your organization offers an Employee Assistance Program utilize this service to find a therapist if you do not already have one. These services are usually free and confidential. Therapy can help with setting goals, setting boundaries at work, identifying triggers and formulating a plan for you to continue showing up at work as your authentic self. Recognize when it is time to leave, and do it. A supervisor’s intentionality with staff professional development and growth are critical areas to realizing positive outcomes in supervisory relationships (Saunders, Cooper, Winston, & Chernow, 2000). When these necessary components are missing, it can create uncomfortable spaces. Oftentimes as professionals, when there is a negative organizational change at work, specifically within student affairs, our first instinct is to sacrifice ourselves and our happiness for others. We sometimes believe it is best to tuck our heads, and keep moving along. Organizational change is not always a bad thing, sometimes change is needed to prove to ourselves that we have also changed, and for us to fully grow into the professionals we want to become, means moving out, and starting anew. Recognize the value you bring to an organization, and allow yourself to be present in the process of finding an organization that recognizes the value in you, too. What Can the Organization Learn From Our Experiences? Clarity early brings confidence later. Steps should always be taken to ensure that everyone who will be impacted by a transition has the same understanding of how the process will unfold. People tend to be more supportive of an initiative if they played a role in creating it. Research related to communication climate supports this idea. In a study by Neill, Men, and Yue (2019) the researchers concluded that in an environment where communication features an element of openness and participation, employees tended to have stronger identification with the organization, and were more positive in their reaction to changes. While it is not always feasible to have all parties convene to discuss the expectations, there was clearly a disconnect between what was communicated to the Associate Directors by the Vice President and what ultimately happened when the new SSAO came onboard. The Vice President’s reluctance to engage in discussion allowed what could have been a simple misunderstanding to escalate into a harmful conflict that eroded the confidence and effectiveness of a previously high performing team. When the Vice President did finally respond, it came from the SSAO; which cast doubt on what message was actually sent. A simple email copying everyone involved
154 Dayne Hutchinson and Sholondo Campbell would have sufficiently bridged this gap. The expectations may have shifted. However, the relatively short interval between the communication of these conflicting strategies, combined with the SSAO’s dismissive responses regarding these shifts, warranted clearer communication. Pay attention to the feedback you receive during the hiring process. This starts with ensuring that the search and screen committee represents all or most of the functional areas that are supervised and/or have significant interaction with a key position the organization is looking to fill. There were no members from any of the departments supervised by the SSAO position involved in the search committee. Additionally, interaction between team members and candidates during the search process was limited to about 35 minutes in a roundtable. Even then, first impressions indicated to everyone who had an opportunity to participate in the process that there were other candidates in the field who were better suited – both in temperament and qualifications – to manage all of the areas and personalities that would fall under the SSAO’s purview. Themes or concerns that emerge consistently during the search process are generally good predictors of candidate behavior and performance in the long term. As Reigle (2014) points out, current employees provide the best examples of the traits we are looking for, or trying to avoid, in new employees (p. 183). Interview questions and scoring templates can be developed simply by utilizing what we know about best and worst team members within any organization. The extent to which a hiring manager incorporates the feedback of current staff – particularly, those who will work most closely with the position being filled – will make the difference between a successful hire, and one that sets the organization back significantly. Don’t ignore the warning signs. A major or sudden decline in performance. Significant employee turnover. Historically non-disruptive employees suddenly “acting out” and facing multiple disciplinary sanctions. Each of these on their own provides an indication of some degree of poor health in an organization. However, the presence of all three of these simultaneously should signal that something has gone seriously awry. Organizational climate can be defined as the meaning people attach to collective and interrelated experiences they have at work (Schneider, Ehrhart, & Macey, 2013). Organizations facing instances of these negative or downward trending issues must do a careful examination of the existing culture. This often requires asking hard questions and having uncomfortable conversations. It also means being prepared to address and rectify any of the underlying causes once the process of inquiry uncovers them. Conclusion As we advance in our careers and learn to navigate the ins and outs of higher education, it should be an expectation that one will be led by many different people, with many different leadership styles. One’s early experiences in the field, will shape the foundation for their own career, and in turn, formulate the basis for how one will supervise professional staff, when the opportunity to ascend into a leadership role arises. Unfortunately, the experience we detailed above is one many of our colleagues know all too well. These experiences are often isolating,
When Leading the Team Goes Wrong 155 demoralizing, and can sometimes feel like an attack on our work and our existence within the workplace. The symptoms of this can show itself in a variety of ways, and can eventually lead to staff resentment, anger and a lack of motivation. In this case, team members started exploring exit strategies much earlier than they had initially planned, leading to a mass exodus within the department over a short-time period. The attrition also included the SSAO, who left the institution within two years of starting the position. The execution of change on any scale requires that leaders secure buy-in from those who will be required to implement the changes. It is far easier to accomplish a goal, if all members of the team are working toward shared priorities. Additionally, leaders should always strive to, whenever feasible, create opportunities for members of the team to provide input into the direction of the project. As the old adage goes – people will be more invested in the success of an initiative if they have had a role in its creation. Taking the time to ensure that all team members understand the vision early on, as well as the ways in which their work will support it, ultimately positions the team for sustained success in the future. References Amado, G., & Ambrose, A. (Eds.). (2018). The transitional approach to change. London: Routledge. Arminio, J., & Creamer, D. G. (2001). What supervisors says about quality supervision. College Student Affairs Journal, 21(1), 35–44. Hackman, J. R., Wageman, R., & Fisher, C. M. (2009). Leading teams when the time is right: Finding the best moments to act. Organizational Dynamics, 38(3), 192–303. Katzenbach, J. R., & Smith, D. K. (2015). The wisdom of teams: Creating the high‐ performance organization,. Boston, MA: Harvard Business Review Press. Kuk, L., & Banning, J. H. (2016). Student affairs leadership: Defining the role through an ecological framework. Sterling, VA: Stylus. Lee, P., Gillespie, N., Mann, L., & Wearing, A. (2010). Leadership and trust: Their effect on knowledge sharing and team performance. Management Learning, 41(4), 473–491. Marshall, S. M., Gardner, M. M., Hughes, C., & Lowery, U. (2016). Attrition from student affairs: Perspectives from those who exited the profession. Journal of Student Affairs Research and Practice, 53(2), 146–159. Maslach, C., & Jackson, S. (1981). The measurement of experienced burnout. Journal of Occupational Behaviour, 2(2), 99–113. Neill, M. S., Men, L. R., & Yue, C. A. (2019). How communication climate and organizational identification impact change. Corporate Communications: An International Journal, 25(2), 281–298. Pearce, C. L., & Conger, J. A. (2002). Shared leadership: Reframing the hows and whys of leadership. Thousand Oaks, CA: Sage. Reigle, D. A. (2014). Hiring the right employees. The Journal of Medical Practice Management: MPM, 30(3), 183–186. Saunders, S. A., Cooper, D. L., Winston, R. B., & Chernow, E. (2000, March/April). Supervising staff in student affairs: Exploration of the synergistic approach. Journal of College Student Development, 41(2), 181–191. Schneider, B., Ehrhart, M. G., & Macey, W. H. (2013). Organizational climate and culture. Annual Review of Psychology, 64, 361–388.
156 Dayne Hutchinson and Sholondo Campbell Shipp, J. E., & Kim, J. (2014). The gateway to cultural competence: The implications of leadership and gender on the student affairs organization. Focus on Colleges, Universities & Schools, 8(1). Tost, L. P., Gino, F., & Larrick, R. P. (2013). When power makes others speechless: The negative impact of leader power on team performance. Academy of Management Journal, 56(5), 1465–1486. Von Bergen, C. W., Soper, B., & Licata, J. W. (2002). Managing your administrator. Educational Forum, 67(1), 70–80. Winston, R. B., Jr, & Creamer, D. G. (1998). Staff supervision and professional development: An integrated approach. New Directions for Student Services, 1998(84), 29–42.
Chapter 15 No Rest in the Restroom: Servant Leadership and Conflict in Products & Marketing Timothy Hough Abstract Two of the many requirements for being a Servant Leader are compassion and understanding. In this chapter, the author examines the individual, group, and organizational lessons learned after a verbal confrontation between two executives in the lady’s restroom. The author examines what can happen when Servant Leadership fails and how, when people move up the stages of conflict, they get further away from the foundational elements of being a Servant Leader. Keywords: Conflict; leading by example; servant leadership; marketing; servant leadership failures; conflict escalation process Introduction The year for the company had started very strong. Sales and profits were up. Our products were gaining traction in the market, and we were winning deals against our biggest competitor. All that changed on the day that we received a phone call from our largest customer telling us they were pleased with our services but had decided to go another direction to save on their expenses. The Story The blow hit the organization like a bolt of lightning. No one in the company saw it coming. For the next few weeks, the executive team met daily to discuss where we could reduce variable costs within the company. Each leader proposed cuts within their departments, and each of the other executives agreed with the When Leadership Fails: Individual, Group and Organizational Lessons from the Worst Workplace Experiences, 157–165 Copyright © 2021 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-80043-766-120211015
158 Timothy Hough reductions and asked if the cuts could go any deeper. Toward the end of the conversations, one executive was asked what she intended to cut, and her response was, “I cannot cut anything, and actually, I would like to add staff to my team.” This statement floored all of the other executives. How could the Products and Marketing department not have any cuts? We were eliminating most of our development capabilities, and even if the products team had new products they wanted to bring to market, there were no resources actually to do the work. Each of the executives tried to make their case that cuts needed to occur throughout the entire organization. Still, the Products and Marketing executive would not budge and would not put forward any cuts. The talk in the hallways between the executives centered on how we were going to convince the Head of Products and Marketing to cut where she needed to cut. We also commiserated on how we were frustrated with the conversations leading up to this point. Our President called a lunch meeting with all of the executives except for the Head of Products and Marketing. During the lunch, the President proposed cuts to the Products and Marketing budget and asked if any of the other executives had any suggestions on where cuts should occur. At the end of the lunch, we had put together a budget that cut out almost every variable expense within the company. The morning after the lunch meeting, the President laid out all of the cuts, including the new cuts to the Products and Marketing group. The Head of Products and Marketing said she could not agree with the cuts to her department. This resulted in the President of the company stating the cuts were going to happen, and the Products and Marketing team would need to adapt their plans based on the new budget. After the executive team finalized the budget cuts, the group sat with the Managing Partner and CEO to outline the cost savings and get his feedback. The CEO was pleased with the proposal, but stated: “unfortunately, these cuts do not go deep enough for us to hit the profitability target we need to hit for this year.” Upon hearing this, the executive team realized the only way to stay profitable was to reduce our permanent workforce. The weight of this decision hung heavy in the room. In our 100-year history, we had never had a reduction in force, and we did not want to be the executive team that was responsible for people losing their jobs. We were all asked to take the night and to come back in the morning with our recommended staff cuts. After the meeting adjourned, a small group of the executive team met to discuss how we would handle the meeting the next day. We kept asking if we thought the Head of Products and Marketing would propose cuts. We had worked ourselves up into expecting the Head of Products and Marketing not to make any staffing cuts, and we all began to plan for the expected battle that would ensue around this topic. The next morning, the executives sat around the board room table, and each person gave their recommended cuts. When it came time for the Head of Products and Marketing to make a recommendation, she put a series of names forward. After many conversations, we agreed with how many people and who from each department would be removed from the company. In total, 8% of the workforce was selected for reduction, and our Vice President of Human Resources started outlining the plan on how we would cut.
No Rest in the Restroom 159 For the two weeks before the date the reduction was to occur, the executive team had met daily to discuss the transition and backup plans and to get an update from HR on the process and the cost of performing the reduction. Each day every executive would be asked what they had done the previous day to make the reduction go as smoothly as possible, and each day, every executive gave their update. Two days before the reduction event was supposed to occur, the entire executive team went through the plan step by step. There were a few items that needed to be covered before the meetings with the staff occurred, but everyone seemed to feel like we were on track. Everyone worked hard to get all of the open items closed. We did not want to fail in how we handled this reduction in force. The day before the meetings with employees was supposed to occur, the executive team met one final time to make sure we had everything covered. During this meeting, the Head of Products and Marketing stated, “I did not know the meetings were happening tomorrow. I am not ready. We are going to have to postpone doing this.” The moment this was said, the rest of the executive team became incensed and started asking questions like, “how could you not know the meetings were going to happen tomorrow? We have been talking about this for weeks,” and “just two days ago, you said you were ready, and there were no issues with making this happen.” The response to these questions was a curt “well, I did not know we were doing this tomorrow, and I am not ready. We will need to postpone another two weeks so I can get ready.” The entire room became silent, with each member of the executive team determining what to say next. The President told us we should take a 15-minute break and reconvene when the break was over. The Head of Products and Marketing stood up and left the room. The President stayed and talked to the remaining team for a few minutes and then quickly gathered up his equipment and went as well. Three minutes after he left the board room, one of the employees rushed in to get our Vice President of Human Resources, saying, “we need you now; we have a problem!” The Vice President of Human Resources left with the employee. As the 15-minute break was coming to an end, I noticed the Vice President of Human Resources standing at the end of the hallway near the restrooms. She was waving her hands at me to get my attention. As I walked toward her, I could hear yelling by both the Head of Products and Marketing and the President coming from the women’s restroom. I asked the Vice President of Human Resources what was happening, and she said, “the President (who is male) followed the Head of Products and Marketing into the women’s restroom, and it sounds like they are having a serious knockdown drag-out fight.” Stunned, I asked the Vice President of Human Resources what we should do, and her response was, I have no idea, I have never experienced anything like this in my career before. Right now, I am telling people the restrooms are out of service and trying to move as many people away from the area as I can so they do not hear what is happening. I asked the Vice President of Human Resources to hang on and went and grabbed the Executive Vice President of Operations to get his input. I brought him over
160 Timothy Hough to the Vice President of Human Resources in the hallway, and we explained what was happening. Stunned, the Executive Vice President of Operations asked us to explain to him a second time what was happening. After doing this, we all discussed what we should do. “Should we go in there and stop them, I asked?” We determined that it was not the best idea and settled on having me and the Executive Vice President of Operations call the owner of the company and explain what was happening. “Can you believe this is happening” The Executive Vice President of Operations and I asked one another as we rushed back to the board room to call the Owner. After several tries to get through, we finally reached the owner. “We have an issue at the office that we need you to be aware of,” we said. “Ok, what is going on,” The owner replied. About twenty minutes ago, The President followed The Head of Products and Marketing into the women’s room in the front office, and they are having a huge fight. Both are screaming and yelling, and the argument can be heard through the entire front office. There was a very long pause followed by, “can you say that again? The President and the Head of Products and Marketing are arguing in the main office, and everyone can hear, is that what you said?” “Actually, they are having a serious verbal altercation, but The President followed The Head of Products and Marketing into the women’s room, and that is where this is happening. The Vice President of Human Resources is standing out in front of the restrooms, telling people the restrooms are out of order”. We ended by saying, “We think you need to get down here as fast as possible.” The owner replied, “I am not coming down; call me when this is over.” “Ok,” we answered and hung up the phone. Sitting in silence for a minute, The Executive Vice President of Operations and I assessed the situation, and then we asked one another, “what do we do?” The Executive Vice President of Operations and I were getting up to leave the board room, The Vice President of Human Resources walked in and said the verbal altercation was over. The Head of Products and Marketing went back to her desk and then left for the day, and the President just went back to his office. He left shortly after as well. We called the owner and told him the incident had ended, but we had no idea what had happened as both The President and the Head of Products and Marketing had left for the day. The next morning everyone came back to the office, and no one mentioned what had happened the day before. We executed on the reduction in force as we had planned and, over the next year, returned the company to profitability. Failures in Leadership The scenario that was explained above really happened and the executive team never spoke of the altercation as a group. For years after what we called “the incident,” we would talk about what happened individually or in small groups.
No Rest in the Restroom 161 We would tell the story to others, often receiving the same reaction. “He did what, where?” as a common response. In reflecting on the situation looking through a leadership lens, there are several areas where leadership failures occurred. Individual Lessons Not Being A Servant Leader in Trying to Understand What The Head of Products and Marketing Needed When the Head of Products and Marketing mentioned she would not be ready and needed another two weeks to prepare, each member of the executive team immediately dismissed her concern and quickly labeled The Head of Products and Marketing as being difficult and pushing her own agenda. As a servant leader, I personally should have stopped to assist the entire team in better understanding and serving (Fehr & Gelfand, 2012) the needs of the Head of Products and Marketing. I should have tried to initiate an open conversation that included seeking consensus (Fehr & Gelfand, 2012) on what the Head of Products and Marketing needed – discussed why she was unprepared and attempted to understand better what had changed from the previous meetings. Each member of the team lost sight of the fact that being a good servant leader means being a servant to everyone, not just the people that report to us. Each of us also added to the tension by exhibiting our frustration for the situation and made matters worse by not at least trying to understand the Head of Products and Marketing’s position. The Confrontation Many of the worst failures happened when the confrontation occurred. The apparent servant leadership failures in this situation start in the board room and end with the male President following the female Vice President into the women’s room. In their study on servant leadership and team conflict management, Wong, Liu, Wang, and Tjosvold (2016), determine “that servant leadership develops cooperative conflict management among followers” and “to the extent team members approach their conflicts co-operatively they improve team coordination.” As is indicated by the confrontation, at no time did the President or the Head of Products and Marketing take a co-operative approach to resolve their conflict. As no one was in the women’s room with them, there is no way to know exactly what happened and I will not speculate here, but for anyone who was outside of the women’s room, we all knew what was happening between the Head of Products and Marketing and The President. The Head of Products and Marketing and the President felt disrespected, ignored, and marginalized in one another’s eyes. The President felt the Head of Products and Marketing was insubordinate, and the Head of Products and Marketing thought the President was ignorant and a weak leader. As their argument went on, the comments became more personal and damaging.
162 Timothy Hough Conflict Escalation Glasl (1982) outlines the nine stages of conflict escalation. The first stage, Hardening, began in the board room when the entire team became frustrated with the situation and the conversation that was taking place. Each executive took sides and dug into their position. The group evolved into the second stage, Debates and Polemics (Glasl, 1982), when the group began to question how the Head of Marketing and Products could not know about what was happening the following day. This questioning led to bickering about how the team ended up where they were versus dealing with the situation (Jordan, 2000). This is the critical point in the incident where the group decided to take a break to see if it could regroup. This break is also the critical point where the escalation went from stage two to stage three. Stage three of Glasl’s (1982) nine stages of conflict is Actions. By following the Head of Marketing and Products into the restroom, the President took action in the confrontation. It is also important to note that this action was in the form of a physical (following a person into the restroom) and verbal (argument) confrontation. I believe this caused the conflict to escalate more rapidly than if the encounter had occurred in the board room with other team members present. The actions of the President caused the Head of Marketing and Products to take action by going into stage four of the nine stages of conflict. Stage four is Images and Coalitions (Glasl, 1982). In this stage, the conflict escalates into each person needing to save their reputation (Jordan, 2000). In this stage, it is also common to start to make comparisons of people to generalizations or stereotypes (Jordan, 2000). In the case of this conflict, we could hear the Head of Products and Marketing, saying the President was a weak leader and not like other Presidents she had worked for in the past. The President returned the volley by stating the Head of Products and Marketing was insubordinate and disrespectful, and she did not know how businesses worked. Jordan (2000) describes stage five, Loss of Face, as a transformation where the image one party holds of the other becomes radical. It is not an expansion of an old image but is felt as a sudden insight into the true, and very different nature of the other. The whole conflict history is now reinvented: one feels the other side has followed a consequent and immoral strategy from the very beginning. All their “constructive” moves were only deceptive covers for their real intentions. There is no longer ambiguity, but everything appears clear. The transformation Jordan (2000) describes in stage five occurred, which quickly lead to stages six and seven. Stage six, Strategies of Threats (Glasl, 1982), occurs when each party starts to strategies on how to minimize the threats presented by one another. After the strategies are analyzed, stage seven, Limited Destructive Blows (Glasl, 1982), occurs. As the confrontation in the restroom escalated, both people threw out the norms (Jordan, 2000) and became more personal with their attacks.
No Rest in the Restroom 163 As the attacks became more personal, stage eight, Fragmentation of The Enemy (Glasl, 1982) began. Both the President and the Head of Products and Marketing tried to damage the base of power of the other individual (Jordan, 2000). Interestingly enough, both people had the same base of power, which were the partners in the company. By attempting to destroy the other’s base of power, the person doing the destruction was destroying their base of power at the same time. As the bases of power were attacked, “all bridges were burned (Jordan, 2000)” and stage nine, Together Into The Abyss (Glasl, 1982), was achieved. In this stage, it is an all-out war, and there is no quarter given to any party whether they are involved directly or not. Collateral damage occurs throughout the organization, and no one is considered innocent or neutral in the conflict (Jordan, 2000). Group Lessons Conflict Styles of the Executive Team Rahim (1983) outlines the five styles of conflict management. These styles are integrating, avoiding, dominating, obliging, and compromising. When reflecting on the personalities within the executive team sitting around the table at the time of the conflict, each style was represented. The President and Head of Products and Marketing both having a dominating conflict style. Typically, these styles would work in harmony when there was conflict within the team, but something happened that day that was different. In their study on accountability and cooperation, Sonntag and Zizzo (2019) found individual contributions declined when information regarding actions was made available (whether voluntarily or involuntarily) to team members. As the days leading up to the move to cut staff, each team member would report out in detail what they were going to do and when they were going to do it. As a group, we incorrectly assumed by sharing the details of our planning that we would have individual accountability to the group. As I reflect on the situation, I feel the individual accountability and cross-team cooperation was a foundational element for the team. When we each realized we did not have this foundation, we lost our footing. When the stability of this footing was lost, the group began to escalate the conflict. Organizational Lessons Over time, as we talked about the incident in small groups, we always discussed how the Head of Products and Marketing and the President were wrong in what they did, but we never looked in the mirror to examine all of the failures that we, as leaders, had that day. Why didn’t any of the other executives go into the restroom and either stop the argument or move the Head of Products and Marketing and the President to another more private room where they could continue their conversation? I do not think it was because we had never seen anything like this before and were stymied on what to do. I also do not believe it was because we did not have the courage to go into the restroom and confront both the Head
164 Timothy Hough of Products and Marketing and the President. It was because, at that moment, we forgot what was required of us to be Servant Leaders. In their study on who makes a good leader, Gächter, Nosenzo, Renner, and Sefton (2012) point out that among other traits, leading-by-example is a way a leader can influence followers in an organization. Gächter et al. (2012) also point out in their study that effective leadership will depend on the leader’s beliefs and preferences. During the incident, the choices of the leaders involved were not to engage in the heated argument in the restroom. It was also the preferences of the leaders involved to not address the incident as a group or to the broader organization. This failure to lead-by-example may have contributed to the Head of Products and Marketing and the President leaving the organization. Conclusion There were many leadership failures after the incident had occurred. The most significant and most glaring was that the event was never talked about, either one-on-one or in the group. There was no closure, no apologies, no explanation, nothing. No reason was given to all of the people who witnessed or heard the altercation. The entire company went on as if nothing ever happened even though we all knew it had. The executive team was not the examples we had wanted to be to the company. We also did not model what servant leaders should do when they make a mistake. At a minimum, we should have addressed the issue with the entire company, apologized, and reminded the employees that we were still human and that we sometimes make mistakes. We should have committed publicly to doing better and to holding ourselves to a higher standard. None of this happened because we pretended the incident did not occur. The executive team was never the same after what happened. Sure, we all tried to work together as best we could, but there was underlying resentment within the group. Within the year of the incident happening, the Head of Products and Marketing and the President of the company left to pursue other opportunities. The other executives who stayed would often talk about the incident and relive what we all experienced. Never once did any of us ask what we, as servant leaders, should have done differently that day, and, in my opinion, that is, still one of our biggest leadership failures. We did not try to learn from our mistakes. References Fehr, R., & Gelfand, M. J. (2012). The forgiving organization: A multilevel model of forgiveness at work. Academy of Management Review, 37(4), 664–688. doi:10.5465/ amr.2010.0497 Gächter, S., Nosenzo, D., Renner, E., & Sefton, M. (2012). Who makes a good leader? cooperativeness, optimism, and leading-by-example. Economic Inquiry, 50(4), 953–953. Glasl, F. (1982). The process of conflict escalation and roles of third parties. Conflict Management and Industrial Relations, 119–140. doi:10.1007/978-94-017-1132-6_6
No Rest in the Restroom 165 Jordan, T. (2000, October). Glasl’s nine-stage model of conflict escalation. Retrieved from https://www.mediate.com/articles/jordan.cfm. Accessed on July 1, 2020. Rahim, M. A. (1983). A measure of styles of handling interpersonal conflict. Academy of Management Journal, 26, 368–376. Sonntag, A., & Zizzo, D. J. (2019). Personal accountability and cooperation in teams. Journal of Economic Behavior & Organization, 158, 428–448. doi:10.1016/j.jebo.2018.12.014 Wong, A., Liu, Y., Wang, X., & Tjosvold, D. (2016). Servant leadership for team conflict management, co-ordination, and customer relationships. Asia Pacific Journal of Human Resources, 56(2), 238–259. doi:10.1111/1744-7941.12135
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Chapter 16 The Demise of a Company: An Insider’s Personal and Scholarly Reflection Dorianne Cotter-Lockard Abstract The time has come to reflect on the warning signs, decisions made, and repercussions of those in leadership of a financial services company which collapsed in the wake of the financial crisis during the mid-2000’s. The author was a divisional technology executive of this firm at the time, close enough to the top of the organization to observe the actions of those in charge. The author’s observations over a period of years eventually led her to resign from her position to enter a doctoral program only a few weeks before the company’s demise. The impetus behind the author’s resignation was her feeling that the decisions and actions of those in leadership violated her personal values. In this account, the author offers her personal reflections and the repercussions of this experience, followed by a deconstruction of this tragic leadership failure which includes references to the leadership literature. Keywords: Arrogance; combative corporate culture; corporate lifecycle; founder succession; risk-taking; workplace bullying Introduction This story begins several years before this organization’s progression of leadership failures occurred. Many smaller leadership breakdowns occurred along the way. The momentum of failures increased over time to such a point that I felt compelled to leave the company. This story is told from my perspective, in the present moment. Therefore, I have reconstructed this story according to my filters and biases (Aronson & Aronson, 2018). I acknowledge that other perspectives exist and others had different experiences and reactions to the same events. When Leadership Fails: Individual, Group and Organizational Lessons from the Worst Workplace Experiences, 167–178 Copyright © 2021 by Emerald Publishing Limited All rights of reproduction in any form reserved doi:10.1108/978-1-80043-766-120211016
168 Dorianne Cotter-Lockard I do not intend to blame or shame anyone. I took time to work through my emotions and reactions to this story, and am grateful to have the opportunity now that many years have passed to tell this story and examine it for lessons related to leadership. My Story I joined this financial services organization when it was still relatively small, around 11,000 employees. I managed a technology department at that time of around 125 employees and contractors. My immediate challenge was to hire enough people to modify programs for Y2K (Year 2000). My training as a consultant with a well-regarded management consultant firm influenced my management style. During my first month in my role, I developed a strategic plan for my organization which focused on service to the business, increased professionalism, and development of team members to provide a high level of technology quality and service. My organization grew to 450 people in concert with the growth of the company, after which time the leadership team added another organization to my responsibilities, bringing the total to 850 people. In the Beginning: A Thriving Workplace My colleagues (the CFO, COO, and Head of Operations) supported me and showed interest in the initiatives which we implemented within our IT organization. My manager, the divisional CEO, boasted of having the best systems in the industry, which could handle large volumes of customer accounts. He adopted a hands-off attitude toward me, trusting the partnership between me and my business peers. In the beginning, I had little interaction with the most senior level of management at the firm – that changed over time. My colleagues across the company exhibited an intense sense of pride and belonging. For many, this firm was their first and only company – their entire careers depended on its success. People felt strong ownership of the firm, which originated in a garage and was recognized for innovation in its field. The founder loved to tell stories about the company’s history and milestones. We celebrated each new milestone, whether it was the number of accounts or dollar amount of assets, and the milestones accelerated over time. During the first several years of my tenure, we created an organizational development laboratory within our IT division, experimenting with different aspects of structure and processes. For example, we developed core values for our organization from the bottom-up, with small focus groups totaling 350 people. Then we surveyed our entire organization to determine employee alignment with the values and assess how well we lived those values. Next, a team comprised of nonmanagement staff developed a rewards and recognition program based on the values. We used our values, in addition to other criteria, for hiring, promotion, and performance evaluation processes. We implemented a quality measurement program which earned an award from a measurement excellence conference. We created our own internal recruitment
Demise of a Company 169 and training programs for recent college graduates and promising employees from the business units. Our team instituted a re-tooling program to help programers transition to new technologies, along with a mentoring program to support them. We established peer-group and cross-organization teams to enhance 360-degree communication. During a three-year period, our employee turnover rate fell from 32% to 4%, and Gartner Research highlighted our division twice in case studies of high-performing IT organizations (Berry & Walker, 2006). These organizational innovations were not lost on my colleagues within the larger operations division. Together, we replicated many of the concepts and organizational innovations across operations. I invited my business peers to accompany me to conferences at IBM and Gartner so we could learn the latest trends and best practices together. We implemented many of these ideas in partnership across the larger organization. The former CEO of the division retired, and our COO became the divisional CEO. As a united operations leadership team, we co-created a safe space for innovation and individuality. I felt that I belonged in the business division, I felt at home with my IT organization, and deeply connected with my colleagues. Most of our IT projects succeeded. When we were not successful, we owned our failures and admitted them. I felt pride and fulfillment in our many achievements. Combative Corporate Culture We accomplished this despite the culture at the top of the company. Senior management exemplified an “alpha-male wins all” culture. The mode of communication included yelling, name-calling, and lobbying insults at subordinates. I recall one strategic planning meeting with the senior executives in which a top leader told another divisional leader that, “my 14-year-old daughter could write a better strategic plan.” I heard one famous story (a first-hand account told by a colleague) of an executive who demanded that everyone stay past midnight until they finished a report for him. He apparently barred the exit with his imposing presence until the report materialized. My own first conversation with the CEO of the company illustrates the combative stance of the leadership. I sat at a circular table with colleagues while enjoying breakfast on the veranda at our offsite strategic planning meeting. This was my first invitation to attend a firm-wide strategic planning session with the senior executives of each division. The CEO seated himself at our table while one of my colleagues introduced us. The CEO had already heard about me, and he launched into an interrogative interview. Among other questions, he asked me what I thought about the company which acquired my former employer. The acquiring company had made a play to acquire his firm as well. I offered an honest opinion, saying that I thought the acquirer augmented its market value by buying up smaller firms. Eventually, the company needed to figure out how to profit without this strategy, and likely it would collapse. The CEO liked my response, stating that “no < expletive > way will [company XYZ] ever buy us!” He then rose and walked away to get some coffee. My male colleagues gave me a “high five,” saying “you passed!”
170 Dorianne Cotter-Lockard A year or two later, the company’s leadership announced their most ambitious strategy. Key phrases in the strategy included several instances of the word dominate. I squirmed whenever I read those phrases. The strategy contradicted some of the original messages which attracted me to the company, namely that we were helping regular people to achieve the American Dream. Growth, Ambition, and Succession During the early 2000s, the company grew quickly. New types of financial instruments and risky product offerings became popular during this time. Since I worked in the back-office division, the senior leaders of the firm tasked us with handling the repercussions of decisions made by the sales organization. The business division that my team supported produced quarterly reports on loan default rates for each year’s book of business. We discussed these at our business division meetings, then provided the reports to the sales organization. In the mid-2000’s, we began to see a rapid rise in default rates, foreclosures, and bankruptcy claims from customers. We advised the sales team to stop pushing risky loan types and to focus on selling more standard loans. Our advice was ignored. Leadership at the top of the company commenced a detailed succession planning process along with an executive development program. I participated in both. The succession plan specified that the founder–CEO would step down in a year and the then-current President would become the new CEO. The President served as a leader with the company for more than 20 years. He came from an accounting background, and his leadership approach was fiscally conservative. Surprisingly for a company of our size, the President on occasion took the time to sit down with me and go through my entire project list to understand the investments our division made in technology! Decisions and Disillusionment After a year, the CEO announced that he would not leave the company. I surmise that he sensed the impending challenges to the company’s fortunes and decided he needed to stay at the helm to guide it through stormy waters. What happened next caused me and others in the company considerable consternation. The President was asked to resign with a non-compete agreement, and the company appointed the lead sales executive as the new President. I saw the former President as a role-model. He was respectful in his communication, thoughtful, cautious, and fiscally responsible. Soon after the former President left, leadership invited the CIO of the firm who was aligned with the former President, to leave. At this point, I remember saying to my divisional colleagues of the founder–CEO, that “he’s going to take the whole ship down with him.” The new President and his team took an aggressive sales and leadership approach. The level of arrogance and insults rose to new levels within this team. These men were cognitively brilliant. I and others across the company could not fault their brilliance – intelligence was highly valued within the company.
Demise of a Company 171 The new President’s favored head of technology became the new CIO and he moved all technology divisions to report centrally to him (in the past, technology groups reported to divisional CEO’s). The climate during technology meetings became tense. When the new CIO expressed his displeasure about something during meetings, I observed my new peers cowering like beta members of a wolf-pack to the alpha-male. I attempted to maintain a positive relationship with my new boss, suggesting ways (in private) to have more productive conversations during meetings. To give him credit, he did listen to what I had to say, and he made some efforts to be more respectful during meetings. I suspect that he realized it would be wise to pay attention since I was the only female leader on his team. I took steps to maintain balance in my personal life; I remained active with my spiritual community as well as serving on a non-profit board. My spiritual practice included 30 minutes of daily meditation. It was during this time period, around 2006, that I began to gain clarity of my work situation as a result of my meditation practice. The internal wisdom which surfaced during my meditations said, “get out of there,” indicating that I should leave my position at the firm. I discerned an incongruence between my personal values and my observations of events at the firm, and I felt a sense of impending disaster. I began to think about my options for the future, as well as consider who might replace me from within my organization. Then came “the last straw” for me. A hallmark of our offices around the country included prominent displays of our company timeline on the walls. The timelines showed photos of the founders in the early days, along with milestones and key executives such as the former President. One day, I noticed that the timelines looked different. The timelines no longer contained photos of the former President. No one spoke about this change, but I felt violated that the firm expunged someone from the company’s narrative who made a significant contribution to the company’s success for more than 20 years. I believe this was the tipping point for me in my decision to leave the company. First, there were the ignored messages regarding unsustainable sales of risky products, then there was the decision to oust the former President and put in place more aggressive, risk-taking executives. Next, my own direct management changed, and finally the firm erased the corporate memory of a leader whom I highly respected. I put plans in place for my succession, ensuring that management had a choice between two qualified successors, then I applied to a doctoral program in human and organizational development. I gave six weeks’ notice of my resignation. Resignation, Road-Trip, and Collapse I left in July 2007. My husband and I decided to take a road-trip from California through Utah, Montana, and into Canada to visit friends and national parks. On our way home, while driving down the west coast from Seattle, we heard radio reports of the eruption of a financial crisis. Within a few weeks, my former company virtually collapsed and was bought by a larger firm which was,
172 Dorianne Cotter-Lockard in turn, bailed out by the US government. The acquirer of my former company hired me as a consultant for the next two years to help manage the integration of the systems between the two companies. Witnessing the dismantling of my former company first-hand caused me great pain. Almost all my peers lost their jobs within the first year. The media blamed senior managers of my former company for the crisis. My former colleagues and I went through the typical stages of grieving (Kübler-Ross & Kessler, 2005). First, I felt disbelief that my former company was the main party blamed for the financial debacle. I believed the former CEO’s quotes in the press. We did not do anything wrong! Next, I felt anger and sadness to see everything we built during the prior dozen years dismantled by the acquiring company. Finally, I felt a deep sense of shame which lasted for years. When asked about my experience as an executive, I could not bring myself to mention the name of my former firm. By that time, my peers, colleagues, and many of the managers who worked for me moved on to a new company founded by a former executive. I eventually reached acceptance. One day, a wise colleague – friend said to me, you know, you did a lot of great things at that company that you should be proud of, and you had a positive impact on hundreds, if not thousands of people across the company, the company’s partners, and its customers. Get over it and let go of the shame! Discussion: Leadership Lessons In this section, I deconstruct my experience by first examining seven habits of unsuccessful people (Finkelstein, 2003) in relation to this case scenario. Next, I identify three leadership lessons from this experience which are common to leadership failures. The lessons are as follows: (1) unhealthy values and behaviors lead to organizational failure; (2) arrogance leads to dismissiveness and unwarranted risk-taking; and (3) entrepreneurial founders’ reluctance to allow succession prevents healthy organizational evolution. I substantiate my points with research literature related to these themes. I use the personal pronouns, he and his throughout my discussion because the top leadership of the firm in question were men. Habits of Unsuccessful Leaders Finkelstein’s (2003) research identified that “spectacularly unsuccessful people” demonstrate at least five of seven common habits (p. 213). These include: 1. They see themselves and their companies as dominating their environments (p. 214). 2. They identify with the company so that there is no clear boundary between their personal interests and their corporation’s interests (p. 218). 3. They think they have all the answers (p. 223). 4. They ruthlessly eliminate anyone who isn’t 100% behind them (p. 226).
Demise of a Company 173 5. They are consummate company spokespersons, obsessed with the company image (p. 227). 6. They underestimate major obstacles (p. 231). 7. They stubbornly rely on what worked for them in the past (p. 235). First, the leaders of my firm declared a strategy to “dominate the industry.” According to Finkelstein (2003), such leaders “vastly overestimate the extent to which they are controlling events” posed by the competitive and economic environment (p. 214). Related to healthy boundaries between the CEO and the company, he saw himself as inseparable from the firm’s identity, as demonstrated by his unwillingness to step down according to the succession plan. Thus, the CEO made decisions based on his personal interests rather than the best interest of the company and its customers. In addition, the senior leadership team believed that they could address the firm’s challenges because of their brilliance and past achievements. However, their belief system did not allow dissenting viewpoints or data. These men were intelligent from an IQ perspective, and they made significant achievements. From a human development perspective, we know that IQ is not the only form of intelligence (Gardner, 1999; Prasad, 2016; Wilson & Mujtaba, 2010). Emotional intelligence (EQ) research shows that a lack of EQ skills such as empathy contribute to lower productivity and innovation within organizations (Boyatzis et al., 2012; Lee & Wong, 2019). These leaders lacked EQ skills such as empathy and emotional self-control, thus discouraging employees to speak up regarding risks and challenges to the firm. Regarding habit #4, the firm ousted the former president after he devoted more than 20 years of his talents to the company. Other key leaders left, and the subsequent re-organization instituted executives who were in complete alignment with top leadership. Finkelstein (2003) says, “by eliminating all dissenting and contrasting viewpoints, they cut themselves off from their best chance of correcting problems as they arise” (p. 227). In addition, the CEO defended the company image at every opportunity as he made good use of the media. Finally, even though the warning signs in the industry were clear, the firm’s top leaders misjudged the risks and potential impacts of their decisions. Lesson #1: Unhealthy Values and Behaviors Lead to Organizational Failure According to Schein (2017), the structures of organizational culture derive from a “pattern or system of beliefs, values, and behavioral norms that come to be taken for granted as basic assumptions and eventually drop out of awareness” (p. 6). Although values may be explicitly stated in company mission statements, often there are differences between the espoused values and the demonstrated values of an organization. Demonstrated values are based on underlying assumptions which lie deep in the subconscious of an organization’s culture. In the case of this firm, the values demonstrated through leaders’ behaviors included intelligence, innovation, dominance, aggression, and risk-taking.
174 Dorianne Cotter-Lockard From a positive viewpoint, cognitive intelligence as a value can attract talented, creative individuals who innovate, improve quality, reduce costs, and discover new markets. However, there is a shadow side to valuing intelligence: arrogance. Johnson et al. (2010) defined arrogance “as a set of behaviors that communicates a person’s exaggerated sense of superiority, which is often accomplished by disparaging others” (p. 405). In my story I provided examples in which leaders belittled members of the organization. These behaviors can also be characterized as bullying. Boddy (2010), drawing on the work of Dierickx (2004) and Djurkovic, McCormack, and Casimir (2004), stated that bullying “includes behavior designed to belittle others via humiliation, sarcasm, rudeness, overworking an employee, threats, and violence” (Boddy, 2010, p. 367). The leaders of my organization exhibited all these behaviors except violence. Bullying in the workplace can negatively impact individuals and teams (Boddy, 2010; Harvey et al., 2007). Recent studies support the conclusion that bullying in the workplace leads to emotional exhaustion and employee silence as a coping response (Rai & Agarwal, 2018; Xu, Loi, & Lam, 2015). Workplace bullying can also impact the cohesiveness of work groups, as witnesses to bullying behaviors might align with the bully because they fear retaliation if they were to defend the victim (Park & Ono, 2017). Victims may begin to feel isolated from their team as a result (Zapf, 1999). Bullying behaviors by the leaders of my former organization shut down those who had important or useful information to guide the organization through its challenges. Furthermore, according to Ma and Karri (2005), “arrogance leads to complacency and, as a result, firms develop blind spots to threats in the competitive environment … and create illusions that they are invincible” (p. 68). This conclusion brings us to our next leadership lesson, dismissing the messengers of unwanted news. Lesson #2: Arrogance Leads to Dismissiveness and Unwarranted Risk-taking In a study aimed at developing a scale to measure organizational arrogance, Herbin’s (2018) definition of organizational arrogance includes “dismissiveness toward internal and external organizational matters, and disparagement toward intraorganizational and interorganizational members” (p. 10). Furthermore, if a leader dismisses a colleague’s voice in a derogatory manner, the leader demonstrates a need to establish their superiority (Milyavsky, Krunglanski, Chemikova, & Schori-Eyal, 2017). Despite regular reports delivered to management with detailed financial analyses regarding rising loan defaults, top leadership ignored our warnings. Since my IT organization served a division that provided customer service and back-office functions, we directly encountered the pain suffered by customers who could no longer afford to make payments due to rising rates. As a result of this situation, I felt distressed and disempowered. Dismissal of undesirable news as a result of arrogance allows leaders to continue their course of action, often taking risks that put an organization in
Demise of a Company 175 jeopardy of dissolution. Risk-taking is another value which has constructive and destructive aspects. Risk-taking is often necessary to enable innovation (Norton & Moore, 2006). Risk-taking and innovation were highly valued aspects of my firm’s culture. However, taking risks in the face of data which contradicts a given strategy can lead to failure (Linstead, Maréchal, & Griffin, 2014; Robertson & Sullivan, 2009; Schoemaker & Day, 2009). Lesson #3: Entrepreneurial Founders’ Reluctance to Allow Succession Prevents Healthy Organizational Evolution The decision of the CEO–founder to remain, even though a detailed succession plan was in place for some time, could have one of several root causes. I surmised that the CEO of my firm sensed rough waters ahead for the company and wanted to ensure the future of the company. A more common reason could be the inability for a founder to step away from his creation. According to Adizes (2004), companies go through normal stages of development through a corporate lifecycle. As organizations move into the stage of “adolescence” (p. 76), they begin to establish systems, processes, procedures, and a more professional approach to management. This was the case for my firm. Senior leadership established a regular strategic planning process, brought in a consulting firm to implement a leadership development program, and developed policies and procedures. I welcomed this evolutionary step, contributing to the process while engaging my own management team to develop our own planning and organizational structures and processes. Adizes (2004) stated that the adolescent phase of a company’s life is stormy due to internal conflicts which result from growth and change. During adolescence, internal conflict arises between risk-takers and those who put structure and systems in place. The founder must be willing to let go of his “absolute monarchy” and allow decision authority to be decentralized (p. 70). As an organization transitions to this stage, the founder must be willing to step down and allow professional management to take his place. According to Adizes, it “is rare that a king voluntarily yields his absolute power” (p. 76). In the case of my company, the founder allowed risk-takers to retain control of the company’s strategy instead of handing the reigns over to a professional management team that would ensure stability and structure. My Personal Lessons Lessons are available in every life experience if one chooses to learn. I realized my own lessons from this experience. First, I discovered that it is possible to create a thriving sub-organization despite unhealthy leadership behaviors by senior leaders at the top of the larger organization. In a study conducted by Nel, (2019), results demonstrated “a significant negative relationship between workplace bullying and flourishing” (p. 1), and that employees can tap into their personal resources such as EQ capabilities, to mitigate the effects of bullying, thus enabling workplace flourishing.
176 Dorianne Cotter-Lockard Second, I learned to listen to my inner wisdom which directed me to follow my personal guiding principles and values. I value communication transparency, open dialog, and continuous learning within organizations. I value integrity, which is the congruence between publicly stated values and the actions of those in leadership. Furthermore, I value honoring each person’s voice in a context of respect and openness to diverse viewpoints. Following one’s guiding principles is not easy to do, given the daily pressures in a toxic work environment. Courage is required. I remember being pressured for years to contribute to the company’s political action committee (PAC) – leadership expected all executives to participate. Since I disagreed with the aims and lobbying activities of the PAC, I declined, despite being called “a tree-hugging liberal.” As each aspect of leadership failure continued to deviate from what I valued most in an organization, I turned toward my decision to leave. A third personal lesson is that shame is unnecessary, though the grieving process is required. If I were to replay this experience, I would have transcended the shame by consciously working through a grieving process. As part of my personal life philosophy, I believe that painful experiences can lead to learning and personal evolution. Finally, my experience in creating a thriving organization within a context which exemplified the antithesis of thriving drove me to study human development, leadership, and organizational systems. This experience provided the push I needed to release my status quo career journey as a technology leader to venture into the academic world. My research in the arena of team collaboration gave me the opportunity to explore how we connect with and listen to each other, and to discern which elements enable effective collaboration. I continue to explore authentic leadership; I now teach mindful leadership at the graduate level. Hopefully, my students benefit as a result. Conclusion This essay explored one person’s experience with a case of leadership failure. I hope that the leadership lessons in this discussion will guide and support future leaders and teachers of leaders to create organizations which thrive and benefit all stakeholders, including the planet. References Adizes, I. (2004). Managing corporate lifecycles: how to get to and stay at the top. Santa Barbara, CA: The Adizes Institute Publishing. Aronson, E., & Aronson, J. (2018). The social animal (12th ed.). New York, NY: Worth Publishers. Berry, D., & Walker, A. (2006, August 1). Building the high performing IT organization through people. Gartner Research Report. ID: G00207638. Boddy, C. R. (2010). Corporate psychopaths, bullying and unfair supervision in the workplace. Journal of Business Ethics, 100(3), 367–379. doi:10.1007/s10551-010-0689-5
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