This obviously helps to carry them through difficult times and enables them to take their managers and staff with them even when things look particularly bleak. At the same time, however, leaders are often warned to avoid hubris. This is good advice. The worst CEO is the one who thinks he or she knows it all. The corporate road is littered with the car wrecks of those leaders who stopped listening to criticism and failed to face reality.
The rise and fall and rise again of the British retail chain Marks & Spencer offers one such example. There, the former CEO Sir Richard Greenbury failed to act quickly enough to respond to changing market conditions and declining customer satisfaction in the 1990s. The result was a loss of earnings and a plummeting share price that has only recently started to recover.
It was said that many directors were afraid to give him bad news. ‘Rick' Greenbury may have got an unfair press because he happened to preside over the company's darkest hour. After all, before its fall, Marks & Spencer under Greenbury had produced very healthy annual earnings of £1 billion. Nonetheless, it could be said that hubris or certainly a complacent attitude helped to blind Greenbury to the dangers ahead.
It is interesting, therefore, to read in the latest issue of Management Today that you can plot hubris - the gap between your firm's self-image and what your competitors think of it. According to the academic Mike Brown (who compiles Management Today's annual Most Admired Companies ranking), the greater your company's hubris the greater the chance of it getting bought out or going bust in the near future.
The magazine notes that this year's most admired company, Tesco (a winner many times running) is not doing so well on two fronts: CSR and the quality of its goods and services. Its CEO Sir Terry Leahy is not the type to get complacent or to succumb to hubris. However, given the company's amazing ascent, he must have to force himself to avoid arrogance and a know-it-all feeling on a daily basis.
Stuart Rose, who is currently reviving Marks & Spencer's fortunes, seems to have got the formula right. He has plenty of self-belief and conviction about the way forward, but tempers this with a more humble, it's-not-all-me attitude. At least, that's what he seems to do.
In the same issue of Management Today, Chris Blackhurst interviews Rose and this passage reveals the man's hubris-avoidance technique: "And he's now the second Most Admired business leader in the land. Yet he's refusing to celebrate, unable to commit himself to the one word that sums up the transformation. 'I'm loathe to say "turnaround".' It's only two years since the chain was at rock-bottom; he knows that success, however spectacular, is also fragile. He's keen not to seem triumphalist. 'It's not about one person, it's about teams of people. We've got 85,000 in this organisation. They're all responsible for our success.' He checks himself. 'But I have to acknowledge that we're doing well. It's become a mantra of mine that we're now getting back more than we're delivering.'"
By Morice Mendoza