3 Toxic Character Flaws That Cause CEOs to Fail
It's a bit of a cliché but there is also a bit of truth in the age-old adage, "absolute power corrupts absolutely."
The most powerful position in corporate America today is CEO.
To be clear, there are thousands of CEOs who are exceptional leaders, icons of virtue, committed philanthropists and individuals of the highest integrity - this is not an indictment against all CEOs.
However, power does affect humans and not always for the positive. It's naive to assume otherwise. The truth is that all of us have shortcomings, including individuals in the C-suite.
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Make no mistake, the trappings of power can cause cracks and flaws in a CEO's character or make minor fissures more apparent. Here are a few of the most pronounced.
Sense of entitlement.
This is not isolated to C-level executives, but when you consider the continuing rise in executive compensation it makes for more fertile fields of "I deserve this." A recent report conducted by a national labor union - so take it with a grain of salt - found that CEO compensation is currently 331 times greater than the average worker and 774 times greater than an employee earning minimum wage.
I'm an ardent capitalist. I believe in pay-for-performance, and I understand the best-and-brightest leaders need competitive compensation packages - but the pay delta we're talking about here is borderline absurd.
The average total comp package of an S&P 500 CEO in 2013 was $11.7 million. A normal distribution curve for performance would suggest at least 25 percent of those leaders didn't earn their pay. GE is famous for ranking all its employees and firing the bottom 10 percent of its performers. While that's a common performance-review practice among the rank-and-file, it's unheard of among top-ranking leaders.
While CEO is a tough 24/7 job, it's easy to get lulled into an entitlement mindset. If you've never seen that type of entitlement, you haven't spent enough time along mahogany row.
Is never wrong.
Every good leader needs a strong sense of self, solid decision-making abilities and a cabal of trusted advisors. Despite those positives, problems arise when the CEO morphs into an all-knowing autocrat who squelches dissent and ideas.
It's human nature to seek information that reinforces pre-existing perceptions, concepts and world views. Additionally, it's also human nature for subordinates to appease and stroke the top executive's ego. It doesn't matter who you are, if the support staff around a CEO only tells the leader how great the leader's ideas and opinions are, that leader will tend to believe it.
CEOs tend to be more prone to this type of flaw given their unparalleled ability to control their own environment, access from advisors and information inputs. The issue is further compounded by counselors who massage and dilute the data, trends and information the CEO needs to make the best decisions.
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Above the truth.
News flash! There are absolute truths. Contrary arguments that assert there are no absolutes are self-defeating because the contradiction is an absolutist assertion itself. Truth and ethics matter in every aspect of life, including business.
The two previous CEO flaws can feed this last one of "being above the truth." The demands of a top-leadership position can poison a CEO's self talk to believe an internal monolog such as, "Those rules don't apply to me;" "I'm above those policies;" "I've earned the right to take a pass this time;" "I'm unique in this regard."
That insidious internal conversation that tells them they're different than everyone else is how leaders fall.
Those flawed thoughts can lead to flawed actions. From politics, entertainment, business, sports and non-profits the number of top executives who put their personal needs, egos, greed or appetites above the truth have been legion.
From seemingly small things, such as claiming an unearned degree on a resume to committing felonies such as contract kickbacks or embezzlement, they're all issues of deception varying only in scale and scope.
Obviously, these flaws can occur at any level of an organization and they do, but that only reinforces the point that the CEO's position of strength might actually feed their weaknesses.