Written in collaboration with Patty Woolcock, Executive Director of CSHRP.
In so many ways, Silicon Valley firms—like Apple, Facebook, Genentech, Google, HP, Intel, Netflix, Oracle, Tesla, and Uber—have created innovative products and services that shape our world. But along with these positive outcomes, sometimes Silicon Valley firms lead in not-so-positive ways. Many Silicon Valley companies fall prey to a major Achilles heel: a negative arc of success. This downhill trajectory happens when success leads to hubris (arrogance or pride), which leads to insular or self-interest thinking that leads to failure to adapt that leads to decline. And this success-leading-to-hubris process affects not just Silicon Valley firms: all successful firms and leaders risk falling into this vicious cycle.
What are the warning signs of hubris? Consider these ways of thinking.
1. “Our product or service is so great; no one can ever make a product as great as ours. We don’t need to think of the next great thing because we already have it today.”
Many former Silicon Valley companies have “rested on their laurels” and assumed the fabulous product or service they have created will continue to succeed with corresponding continued high revenue (e.g., Jawbone, Beepi, etc.). To avoid product hubris, a company needs to either cannibalize its own sales with its next product or broaden the scope of their offerings with additional products or services. Electronic Arts (EA) moved from shrink-wrapped, off-the-shelf games to online gaming communities. Apple broadened its offerings into iPhones, iPads, iTunes, and Apple Pay in addition to the more traditional laptops and desktop systems. Those with hubris become insular and beholden to their current product or service.
2. “We don’t need to worry about the bad behavior of our executives, board members, or advisors. Our company is so great that people will flock to our products/services anyway.”
In a world of increased transparency, businesses can no longer excuse dysfunctional executive behavior. Sexual harassment, disrespect for others, hostile work environments, bullying, mistreatment of vendors or customers, etc. are no longer overlooked because of success, even in Silicon Valley. Customers are choosing to not use a vendor based on the vendor’s bad executive behavior; top employees avoid hostile work environments; and investors are shifting their resources away from companies with unsustainable employee practices. Those with hubris justify or hide bad executive behavior behind success.
3. “We are so unique that we don’t need to learn from others or from previous research.”
The public domain contains a significant body of research about what makes a product, service, organization, or leader successful. Firms and leaders with hubris tend to ignore previous research or do their own “new” research, often replicating what others have already found. “Unless invented here” (UIH) (as opposed to “not invented here” [NIH]), the research seems invalid. Too many Silicon Valley companies are starting to do their own “research” to prove whatever conclusion they have decided in advance. Likewise, some major Silicon Valley companies prohibit their professionals from participating in or making presentations to professional associations. Beyond protecting trade secrets, hubris implies that the company has nothing to learn from others and wants to keep its “expertise” behind a curtain of secrecy. A blanket ban on engaging with others is detrimental to the company and downright ridiculous. Those with hubris fail to build on the past and they do not share with and learn from others.
4. “We only hire the elite as defined by those with high GPAs from a select group of top universities.”
We do not question that top talent will more likely create successful companies. But finding and attracting top talent requires increased flexibility in sourcing that talent. A very well-known Silicon Valley company used to limit their recruiting to specific universities (very few, actually), and they used GPA as a gate-keeper for potential employment. They learned that this limited their access to great future talent. Their perspective changed over time, and they published comments that “university and GPA are not the strongest predictors of employee success.” Great talent comes from many places, with different backgrounds and orientations. Those with hubris often surround themselves with people like them.
So if you want to avoid hubris, what is the antidote? Here are some leadership tips for you and for your organization:
1. Learn, learn, and learn some more, so that you continually discover what you don’t know.
Commit to learning by letting go of both what failed and what worked. Carol Dweck’s work on growth mindset is so helpful. She recommends curiosity in both failure and success. When something fails, learn and move on. When something succeeds, learn why and apply it to the next setting. Learning means being open to candid critiques on what worked and what did not. Learning generally focuses on the ideas more than the person who created them and asks questions more than gives answers.
2. Focus forward, not backward, so that you anticipate your next challenges.
If you find yourself talking more about the past than the future, stop! Keep anticipating what’s next; the best is yet to come. The future holds more opportunities than the past has successes.
3. Share credit; take blame, so that you remain humble, and are seen as human.
When something works, liberally share credit with others. When something does not work, accept responsibility both privately and publicly, recognize lessons learned, and readily apply those lessons to the next opportunity. Face and be accountable for bad executive behavior.
4. Expand social networks, so that you are aware of people and issues outside your own world.
Surround yourself with people not like you and have open dialogue with them. Know your strengths and find people who complement them. This might include current or potential customers (e.g., advisory panels) and employees who may think and act differently from you. Seek opinions and take council from others. Apologize when you make a mistake.
5. Lighten up, so that you are aware of your limitations.
Do not take yourself too seriously: find a place where you are not the smartest or most successful. Engage in hobbies (sports, music, gardening, hiking) or communities (church group) where you are an average member of the group.
6. Create the right scorecard, so that you remember what is important.
Success is not the largest yacht, social media citations, money earned, employees with the right GPA, or other public monuments, but ideas discovered, relationships built, and legacies created by giving back to others. With success, it is appropriate to have a more-than-comfortable life, but flaunting gaudiness, success, or wealth distances and isolates rather than engages and connects.
So, how do you avoid the success-to-hubris vicious downturn? How do you see these suggestions playing out in your organization to help you?
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The RBL Group supports organizations to develop leadership and talent capabilities and drive business value for all stakeholder. Learn more about our Leadership & Talent Practice by clicking here.