Management Turnover as Change Agent

Monday, March 10, 2008

Recommended Reading - When Bad People Rise to the Top, MIT Sloan Management Review, Winter 2008

The Winter 2008 issue of the MIT Sloan Management Review Vol. 40 No. 2 contains a very informative article by Terry Leap, a professor of management at Clemson University entitled, When Bad People Rise to the Top. According to the What's Offline column by Paul B. Brown in Saturday's New York Times Business Section, Professor Leap's eight page article examines possible ways to avoid problem CEO's. In the New York Times piece, Brown stated,
Mr. Leap lists a dozen warning signs that boards should be looking for, and they include:

An obsession with acquiring prestige, power and wealth.” This, coupled with an inability to delay gratification, suggests that a chief executive may put his interests ahead of the company’s.

A reputation for shameless self-promotion and other self-aggrandizing behaviors.”

A tendency to create “grandiose strategies” without including a detailed plan for how they will be carried out.

The ability to compartmentalize and rationalize to an amazing degree. This trait, Mr. Leap writes, is shared by dysfunctional people, among them bad chief executives and criminals. Clearly, even the best chief executives occasionally exhibit some of these traits. “Potentially bad C.E.O.s, however, usually possess several of these characteristics and they exhibit them repeatedly,” he writes.

Mr. Leap says his message to corporate boards is simple: in the late stages of the selection process, spare no expense in digging deeply into a finalist’s background.

The article is definitely worth reading.

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