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Donald Trump & the CEO Syndrome: Chief Executives Don’t Want to Hear Bad News?

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That President Trump doesn’t like bad news is not news. However media accounts of his aversion to hearing anything short of „great“ got me thinking about what happens when senior business executives engage in the same type of behavior.

English Posts Erfolg & Management  Management Führung Leadership Köpfe Donald Trump Gesellschaft Poltik

Hier schreibt für Sie: Michael D. Watkins is Professor of Leadership and Organizational Change at IMD. He co-directs Transition to Business Leadership (TBL), a program designed for experienced functional managers who either have recently transitioned or will soon transition into a business leadership position.

What happens when Chief Executives Don’t Want to Hear Bad News?

A Washington Post’s piece on Trump’s reaction to negative comparisons of the size of his inauguration crowd beautifully captures the consequences:

„President Trump had just returned to the White House on Saturday from his final inauguration event, a tranquil interfaith prayer service, when the flashes of anger began to build. Trump turned on the television to see a jarring juxtaposition — massive demonstrations around the globe protesting his day-old presidency and footage of the sparser crowd at his inauguration, with large patches of white empty space on the Mall. As his press secretary, Sean Spicer, was still unpacking boxes in his spacious new West Wing office, Trump grew increasingly and visibly enraged.“

The result, as we know, was a hastily called press conference in which Spicer repeated easily debunked falsehoods about the audience size for Trump’s inauguration, and severely castigated reporters. In the process, he immediately and seriously undercut his standing with the media.

What is the CEO-Syndrome?

While arguably an extreme example played out in public, leader behaviors of the sort exhibited by President Trump are by no means unusual; they happen with senior business executives all the time. I call the phenomenon „CEO Syndrome,“ the dangerous propensity of some leaders not be able to deal with bad news, and the impact this has on everyone who works for them, and eventually on the health of their organizations.

Why is this a problem? Because leaders who can’t deal with bad news end up surrounded by people who either insulate them or tell them what they want to hear. The vulnerabilities this creates are obvious and potentially dire for their organizations. If bad news is denied or not even surfaced, crises are virtually inevitable. Issues that should have been raised and dealt with are submerged until they explode in damaging „predictable surprises.“

The Dangers of not dealing with reality

Beyond the well-recognized dangers of this sort of denial, leaders who can’t deal with reality make their subordinates deny reality too. In the process, these subordinates become utterly dependent on the leader, and are required to espouse and defend something that others in the organization can see is demonstrably false. This fascinating piece by Tyler Cohen at Bloomberg brilliantly captures the impact a bad-news-averse leader has on subordinates‘ behavior.

„By requiring subordinates to speak untruths, a leader can undercut their independent standing, including their standing with the public, with the media and with other members of the administration. That makes those individuals grow more dependent on the leader and less likely to mount independent rebellions against the structure of command. Promoting such chains of lies is a classic tactic when a leader distrusts his subordinates and expects to continue to distrust them in the future.“

In this way, the dysfunctions of the senior executive „infect“ the organization as a whole, again with potentially disastrous results.

No one is immune to the CEO Syndrome

While in some cases these behaviors are simply part of the leader’s core personality, no one, not even the best leader, is truly immune to CEO Syndrome. The position at the pinnacle of the organization comes packaged with the power to shape reality, at least until the walls cave in. It’s the extraordinary leader who never falls prey to the temptation to fence themselves off from the bad news, or let others insulate them or tell them what they want to hear to gain power. And it’s the extraordinarily brave (or foolhardy) subordinate who truly is willing and able to „speak truth to power.“

Especially at risk are senior executives who have been in the role for a significant time and gradually isolate themselves from criticism, surrounding themselves with people who create a comforting echo chamber. So don’t let it happen to you.

How do you avoid it?

  1. Create a culture where bad news get surfaced fast. As Colin Powell put it, „Bad news isn’t wine; it doesn’t improve with age.“ This means really being open to hearing that things have gone wrong, not shooting the messenger, and not telling the people who work with you „bring me solutions, not problems“ (plans yes, but not fully-baked solutions unless you want to slow down information flows.) It also means creating disincentives for people in the organization to conceal important information.
  2. Create and leverage a diverse network of advisors. Don’t build a team of clones. Cultivate and listen to people who provide different perspectives. Read broadly. Get out into the world. Refuse to let yourself get insulated and isolated.
  3. Build dedicated units to engage in environmental scanning, develop and explore scenarios, and provide early warning. Just don’t let it become a bureaucratic exercise.

Above all, keep in mind that your organization’s culture is powerfully shaped – for good or ill – by you the leader.


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