Sector News

Why Chief Executives Fall From Grace

September 29, 2015
Borderless Leadership

How do accomplished leaders lose control of their thinking, impulses and behavior to such extremes that they risk and forfeit the vast rewards of their skill sets and productivity?

Consider the recent arrest of former Mt. Gox CEO Mark Karpeles for allegedly stealing millions of dollars from clients. Or Jon Mills, the founder and former CEO of real-world analytics startup Motionloft, being arrested by the FBI for lying to investors about the acquisition of his company while spending capital freely.

Charlie Shrem of BitInstant arrrested for laundering money for online drug bazaar Silk Road. Or Oncologist Dr. Farid Fata being sentenced to 45 years in prison for prescribing cancer treatments to more than 550 people without cancer and defrauding Medicare to gain multi-millions in revenue.

Then there are people like Bill Cosby in entertainment, not arrested, but his reputation after decades of building it, now in shambles, or recently-disposed Subway pitchman Jared Fogle, an everyman who hit the fame and fortune lottery, being arrested for sexual relations with underage females and likely facing incarceration.

What can we learn from their failings?

Is it really as simple as right and wrong, black and white? At the core of the problems are some or many of these factors:

  1. Our emotional drivers based on unhealthy or entitled) thinking
  2. The thrill of the con (for some, getting away with exploitation produces adrenaline)
  3. Lack of emotional intelligence skills:
    • Self awareness (of our destructive and self-destructive thoughts)
    • Social awareness (how well are we, if at all, able to recognize other people’s emotions)
    • Self regulation (our proficiency at controlling our negative thoughts and behavior)
    • Motivation (willingness to learn healthy skills)
    • Relationship management (empathy towards others and controlling our impulses and behavior)

Recognition

Falling to depths is not a here-one-day, there-another process. It’s a continuum. We have the ability to recognize the descent and forcefully stop it of others or ourselves.

Preventive action

We can look for signs in the people we lead or ourselves and create a culture where we are receptive to hearing respectful feedback, even if unflattering, to protect our organizations and ourselves. We can institute these safeguards by empowering a small group of ethical, trusted supporters to provide input without fear of retribution. We can work on self development, which most executives do and when necessary, seek coaching and periodic follow up sessions. We don’t have to see our people cause destruction, high cost and pain to our companies or be the cause of it by our own actions. When we do, it’s more negligence than surprise.

By Michael Toebe

Source: CEO

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