why smart executives fail

7/31/2019 Why Smart Executives Fail

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Why Smart Executives Fail:And What You Can Learn from Their Mistakes

Professor Sydney FinkelsteinSteven Roth Professor of ManagementTuck School of Business at Dartmouth

www.whysmartexecutivesfail.com

The Turnaround Finance GroupSpring Event at Kasteel Nyenrode

April 16, 2005


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Why Smart Executives Fail

ExecutiveMindsetFailures

Delusions of aDream Company

Confidential. Do not quote or copy without written permission. Sydney Finkelstein, 2003.

OrganizationalBreakdowns

LeadershipPathologies


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The Commission on the Intelligence Capabilities of theUnited States Regarding Weapons of Mass Destruction

March 31, 2005

Analysts did not question the hypotheses underlyingtheir conclusions, and tended to discount evidencethat cut against those hypotheses.


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Why Smart Executives Fail

ExecutiveMindsetFailures

Delusions of aDream Company


OrganizationalBreakdowns

LeadershipPathologies


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I. Executive Mindset Failures


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Executive Mindset FailuresStrategy gone bad: doing the wrong thing

Inaccurate view of reality

Negative transfer

One best way

Ignoring change

The Perfect StormFallacy

WebvanMotorola

NapoleonSnapple

Saatchi & SaatchiRubbermaid

Boston Red SoxBritannica

LTCM

Chrysler


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II. Delusions of a Dream Company


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Delusions of a Dream Company How Executives avoid facing reality

The Firm

Just Say No

Disrespecting competitors

Customers and suppliers arewrong!

EnronInternet Start-ups

Barings Bank Snow Brands

BarneysInternet Start-ups

SchwinnRubbermaid



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III. Organizational Breakdowns


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Organizational Breakdowns Tracking down the lost signals

Communication and control breakdowns

Break all the rules

No oversight

Inappropriate incentives

Boston Red SoxBlack Hawks 1994

Saatchi & SaatchiBankers Trust

WorldComSony

MotorolaLucent



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IV. Seven Habits of SpectacularlyUnsuccessful People


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Habit # 1: Illusion of PersonalPreeminence

Corporate ExamplesMartha Stewart

Mossimo


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Habit # 2: The Company is Mine

Corporate Examples

Adelphia

Tyco


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Habit #3: All the Answers

Corporate Examples:

Wang Laboratories

Rubbermaid


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Habit #4: My Way or the Highway


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Habit # 5: Obsessed with Image


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Habit # 6: Disregarding MajorObstacles


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Habit # 7: Inability to Learn


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Top 5 Takeaways

1. Test assumptions!

2. Teams win more than leaders win.

3. Make it easy to tell the truth.

4. Track warning signs like your business depended on it.

5. Only dead companies make no mistakes.
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why smart executives fail

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