I’ve missed over 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times I’ve been trusted to take the game-winning shot . . . and missed. I’ve failed over and over and over again in my life. And that is why I succeed.
Michael J. Jordan, former professional NBA basketball player, entrepreneur, and majority owner in the NBA’s Charlotte Bobcats.
If you are an executive reading this article, you are probably more interested in reading about how to succeed, rather
than about how not to derail. But both perspectives are important, and there are important lessons to be learned from seeing how others have derailed. If nothing else, you will want to avoid the mistakes made by the three executives I’m going to talk about, so read on.
The available literature on this topic is endless. Just do a Google search on “why executives derail” and you will find hundreds of articles and studies on the topic. You will find academic works from universities and studies done by organizations focusing on leadership development. There is much commentary from consulting firms engaged in executive coaching, and—certainly reflective of our times—chatter in the social media venues.
Do a risk assessment:
How do you stack up against the factors that are the most common causes of derailment? You can prevent your own.
Companies are very interested in this topic, and rightfully so, due to the high cost of executive turnover in terms of time and money. But you should be interested for the same reasons: the time it will take you to find another job, and the risk of having no income if you haven’t found a comparable position after your severance runs out (if you got any in the first place). Furthermore, if the derailment results in termination, you and your family will also have to bear the emotional toll that often results.
The Experts Have Spoken
I’ve relied primarily on two resources for background on this topic. For several decades the Center for Creative Leadership (CCL), a non-profit organization focusing on leadership education and research, has been conducting derailment studies. The 1995 study done by two researchers at CCL, Van Velsor and Leslie, is still considered to be the classic study on derailment. The second resource is the research reported in the 2009 book, Real Time Leadership Development by Yost and Plunkett.
Van Velsor and Leslie at CCL identified four general themes that accounted for executives failing or derailing. They include:
- problems with interpersonal relationships,
- failure to meet business objectives,
- failure to build and lead a team, and lastly,
- the inability to change or adapt during a transition.
(“Why Executives Derail: Perspectives Across Time and Culture,” Academy of Management Executive, 1995)
Yost and Plunkett list “The 10 Deadly Sins” that they believed were the most common causes of executive derailment. They identified the following causes: poor performance, a failure to adapt to change, arrogance, unrecognized blind spots, the failure to build a strong team, the failure to build a strong network, poor working relationships, the inclination to avoid stretch assignments, unethical behavior, and just plain bad luck. (Real Time Leadership Development, Wiley-Blackwell, 2009)
Comparing the causes in the two studies shows that many of the causes in the more recent study do fit into the four categories from Van Velsor and Leslie’s 1995 work. Of the 10 categories listed by Yost and Plunkett, only three do not readily fit into Van Velsor and Leslie’s model. These three are: the inclination to avoid stretch assignments, unethical behavior, and just plain bad luck.
From my own experience, both as an executive and as the head of H.R. in dealing with executives, I have seen evidence to support Yost and Plunkett’s additions.
The “inclination to avoid stretch assignments” signals either a lazy executive or one who is afraid to take chances because they might fail. In either case, these are not traits companies want to see in their executives. Companies want executives who are willing to take calculated risks and take initiative. “Unethical behavior” was not on the radar screens of most companies until the scandals involving executives at Enron, Tyco International, and WorldCom were exposed. Since the Van Velsor and Leslie research was done in the early 1990s, these scandals had not yet been exposed and the Sarbanes-Oxley Act of 2002 (a federal law that created standards for U.S. public company boards, management, and public accounting firms) did not exist. Had circumstances that led up to the 2002 law been so thoroughly exposed in the early 1990s, Van Veslor and Plunkett would certainly have included unethical behavior as a cause of executive derailment.
And what about “just plain bad luck”? I am a believer that timing is everything—well, maybe not everything, but it counts for a lot. When you’ve lived a lot a years, you’ve had the opportunity to witness this phenomenon first-hand. The best, and perhaps the classic, example is the executive who is hired and six months later, the person who hired him leaves the company for a better opportunity. The executive now has to adjust to a new boss who turns out to be Attila the Hun.
Van Velsor and Leslie’s four themes, combined with Yost and Plunkett’s Ten Deadly Sins, seem to cover the major factors that lead to executive derailment. So, let’s look at some real cases that resulted in executives being derailed. These three cases all come from my experience as a senior human resources officer.
Case 1: The Failure to Meet Business Objectives
This is one of the most common reasons for executive derailment, because it is quantifiable and objective. Most
companies measure and reward executives according to performance: Do they meet objectives? Although business objectives vary widely, financial objectives count more than others: do the metrics show that you’re getting the job done? A New York Times headline (February 19, 2012) says it all: “Ford’s Mr. Inside, In Sight of the Crown, the Heir Apparent, Yes, As Long As His Numbers Soar.” The operative phrase in the headline is “as long as his numbers soar.” The article was about Mark Fields, president of Ford’s very successful North America division, and his chances of succeeding Mulally as CEO.
Let’s look at a case of a general manager whose numbers didn’t soar. In his first year on the job, the general manager’s division showed mediocre financial performance. Sales had slightly exceeded expenses and a small profit had been generated. In his second year, his objective was to increase sales by 10% and revenues by 15%. He committed to grow sales of existing products, and introduce a new product with significantly higher margins than existing products. At the same time, his goal was to reduce overall manufacturing costs by 10%. Everyone was optimistic that this would be the turn-around year for the division. The new product was released on schedule in April, manufacturing costs were tracking lower than budget, and existing sales seemed to be on target. Good news, after the first quarter of the year.
Unfortunately, by July 1st, it was evident that the new product was not being well received in the marketplace, despite advanced focus-group feedback that it would sell. The general manager insisted that lack of sales was just a fluke and, rather than adjust production downward, he continued to produce large quantities of the product. By the end of September, it was obvious that the new product was a failure and it would be difficult to unload the inventory that had been produced.
Not only had the new product failed, but manufacturing costs had increased compared to the previous year, existing product sales were flat, and the division was forecasted to have its largest loss ever. In October, the general manager was informed that he was being terminated, not due to the new product’s failure per se, but due to his insistence on continuing to produce the product when there was no tangible evidence to support doing so. The chairman had lost confidence in his ability to run the division. This was a clear case of not meeting business objectives.
Case 2: The Failure to Build a Team
This example illustrates that it is often a combination of factors that leads to an executive’s derailment. This senior executive was responsible for product development, reporting directly to the division head. She had been recruited from another company and was well known in the industry for her design talent. We didn’t know when we hired her that we had, in fact, hired two people. She was one personality when dealing with people at or above her level, and another personality when dealing with her subordinates.
She had only been with us about six months when one of her staff appeared in my office and wanted to talk. This employee wanted to let me know how abusively he had been treated by his new boss. He wanted to let me know what was going on, but didn’t want or expect me to do anything about it. This is always a dilemma for the human resources person—if the boss’ behavior is not illegal, unethical or discriminatory. There is not much you can do but honor the employee’s request.
About a month later, another employee showed up at my door with a similar complaint about the boss. She had been screamed at by the executive in front of her colleagues; she felt demeaned and shamed. She had made a product design change that the president of the company did not like. The irony of it all, according to the employee, was that it was actually the executive who had insisted on the design change, but was unwilling to admit this to the president. According to this employee, she felt betrayed by the executive and embarrassed in front of her peers. Unlike her colleague a month earlier, this employee wanted something to be done about her boss’ abusive behavior. Now I had two employees with the same complaint, but only one was willing to have it addressed by human resources.
I spoke to the president of the division, but I couldn’t get him to deal with his abusive manager. He was afraid she would quit if he confronted her. She was just too valuable and he didn’t want to risk losing her talent. Unfortunately, this is not an uncommon situation in corporate America. Unacceptable behavior is tolerated because an abusive boss is “too valuable.” But during the next year, the department suffered a 50% turnover rate and product quality suffered. The executive was provided with a professional coach to help her deal more kindly with subordinates, but her abusive behavior continued. Finally, we moved her to an individual contributor position with no one reporting to her. She was no longer considered for promotional opportunities, and her career prospects were damaged considerably.
Case 3: Be Careful What You Say
We relocated an executive who was running a small business for us in another country. We brought him to the U.S. as a general manager to run a similar business here. This executive had demonstrated good marketing, product development and management skills. He had P&L responsibilities and had consistently exceeded financial objectives for the small division he was running overseas.
Our company’s succession plan had identified him as high potential and he was slated to run one of our largest divisions within one to two years, provided he continued to perform as he had in the past. After nine months in his new job, all indications were very positive, his division was performing well, sales of existing products were up, a new product was about to be released and more new products were in the pipeline. By any of our financial measurements, he was doing an outstanding job.
As he was approaching the one-year mark, our superstar, high-potential executive did a performance review on his controller and gave the controller a copy of the review. Later that same day, the controller was reading the written review and noted it was his boss’ original copy with the boss’ hand-written notes. A little while later the controller appeared in my office and handed me the review. I couldn’t believe what I was reading. There was a very derogatory racial slur penciled in the margin. It was a totally inappropriate racist comment. I told the controller that this was a very serious matter and that I would investigate and get back to him by the end of the following day.
I did investigate the matter. Our high-potential executive admitted it was his handwriting and said he had inadvertently given the wrong document to his controller. He was very sorry, but knew the damage had already been done. He knew his career with our organization was over and he resigned.
Recovering from Derailment
It is worth noting that, in two of the three cases, the warning signs for potential problems were present. Had the signs been recognized and action taken early, perhaps derailment could have been avoided. Clearly, in the third case involving the performance evaluation, there were no advance warning signs that this was going to occur.
The good news for executives who derail is that there is life after derailment. If you are an executive who has derailed, you know what I’m talking about. Although painful at the time, many derailed executives—who have bounced back and given serious thought to what went wrong—say they’re learned very valuable lessons about themselves and the realities of the workplace.
If you are an executive who has never derailed, consider yourself fortunate, but do not become complacent. My advice is to do a risk assessment: how do you stack up against the factors that are the most common causes of derailment? If you do this, you might just head off a situation that could cause you to derail.
I can think of only one factor in the literature I’ve sited that you are virtually helpless to do anything about—and that is Just Plain Bad Luck. I wish you good luck on that one!