DISRAELI GROUPLeadership | reputation | legacy

Developing Leadership for Humility not Hubris

Collaborative Event: ICF, AC and EMCCIrish Management Institute

23 September 2016

Agenda - suggestion• What is Hubris?• Trust and Crises – Why Worry?• Sharing:– Experience of a Crisis– Legacy Cycle– Lifecycle model– Genesis Factors– Leadership Role Accelerators

• Practical Tips• Theory and References• Discussions and Questions

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Introductions

• In small groups (5 mins):–Why are you here?–What do you want out of today?–What do you NOT want?

• Feedback and contract for the morning

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What is Hubris?• Athens 5th century BCE = excessive pride, acting without

respect, association with wealth, maleness, sexual violence, dishonour (and enjoying that dishonour)

• Owen (2009) – Hubris Syndrome = diagnosable condition; selfish, image conscious, messianic, excessive confidence, loss of contact with reality, incompetence.

• Ghaemi, Liapis and Owen (2016) risk factors: lack of realism, lack of empathy, some mental illnesses, narcissism, some drugs, male gender.

• Ghaemi (2011) protective factors: depressive realism, hyperthymic temperament, female gender.

• It isn’t: Big 5 trait, same as narcissism, well understood.

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Hubris as Unchecked Intuition

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Intuition

Analysis

Balanced: Cognitive versatility – switching

cognitive gears

Source: Claxton, Owen, Sadler-Smith in Hubris in leadership: A peril of unbridled intuition, Leadership 2015

Hubris as Unchecked Intuition

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Intuition

Analysis

Post-hoc rationalisation of

intuitive judgements

Source: Claxton, Owen, Sadler-Smith in Hubris in leadership: A peril of unbridled intuition, Leadership 2015

Hubris as Unchecked Intuition

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Intuition

Analysis

Intuition decoupled from analysis and

unbridled

Source: Claxton, Owen, Sadler-Smith in Hubris in leadership: A peril of unbridled intuition, Leadership 2015

Why worry about hubris?

• Personal – experiencing results of hubris or suffering from it yourself as leader or coach?

• Professional – impact of hubris on own or client organisations?

• Political – impact of hubris on society, particularly societal trust, leadership and managing VUCA world complexity?

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Personal Crisis Case Study: Barclays LIBOR

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Thursday 28 June 2012

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Friday 29 June 2012

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Saturday 30 June 2012

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Sunday 1 July 2012

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Monday 2 July 2012

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Tuesday 3 July 2012

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Wednesday 4 July 2012

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Thursday 5 July 2012

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REFLECTION

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The Damage – Financial• Barclays was fined £290M by UK and US regulators for

LIBOR fixing: – The fine was reduced for cooperation– UBS was later fined £940M, RBS £390M, and Rabobank

£660M. – Deutsche Bank was fined $2.5 Billion in 2015– Total industry fines were $5.8 Billion for LIBOR alone

• The costs of internal investigations, extra legal costs and subsequent costs of extra compliance have not been quantified separately, but are several times higher

• Fines for Forex manipulation to date are over $10 Billion

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The Damage – Brand and Reputation

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Source: YouGov Daily Buzz Scores

computer outage

LIBOR story breaks

2010 lowest

18 Sep 2015

27 Sep 2015

The Damage – Brand and Reputation

21Source: YouGov Index Scores (composite index)

computer outage

LIBOR story breaks

2010 lowest

recorded

27 Sep 2015

Trust in Business Leaders vs. Politicians

Trust to do thefollowing:

Business Leaders Government Leaders

Correct issues within industries that are experiencing problems

26% 15%

Make ethical and moral decisions

21% 15%

Tell you the truth, regardless of how complex or unpopular it is

20% 13%

Solve social or societal issue

19% 16%

Source: Edelman Trust Barometer 2014 22

Three Types of Crisis

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Behavioural

FinancialOperational

© Disraeli Group 2015

Crises: increasingly fast, global and furious

• 28% of crises spread to international media within 1 hour• 69% spread internationally within 24 hours• 53% of companies’ share prices did not recover to pre-crisis levels within one

year• 58% of companies experienced significant disruption to operations• 53% lost revenue• Yet 25% of companies said they had ‘months’ of notice of the crisis before it

broke in the media, and 8% had ‘weeks’ to prepare• Nearly 10% of board directors left within six months of the crisis breaking; of

these nearly half stated publicly that the crisis was causal to their departure

Once a complex crisis breaks, you probably won’t keep up

Source: Freshfields: Containing a Crisis and Knowing the risks, protecting your business 24

REFLECTION

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Questions for this audience

• What can and should you do to reduce your clients’ risks of hubris and crisis?

• Can/should we use clients’ self-interest and identity with their organisations to help protect them from hubris?

• Can employees protect leaders?• How do you manage your own risks of hubris?• What do you do when you think your client is

suffering from hubris?

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The Legacy Cycle

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Leadership

ReputationLegacy

DG

If you have an issue with one, it is related to the others

GENESIS• A recognisable brand• Rapid Growth• Success, praise and recognition• Weak Governance

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CRISIS• Behavioural, Operational or Financial• Issues become crises• Responses• Reactions

HUBRIS• Senior people out of touch• Lack of respect for dissent• Arrogance and grandiosity• Lack of attention to warning

signs

CATHARSIS• Ritual cleansing• Forgiveness from society• Renewal of social contract

© Disraeli Group 2015 28

Leadership

ReputationLegacy

NEMESIS• Public shaming• Betrayal of trust• Loss of reputation• Organisation failure

METAMORPHOSIS1. The real thing – gives

opportunity for real catharsis and change

2. False change – failure to deal with the deep cultural and systemic issues

DG

Source: Pariahs: Hubris, Crises and Organisational Reputations, by Matt Nixon

Genesis Conditions• Rapid Growth

– Creates sense of momentum, change and vigour– Decreases relevance of previous experience– Creates stresses on systems, processes, leaders, cultures

• Recognisable Brand– Creates big promises– Instant recognition and equivalency with others

• Success and Praise– Feedback loop that suggests things are going well– Reinforces current ways of working, leading are correct– Tends to correlate well with growth and brand

• Weak Governance– Board and/or Regulator not ahead of issues and unable

to challenge effectively

29© Disraeli Group 2015

Source: Pariahs: Hubris, Crises and Organisational Reputations, by Matt Nixon

Leadership Role Accelerators

1. A need for frequent, rapid decisions2. Access to resources 3. Requirement to present oneself as a strong leader

internally and externally4. Isolation for reasons of wealth and ‘security’5. Isolation by nature of the office6. The glamour of power

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Source: Pariahs: Hubris, Crises and Organisational Reputations, by Matt Nixon

© Disraeli Group 2015

REFLECTION

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Hubris in Ourselves

• What are the dangers for us as coaches or consultants?

• How would we know we were suffering?• How can we defend ourselves and protect each

other?• Need for vigilance

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REFLECTION

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Tips for Practitioners• Start where the client is: “Stay Alive”• Get the contract right – links to legacy and reputation• Encourage curiosity and linkages to models and ideas• Don’t collude with them – stay humble, curious, wise• Learning not knowing• Sustainability and diversity as values• Reduce threats without pulling punches• Be courageous – taking risks even while humble• Level the playing field to enable honesty• Engage your supervisor in theory and learning

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Closing Thoughts

• What struck you most today?• What else do you need to say or ask?• How can you best integrate today’s ideas into your

own coaching practice?

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SOURCES

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Tools and Sources

• Daedalus Trust: Summaries and links to c. 500 articles, books and tools. http://www.daedalustrust.com

• Disraeli Group website: papers, models, blogs and today’s slides. http://www.disraeligroup.co.uk/phdi/p1.nsf/supppages/6629?opendocument&part=5

• The Intoxication of Power (Methuen 2015): best collection of recent articles linking hubris to psychology and practice

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Hubris Bibliography

• Atherton, Marc. Hubris Syndrome – Metrics and Meaning. Guest blog for Daedalus Trust, 2015. Retrieved from http://www.daedalustrust.com/guest-blog-hubris-syndrome-metrics-and-meaning/

• Clance, P.R.; Imes, S.A. (1978). "The imposter phenomenon in high achieving women: dynamics and therapeutic intervention.". Psychotherapy: Theory, Research and Practice 15 (3): 241–247.

• Furnham, Adrian. The elephant in the boardroom. Palgrave Macmillan, 2010.

• Garrard, Peter and Robinson, Graham, eds., The Intoxication of Power: Interdisciplinary Insights, London, Palgrave Macmillan, 2016.

• Ghaemi, Nassir. A first-rate madness: Uncovering the links between leadership and mental illness. Penguin, 2011.

• Ghaemi, Nassir, Liapis, Christos and Owen, David, The Psychopathology of Power, published in Garrard and Robinson op cit, 2016.

• Hill R.W. & Yousey, G. (1998). Adaptive and maladaptive narcissism among university faculty, clergy, politicians and librarians. Current Psychology, 17(2/3), 163-169.

• Hoffman, B.J., Strang, S.E., Kuhnert, K.W., Campbell, W.K., Kennedy, C.L. and LoPilato, A.C., 2013. Leader Narcissism and Ethical Context Effects on Ethical Leadership and Leader Effectiveness. Journal of Leadership & Organizational Studies, 20(1), pp.25-37.

• Maccoby, Michael. "Narcissistic leaders: The incredible pros, the inevitable cons." Harvard Business Review 78, no. 1 (2000): 68-78.

• Malkin, Craig, Rethinking narcissism : the bad - and surprising good - about feeling special, New York, 2015.

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Hubris Bibliography 2

• Nadler, David A. "Confessions of a trusted counselor." Harvard Business Review 83, no. 9 (2005): 68-77.

• Nixon, Matt. Pariahs: Hubris, Reputation and Organisational Crises. Libri Publishing, 2016.

• Oskamp, S (1965), ‘Overconfidence in case-study judgments’. The Journal of Consulting Psychology, 29, 261-265

• Owen, David, and Jonathan Davidson. "Hubris syndrome: An acquired personality disorder? A study of US Presidents and UK PrimeMinisters over the last 100 years." Brain 132.5 (2009): 1396-1406.

• Owen, David, The Hubris Syndrome: Bush, Blair and the Intoxication of Power, Methuen, 2012.

• Petit, Valérie, and Helen Bollaert. "Flying too close to the sun? Hubris among CEOs and how to prevent it." Journal of business ethics 108, no. 3 (2012): 265-283.

• Roll, R., 1986. The hubris hypothesis of corporate takeovers. Journal of business, pp.197-216.

• Ronson, Jon. "So you’ve been publicly shamed." London: Picador, 2015.

• Schwartz, Howard S. Narcissistic process and corporate decay: The theory of the organizational ideal. NYU Press, 1992.

• Talent Quarterly, The Dark Side Issue. Issue 8, 2016.

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EXTRA SLIDES

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The Damage - Talent• In the space of a week we lost our Chairman, CEO, and COO

– Within two months, the Group HRD also left• Shock and impacts on engagement at all levels

– Staff in branches faced irate customers (though some brought cakes!)– People wanted to know how this happened and who was responsible– Felt defensive to the brand, but not to those who were accountable

• No immediate uptick in employee turnover, but external headhunter activity increased dramatically

• Great interest in the next CEO and the values and changes ahead• Barclays fired five staff; others were disciplined or had previously left

the bank• Several ex-Barclays staff were recently convicted for their roles in the

LIBOR scandal.

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Appendix - Owen’s Model (from Brain 2009)

• Symptom • Corresponds to DSM-IV

• 1. A narcissistic propensity to see their world primarily as an arena in which to exercise power and seek glory • Narcissistic Personality Disorder (NPD).6

• 2. A predisposition to take actions which seem likely to cast the individual in a good light - ie in order to enhance image

• NPD.1

• 3. A disproportionate concern with image and presentation • NPD.3

• 4. A messianic manner of talking about current activities and a tendency to exaltation • NPD.2

• 5. An identification with the nation, or organization to the extent that the individual regards his/her outlook and interests as identical

• Unique

• 6. A tendency to speak in the third person or use the royal ‘we’ • Unique

• 7. Excessive confidence in the individual’s own judgement and contempt for the advice or criticism of others • NPD.9

• 8. Exaggerated self-belief, bordering on a sense of omnipotence, in what we personally can achieve • NPD.1 and 2 combined

• 9. A belief that rather than being accountable to the mundane court of colleagues or public opinion, the court to which they answer is: History or God

• NPD.3

• 10. An unshakeable belief that in that court they will be vindicated • Unique

• 11. Loss of contact with reality; often associated with progressive isolation • Antisocial Personality Disorder APD.3 and 5

• 12. Restlessness, recklessness and impulsiveness • Unique

• 13. A tendency to allow their ‘broad vision,’ about the moral rectitude of a proposed course, to obviate the need to consider practicality, cost or outcomes

• Unique

• 14. Hubristic incompetence, where things go wrong because too much self-confidence has led the leader not to worry about the nuts and bolts of policy

• Histrionic Personality Disorder HPD.5

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How are Reputations Transferred?• Personal- thecirclesofpersonalintimateswhoactually

knowtheperson(ororganisation)inquestion.Personalreputationsemanatefromtheseintimategroups,butwemodifyourbehaviour forothersinthesesettingsbecause“oftheoptionsthatreputationsopenandclose,andbecausethesereputationsallowustoconceiveofourselvesinparticularways.”

• Mass-mediated- inanageofmediasaturation,highstatusisbestowednotonlybyformalrolebutbycelebritydictatedbythepress- where“themediahelptodeterminewhoweshouldknowaboutandcareabout”

• Organisational - organisations havereputationstoo,whichareoftencloselylinkedtothereputationsoftheirCEOs.Finenotesthat“Inacountrywhereacorporationislegallyaperson,theexistenceofcorporatereputationsthatmirrorcelebrityreputationsshouldnotbesurprising.”

• Historical - atsomepointknowledgeofothersbecomes“institutionallysanctioned”aspartof“settledculturaldiscourse”andareputationisthensealed.Wherethefacts,ortheinterpretationofthefacts,remainscontentious,wemaytrytopacifyorignoretheargumentbyskippingovertheissue(aswiththeCivilWarinSouthernstates).

Source: Adapted from Difficult Reputations, by Gary Alan Fine

Personal

Mass-mediated

Organisational

Historical

Current Orthodoxy on “Reputation”CLAIM IMPLICATION ACTION DG VIEWPOINT

Reputation is Relational

Get relationships right and you can influence

reputation

Build relationships with stakeholders directly, especially customers, regulators, investors,

government

True, but remember you can’t always control or contain who chooses to relate to or with you

Multiple Reputations

Reputations can be managed differently with different groups

Create messages and communicate differently with different audiences

True, but excessive balkanisation is problematic; don’t leave all synthesis to the

CEO and the Board

Reputation Intermediaries

Some people’s views matter more than others

in determiningreputation

Get close to and influence the influencers (especially

press, government and social media influencers)

True, but in the age of Twitter you may be surprised at where

critical positive and negative intermediaries arise

Signalling Power What matters is the signal and who shapes it

Invest heavily in signals and signallers (ie

Brand/Corporate Affairs/Comms)

What matters is the truth that lies behind the signal. You

can’t put lipstick on a bulldog forever

Source: Disraeli Group Analysis based on Oxford Said Business School Centre for Reputation

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What’s the risk of “excessive” stigma?

Excessive High Medium Low

Constant and/or catastrophic crises threaten reputation

Frequent and/or major crises threaten reputation

Some crises that raise issues about reputation

No major recent crises orreputational challenges

Societal disapproval hits an inflection point that makes it impossible for supporters to continue; political support evaporates

Many significant societal groups disapprove of your organisation’sexistence as well as many or most of its activities

Some focused and influential societal

groups and individuals disapprove of your organisation or its

activities, in context

Few or no groups or influential individuals

disapprove of the organisation or its activities

in any context

Press and social media commentary becomes overwhelmingly toxic, irrational and vindictive

Press and social media commentary typically or mainly negative

Some growing negative press and social media

commentary

Press and social media commentary is consistently

positive

Licence to operate removed (literally and metaphorically)

Measurable impact on licence to operate

Emerging threats to licence to operate

Licence to operate is extensible to new areas

Source: Disraeli Group Analysis

Degree of Stigma

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Working for the Pariahs – Loyalists

46© Matt Nixon 2014

• Often long service, perhaps low in the hierarchy

• Have or inherit pride in the organisation built before the crises hit

• May deny the issues, or argue they are misunderstood and misrepresented by outsiders

• Focus on their colleagues and stakeholders who accept them, regard those hostile to the organisation as enemy

• Experience crisis as deeply painful and personal

• Regard organisational failure as equivalent to personal failure and defend accordingly

Working for the Pariahs – Mercenaries

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• Can have long service, but typically move organisations more than loyalists

• Are aware of the issues and accept the reality

• Get over the initial shock of crisis quickly

• Focus on stakeholders who are positive and supportive

• Accept the impact on their own personal brand

• Accept their own need to move on when their work is done or they are surplus to requirements

© Matt Nixon 2014

Working for the Pariahs – Heroes

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• Often join the organisation to change it

• Accept and understand the issues are real

• Can be overtly critical of the organisation and its previous responses

• May even seek out critical stakeholders

• May struggle with loyalists, mercenaries and external stakeholders who accept the pariah as is.

• They may welcome crises, as they are opportunities to force change, and opportunities to do act heroically.

© Matt Nixon 2014