Leaving

It is informative to look at the corporate exits in the face of self blind leaders. Both CityGroup and AT&T in the last decade have seen their senior staff leaving to head up a wide range of banking and Telecom companies. And it is no less important to reflect on the months of disillusionment and frustration, and the cost of wasted talent of these departures.

But these are not the only significant costs. There are two others that are ignored. The first is that losing key management critics leaves behind a group of yes-men / dependent senior staff or, at worst, it creates a culture of fear, where the only criterion of decision-making is to try to anticipate and then placate the thinking of the leader! Let me give you a further example from Hitler.

Hitlers own mode of life was spartan. Understated uniform, a teetotaller, whose only real passion seems to have been for sweet cakes and endless monologues about the world order to his long-suffering team of secretaries and assistants. But his dictatorial aloofness had created years of fear amongst his team. Few survived who had criticised his leadership. Hitler, as we know, had lived through a pattern of parental abuse that created the self-absorbed relentless dictator of Germanys Third Reich.

Goerings denial took the form of an almost literal cover-up in jewels, uniform, titles and also a frantic refusal to confront the issues in front of him. Geoffrey Ryans book on Great Military Blunders (mentioned earlier) quotes the description of John Dollibois (former US Ambassador to Luxembourg).

“Goering” he writes "…. was a clown. I was curious from the psychological standpoint with the dressing up in a Roman toga which he did or dressing up in the Reichmarshalls uniform, the equivalent of a seven-star general, the highest military rank in the history of the world. He wore jewellery, he collected emeralds and they werent just modest rings, he had a ruby and an emerald and a diamond ring that were fabulous. He had one particular emerald which was about an inch in length and half an inch wide, the biggest emerald I had ever seen and probably the biggest in existence and his decorations were not silver or gold, they were platinum. His Pour le Merité, the highest military award which he received for his bravery during World War One was diamond encrusted; his watches were solid gold, encrusted with jewellery and all of that was part of his show and he had to wear that along with his Reichmarshalls uniform.”

Geoffrey Ryans description points to someone out of his depth, afraid of his Führer and looking for any opportunity to avoid facing up to the challenges and decisions in front of him. Far from being the genius leader of the Luftwaffe, his career was dependent on early personal heroics and his later political role. As a war leader his "achievements" read as a contents list in a book of military blunders. He cancelled plans for the German four-engined bomber during the 1930s, and so robbed the Luftwaffe of the chance to destroy London and Soviet industry behind the Urals. His failure to destroy the British forces at Dunkirk by "air power alone" allowed the Royal Navy to achieve the evacuation of 300,000 Allied troops, without which the pressure on Churchill to make peace would have probably proved irresistible. Openly criticised by Hitler, Goering had, by the 1940s, become no more than an acolyte, covering up his own inadequacies with a combination of self-indulgence, impulsiveness and old boy memories of the past. But nothing could cover up his fear of Hitler and his need to please him.

And all came to a head on November 19 1942 with Operation Uranus, the Soviet counter-attack on the German 6th Army besieging Stalingrad. Hitler wanted to organise a relief army and needed assurances that, in the meantime, the Luftwaffe could provide adequate supplies. Goerings own deputy, Jeschonnek, agreed, himself doubtless blighted both by Hitlers insistence, feeling exposed by the lack of Goerings presence and aware of the Reichmarshalls toadying. Goering immediately supported this flight of unreality, even though Jeschonnek by now realised his mistake. Goering overruled his own officer and resolutely walked away for a shopping trip in Paris. The airlift failed entirely. The consequences were appalling. General Von Pauluss 6th Army remained at Stalingrad, rather than trying to break out, and 250,000 troops were condemned to death in Soviet camps.

Goerings incompetence was that of the frightened yes-man. It is worth noting that Hitler was no less a part of this sequence of events, and no less culpable. Emotionally committed to his own genius, his drive to win Russia, he would tolerate no challenges. The original strategy to attack Russia had been questionable itself. It meant stretched lines of communication, the winters were severe. But Hitler brooked no argument, exaggerating the capability of his own troops and understating those of the enemy. According to Colonel General Franz Halder, his Chief of Staff, when it was pointed out to the Führer that Stalin had 1,500,000 men in the region north of Stalingrad “he flew at the man, with clenched fists and foam in the corners of his mouth…Hitlers decisions had ceased to have anything to do with rational strategy…They were the product of a violent nature which acknowledged no bounds to possibility and which made the wish the father to the deed."

Small wonder that Goering left for Paris as soon as he could!

Hitler had created frightened yes-men afraid to challenge his own blind resolve. There was no room for confronting the “undiscussables”, no tolerance of saying the unsayable. The world of business is not so different.Many of those who ultimately fight their way to the top do so by a heady and frightening mix of cajolery, charm and bullying (see later chapters).

Throughout our lives we learn habits and behaviour patterns. In the main these are helpful, they support our strengths and reinforce our ability to cope with external stress. However, for some, behaviour patterns have been developed from the start to help block out threatening experiences or to compensate for them. The subsequent compulsive efforts to cover up the area of hurt throws the logic of their lives into disarray. They start to cover up, fantasise, look away from reality and can become driven characters. They do not listen well, they reject criticism, they find it difficult to make working and constructive adult relationships. Unfortunately, they are also most likely to seek glory, to be ambitious, and to be willing to walk over others. It is from this pool that we draw most of our "leaders", our "winners".

These are the very people most likely to leap at the immediate glory of M&A, to pay too high a premium, to reject internal criticism out of hand, to be least sensitive to the fears and needs of the staff involved. We are in a boardroom world of egos, clashing Alpha Males often spurred on by the press and by Wall Street, even admired by unthinking members of society.

In my own study of M&A activities I found many acquisitions driven by such blind egos. And, in most cases, such was their drive for yet more and larger glories, that they paused rarely to complete the deal, and never to look back, reflect and learn the lessons of past mistakes. Indeed, I found few who introduced and followed an objective measurement of the performance of the deal. There were few who "closed the learning loop" later to see how well the plans played out. And there were few with the resolve to pull out from a deal as it started to go wrong.

"You need someone to watch over the very process of the acquisition. The CEO and his team will experience the special thrill that comes with spending large sums of money, negotiating through the night, heavy selling from the target CEO, all in conditions of secrecy that eliminate the normal checks and balances. It is all too easy to convince oneself that success in the chase is what matters rather than long term results." (CEO with 15 Acquisition "Medals")

Fear can be as rife in the boardroom today as it was in Hitlers Berchtesgaden in 1942 – it leads to a lack of deliberate care and follow-through, to turning a blind eye to possible failure, and an almost institutionalised incompetence. Here are some of the words of people, who have lived through the day-to-day experience of fear in the boardroom.

“Companies were being bought up willy-nilly. I became involved with more than 11 of them. The first thing to do was find out what we bought – no-one knew."

"The ultimate irony was that, as soon as he had won acclaim for doing the deal, he lost interest. He wasnt interested in the massive problems of making it work. I think he was frightened to look into what he might have bought."

"We agreed to ridiculous targets because we knew they would never be checked. No one ever asked whether the takeover worked, no one checked whether it met the quite crazy claimsoriginally made – they were too frightened of what they might find."

"We were under threat from the City, our reserves werent good enough – but who would know? So we changed the figures, we changed the benchmarks – government does it all the time, why shouldnt we?

The "abused child", whether at home or at school, creates its own fantasies to cover up its anxiety. Whether the Kaiser or Hitler or Chamberlain, this leads to the need for blind support. They resist criticism, no matter how well meant, as a personal challenge. Key staff leave, those who remain tend to be yes-men. There is no built-in check or balance to the hero/leader. They come to believe in their own infallibility. Kaiser Wilhelm even reintroduced the concept of the divine right of kings. These are historical figures to register the story in your minds. But the parallels with todays leaders of political parties and business organisations remain close.

This book is concerned with management and leaders – understanding why they turn out as they do – as leaders. Not all leaders come from abused childhoods; you dont have to have suffered in order to qualify. By the same token many, perhaps most, given the current divorce rates, live with unhappy and tense home memories, and yet do not need to hide within a Phaeton fantasy world. Although the experience of an unloving childhood takes its toll, it does so in many ways. There are many whose lives have been hamstrung by the early days. Far from seeking satisfaction from ever more glorious success, they have been driven instead by a sense of hopelessness, of inevitable failure to a life of nay-saying, of refusing to take risks, and to the despondent unhappiness of living with a life they always see as half-empty, rather than nearly full. Just because they may not be leaders today, in the high-flying sense of the term, does not mean we should ignore them. Their numbers are far greater than the Phaetons and, in their own silent way, they need help and affectionate support as much as do their more glamorous brothers and sisters. They make up much of middle management and they frequently lead extraordinarily complex and demanding lives. They are the silent sufferers.

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