Everyone is looking for people with the potential to be successful – but there are some roles, where the potential of getting it wrong, can outweigh the benefits of having a high potential, high performer in place. The reality is that in many cases, those who turn out to be a major liability, give an impressive impression of high potential and high capability.
Remember Gerald Ratner, the entrepreneur who created the multi-million jewellery business, and in one statement (“People say. ‘How can you sell this for such a low price?’ I say, because it’s total crap”) wiped out an estimated £500m from the value of the company. How about Nick Lesson? – The golden boy of Bearing Bank, whose actions resulted in the sale of the 200-year establishment for £1.
It is not just the colourful characters that hit the news that can become a liability. In August 2007, British Airways was fined £270 million after it admitted that one of its senior managers tried to colluding with Virgin Atlantic over fuel surcharges and price-fixing on cargo flights.
So think about those high hitters who leave carnage behind them. It is a very difficult to challenge or argue against them; let alone stop them. As from performance perspective, they close major deals, lead complex projects to successful completion, create innovative products, attract clients, and deliver spectacular operational and financial results. Organisations try to learn to live with their shortfalls and justify it by saying that the business depends on them for its success. This is probably true, but only up to a certain point. In the long-term they can cause unacceptable collateral damage, and might bring the organisation to ‘its knees’. In safety-critical industries such as oil exploration, aviation, and medical care, there is plenty of evidence that such disruptive behaviour can cause life-threatening errors.
There are several reasons as to why do talented people derail in spite of their brilliance, and why they do not address their weaknesses before they cause havoc. One of the most common reasons is their lack of insight. They dismiss potential weaknesses as unimportant, redefine them as part of their ‘charm’, ‘style’ or even ‘secret of success’, and blame others for “overreacting”. What’s more, It is customary in many organisations to approve such actions by subscribing to cultural statements such as “I didn’t get where I am today by taking the soft approach or by being nice to people”; “we could do with a bit of backbone” or “It’s time we told it to people as it is – they need to know what is what”.
There is an organisational trap here – I call it HR² – it is an acronym for ‘High-Risk – High-Return’. The challenge for organisations with such high-risk high-return individuals is to retain their talents whilst minimising the damage they cause along the way.
The Center for Creative Leadership (McCall and Lombardo) researched executives who were viewed as technical gurus or tenacious problem solvers, but under demanding job pressures their strengths turned into liabilities that become costly and highly noticeable for the organisation. The study identified four sets of characteristics that can lead to such derailment – these were: (a) problems with interpersonal relationships (such as arrogance, aloofness, coldness and detachment); (b) problems with execution of business objectives (such as betraying trust, failure to follow through); (c) problems with inability to lead a team; and (d) problem with managing change or adapting to transition (such as limited strategic capacity; over-controlling). Likewise, Robert Hogan, one of the leading figures in the study of leadership derailment, used taxonomy of mental disorders that manifest themselves in a subtle way in organisational life and in the behaviour of derailed leaders. He categorised the characteristics that derail high flyers’ careers and cause negative consequences for their organisation into eleven derailing characteristics. He calls these the “dark side” of personality – the characteristics that are not normally apparent but which emerge when an individual is under great pressure (see the following table).