Corporate Leaders are Abandoning Ship

Today’s guest post is from Bob Herbold, the former Chief Operating Officer of Microsoft Corporation and author of What’s Holding You Back: 10 Bold Steps that Define Gutsy Leaders (CLICK HERE to buy your copy). You can read more about Bob at the end of this post.

We read a lot last month about the shameful leadership of Francesco Schettino, the Costa Concordia cruise ship captain who steered his vessel into risky, uncharted waters and then abandoned ship when it ran aground. The saga continued to play out last week when a group of survivors filed a hefty lawsuit claiming gross negligence and fraud. The defendants “acted in a severely reckless and willful, wanton manner, with complete disregard for the safety, lives and well-being of the plaintiffs,” said Marc Bern, a lawyer representing the passengers.

I’ve spent all of my life working in industry, first at Procter & Gamble, then as COO at Microsoft, and for the last ten years as a consultant. Along the way, I’ve met hundreds of high-level business leaders and I’m here to tell you, this captain’s behavior mirrors failures I’ve witnessed on a first-hand basis far too often over the course of my career.

Let’s take a look at three major leadership gaffs on the part of the ship’s captain and a few corporate examples that I find equally embarrassing:

Making a Risky Move with Inadequate Knowledge of or Protection Against the Risks: The captain admits there were no charts showing the reefs but he went ahead anyway. In fact, it seems he was on an ego trip, intentionally deviating from the standard route to “showboat.” Not too long ago we learned that the leader of MF Global may have been on his own ego trip, trying to achieve fame via a financial home run: he put his entire company at risk buying euro bonds with no protection on the downside to avoid a big loss. Strong leaders at times take risks, but only after understanding all facts and opinions, and putting appropriate safety nets in place.

When the Ship is Sinking, Failing to Quickly Develop and Implement a Plan to Deal with It: The captain was nowhere to be found when the ship hit the reef. Apparently the crew followed the behavior of the captain, since reports indicate the passengers were loading the lifeboats themselves. For the past three years the leadership at RIM, who markets the Blackberry, has been missing in action (sinking) as the iPhone and Android phones emerged with easy to use touchscreens and lots of apps that turn the smartphone into a powerful personal information center. The good news is that before the company actually sunk, the RIM board finally recognized the problem and recently inserted a new CEO. At all times, good leaders make sure the troops know the game plan and stand on the front line to make sure that plan is implemented. Yes, even when the ship is sinking.

Accepting No Responsibility for the Welfare of the Folks Who He or She is Supposed to Lead: The captain simply sailed off in a life raft and left the ship and passengers. From 1975 up until its recent bankruptcy, General Motors saw its U.S. market share go from 50% to 18%. Throughout this period, the leaders of GM demonstrated very little sense of responsibility to the shareholders. They did virtually nothing as the business press constantly pointed out the manufacturing cost disadvantage versus Japanese competition, the boring and look-alike styling of GM models, and the weak marketing. They now seem to be bouncing back, but could their financial fiasco have been avoided with better leadership? Strong leaders thrive on challenges, responsibility and getting things accomplished. They also realize that as the person at the top, they have a responsibility for those whose livelihoods depend on their insight, judgement, know-how and sticktoitiveness.

In looking at these example, we do find a common thread. Like the cruise ship captain, these corporate leaders each lacked gutsy, courageous leadership. At its core, gutsy leadership is about repeatedly doing the following: facing reality, meticulously assembling the facts, developing a plan and communicating and implementing it, and modifying the plan on the fly as new information is available.

Most importantly, gutsy leadership is about making the people you serve your top priority, even if it means putting your own self and – at times – your well-being in jeopardy.

– Bob Herbold is the former Chief Operating Officer of Microsoft Corporation and the author of the recently released book What’s Holding You Back: 10 Bold Steps that Define Gutsy Leaders. More on the book and Bob’s blog on leadership can be found at www.bobherbold.com.