(MoneyWatch) COMMENTARY Executives and business leaders don't just peak and lose their potency over time, like wine. They change. Oftentimes, success is the culprit. Success affects everyone differently and not necessarily in a good way.
I've seen it happen to loads of successful CEOs, entrepreneurs and business owners I've worked with over the years. It's not a result of the Peter Principle, since their responsibilities didn't change. It's not necessarily a question of the business outgrowing their capabilities, either.
And they don't just "lose it." Rather, they change. Success changes them.
If you know a little about human psychology, that shouldn't surprise you. You've got to really know yourself, possess unusual self-confidence, and be pretty well grounded in reality to withstand the ego-inflating onslaught of winning big in business.
Since we're all human, we're all susceptible to the unusual pressures and pitfalls that come from achieving what we've always dreamed of. In my experience, these are the ten most common traps successful leaders fall into.
Becoming the status quo. Startups often break into the market by challenging the status quo. The problem is when success makes them the status quo, yet they don't realize it. That was evident whenwith the iPhone and Android platform. It's ironic that RIM's co-founders forgot that they were once the challengers. Their failure to be proactive or even to react in time was RIM's downfall.
Tunnel vision. They lose perspective and become rigid, sticking to their myopic vision like glue. Since competitors are unpredictable and markets are always evolving, it can be deadly to a business. If their vision fails to gain traction, they often double down and become even more grandiose. We saw that with formerconcept of product synergy. The only problem is it didn't exist.
Losing their fear. Fear is a key emotion that warns you when to be alert and when you need to act. When you start to think that success is inevitable and believe you can't fail, you act irrationally, become reckless and take risks you shouldn't or without due consideration. Reminds me of lots of megamergers and LBOs, that's for sure.
Fear of losing. The opposite of becoming fearless to the extreme is becoming too risk averse because you're afraid of losing what you've won. Unfortunately, that simply doesn't work in an ever-changing business world. Once that fear of taking chances sets in, you're business is doomed.
All knowing. They stop asking questions and don't really listen when key stakeholders -- customers, executives, directors, investors -- tell them something they need to hear. They think they have all the answers, that they're the smartest guys in the room. They miss critical warning signs.
Isolated. I've seen far too many successful people develop an elitist or ivory tower mentality. They become insular in their thinking and cut themselves off from others with layers of bureaucracy and hierarchy. There are also usually physical manifestations like executive offices, suites, buildings, and assistants to keep the masses out.
Controlling. In the name of maintaining a culture of entrepreneurship, they become obsessed with keeping things the way they are. That often translates to micromanaging and controlling every little thing. They fail to let go by adding processes and infrastructure that growing businesses need to effectively scale. I see this over and over, especially in the high-tech industry.
Surrounded by yes-men. There will always be weak-minded lackeys that tell leaders what they want to hear and sugarcoat negative news to gain favor. But their power only comes from weak leaders with low self-esteem that need their egos to be constantly pumped up.
Lost the magic. Business success is nearly always the result of a number of factors. Sure, there's a product or service that customers are excited about, but there's also pricing, timing, partners, even luck. Whatever the combination, it's tempting for successful entrepreneurs to think it's all about them, not the "magic formula" that got them there.
If I build it, they will come. Entrepreneurship works in America because anyone with an idea can get funding and, if the stars are aligned, develop a hit product or service. To get out of the "one hit wonder" phase and develop a second and third successful product, however, requires a willingness to embrace marketing, sales, operations, customer service and other business functions.
Photo courtesy Flickr user Alex E. Proimos