Know When to Resign

You've got to wonder how Egyptian President Hosni Mubarak is handling having millions of people wanting him to step down. Must be pretty demoralizing. I've been fired once or twice, and you know, I didn't very much like having one person wanting me gone, let alone half of Egypt.

Come to think of it, I've known dozens of CEOs who must have known they weren't cutting it. I mean, it's sort of hard to miss the signs of a company that's consistently under-performing. And yet, the vast majority just stayed the course. That brings to mind a number of interesting questions:

• Why do leaders do that: refuse to step down, even when confronted with undeniable evidence of their ineffectiveness or incompetence?
• Can they change, put out a new version, like Mubarak 2.0? And what does it take for that to happen?
• What makes some leaders capable of changing while others would just as soon pass a kidney stone?

Mubarak's predecessor, Anwar Sadat, was one of the few who did. He was a key member of Nasser's administration during the Six-Day War with Israel and, after assuming power, he waged the surprise Ramadan or Yom Kippur War. But, after a change of heart, he was actually instrumental in achieving lasting peace with Israel.

In the corporate world, management consultants and academics are constantly looking for esoteric reasons why companies fail while completely missing the obvious. Most companies fail because their CEOs are no longer effective and fail to adapt to changing market conditions.

Even when their business is in the tank and the troops are rebelling, they either won't or can't change. And, all too often, the board of directors has its collective head too far up its CEO's you-know-what to do its job and fire the guy. The corporate graveyards are filled with once-great companies that bit the dust as a result. Nortel, Digital Equipment, Silicon Graphics, and Lehman come to mind. We may even be witnessing a few in progress, as we speak. Think Sony CEO Howard Stringer, for example. Other companies narrowly escaped disaster when their boards finally took action, e.g. IBM, Apple, and Starbucks.

As you can see, this is a pretty big issue. So, back to the original question, Can leaders change their spots? In my experience, it really comes down to this. One of the key, identifiable aspects of a leader is his vision. That's what drives him and it's also what he uses to drive others. Unfortunately, too many leaders get their egos all wrapped up in that vision. It defines them, instead of the other way around. And that renders them a slave to their vision.

The only thing that can break that dysfunctional relationship is a crisis of sorts, one that threatens their ego. When their unflappable self-confidence comes into conflict with evidence of massive failure, leaders react one of two ways:

1. They behave as if they're under siege. Denial is a powerful force and power is like a drug addiction. All too often, leaders defined by their vision see evidence of failure as an attack on their ego, their power, so they hunker down and become unreasonably stubborn, like a scared child.
2. They wake up and face reality. They open their eyes wide, look in the mirror, and say, what the hell have I done? That's usually the first step on the road to change. But, just as with drug addiction, power addicted leaders won't change until they've really bottomed out, until reality hits them right between the eyes.

So, bottom line, it really comes down to these five factors that define leaders who are capable of change:

• They define their vision; they're not defined by it.
• They have self-confidence, not an overblown ego.
• They're self image is consistent with reality.
• They're focused and driven, but also adaptable and flexible.
• They still have skin in the game, a passion that drives them to succeed.

1. Street Smart Leadership: 5 Lessons From Growing Up in New York
2. 10 Management Rules of Engagement
3. Founders Do Make Good CEOs ... When They Grow Up