Why Leaders Lose Their Way
n recent months several high-level leaders have mysteriously lost their way. Dominique Strauss-Kahn, former head of the International Monetary Fund and a leading French politician, was arraigned on charges of sexual assault. Before that David Sokol, rumored to be Warren Buffett's successor, was forced to resign for trading in Lubrizol stock prior to recommending that Berkshire Hathaway purchase the company. Examples abound of other recent failures:
- Hewlett-Packard CEO Mark Hurd resigned for submitting false expense reports concerning his relationship with a contractor.
- US Senator John Ensign (R-NV) resigned after covering up an extramarital affair with monetary payoffs.
- Lee B. Farkas, former chairman of giant mortgage lender Taylor, Bean & Whitaker, in April was found guilty for his role in one of the largest bank fraud schemes in American history.
These talented leaders were highly successful in their respective fields and at the peak of their careers. This makes their behavior especially perplexing, raising questions about what caused them to lose their way:
- Why do leaders known for integrity and leadership engage in unethical activities?
- Why do they risk great careers and unblemished reputations for such ephemeral gains?
- Do they think they won't get caught or believe their elevated status puts them above the law?
- Was this the first time they did something inappropriate, or have they been on the slippery slope for years?
Leaders who lose their way are not necessarily bad people; rather, they lose their moral bearings, often yielding to seductions in their paths. Very few people go into leadership roles to cheat or do evil, yet we all have the capacity for actions we deeply regret unless we stay grounded.
Self-reflection: a path to leadership development
Before anyone takes on a leadership role, they should ask themselves, "Why do I want to lead?" and "What's the purpose of my leadership?" These questions are simple to ask, but finding the real answers may take decades. If the honest answers are power, prestige, and money, leaders are at risk of relying on external gratification for fulfillment. There is nothing wrong with desiring these outward symbols as long as they are combined with a deeper desire to serve something greater than oneself.
Leaders whose goal is the quest for power over others, unlimited wealth, or the fame that comes with success tend to look to others to gain satisfaction, and often appear self-centered and egotistical. They start to believe their own press. As leaders of institutions, they eventually believe the institution cannot succeed without them.
The leadership trap
While most people value fair compensation for their accomplishments, few leaders start out seeking only money, power, and prestige. Along the way, the rewards—bonus checks, newspaper articles, perks, and stock appreciation—fuel increasing desires for more.
This creates a deep desire to keep it going, often driven by desires to overcome narcissistic wounds from childhood. Many times, this desire is so strong that leaders breach the ethical standards that previously governed their conduct, which can be bizarre and even illegal.
As Novartis chairman Daniel Vasella (HBS PMD 57) told Fortune magazine, "for many of us the idea of being a successful manager—leading the company from peak to peak, delivering the goods quarter by quarter—is an intoxicating one. It is a pattern of celebration leading to belief, leading to distortion. When you achieve good results… you are typically celebrated, and you begin to believe that the figure at the center of all that champagne-toasting is yourself."
When leaders focus on external gratification instead of inner satisfaction, they lose their grounding. Often they reject the honest critic who speaks truth to power. Instead, they surround themselves with sycophants who tell them what they want to hear. Over time, they are unable to engage in honest dialogue; others learn not to confront them with reality.
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