When we read the books and listen to the speeches of powerful executives, it’s easy to assume they have it all figured out.
In fact, it’s a good sign they have convinced themselves that, too, says Zac Bissonnette, author of the new book “Good Advice from Bad People.”
He believes shareholders should start getting nervous when an executive writes a self-help book or goes on a speaking circuit.
“It suggests that executives are getting complacent,” Bissonnette told Business Insider. “It’s as if they’re saying: ‘I got this. I really have tremendous insight. I really have a strategy.'”
And, as he shows in his book, success can easily lead to hubris.
In 1999, for example, Dell founder and CEO Michael Dell wrote “Direct from Dell: Strategies That Revolutionised an Industry.” Yet, as the industry further evolved over the next 15 years, Dell failed to keep up.
In 2010, Harvard Business School’s Prof. Peter Cohan said that he would no longer teach about Dell’s glory days because in the span of a decade the company lost $US68 billion for shareholders.
Similarly, former Apple CEO John Sculley, infamous for forcing Steve Jobs out of Apple in 1985, wrote the 1987 memoir “Odyssey: Pepsi to Apple… A Journey of Adventure, Ideas and the Future.” In it, he referred to himself as an impresario who encourages opposition to spur innovation.
In reality, he didn’t like direct challenges to his power and stripped Jobs of his managerial powers. The board eventually fired Sculley in 1993.
One of Bissonnette’s favourite examples is when Donald Trump wrote “Trump: Surviving at the Top,” in 1990. In it, Trump counseled: “You have to be confident as you face the world each day, but you can’t be too cocky. Anyone who thinks he’s going to win them all is going to wind up a huge loser.”
The economy had taken a turn for the worse when the book hit the shelves, and Trump’s net worth was tanking as he fought bankruptcy for his overleveraged real estate empire, which Bissonnette asserts “was, of course, a product of his excessive cockiness.”
Publishing a self-help book is just one sign of dangerous pride, Bissonnette says in a recent USA Today op-ed. He points to a 2007 NYU study that found stock market returns fall when a company’s CEO builds his trophy home, and a German academic study that found the same thing happens when a company builds lavish headquarters.
While Bissonnette readily admits that all of the examples in his own book are merely anecdotes, he says executives may be better off avoiding the soap box and focusing instead on their companies and keeping them competitive.
They don’t need to hide in the shadows, ignoring every chance for a speech or editorial, he says, but they shouldn’t get ahead of themselves either.
They will have plenty of time to share their wisdom and go on book tours when they retire, Bissonnette says.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.