If You’re Confident About Competence, Admit Your Flaws; IBM’s Lou Gerstner’s, “I don’t know IT but I know management” was pure genius. Here’s why

If You’re Confident About Competence, Admit Your Flaws

by Steven Berglas  |  11:00 AM April 10, 2013

Within moments of seeing white smoke billow from the Sistine Chapel, media outlets were inundated with a slew of reports about the former Cardinal Bergoglio. The Vatican PR machine noted that Pope Francis was an incredibly humble Cardinal who, as was befitting a Jesuit, had an abiding concern for the poor, rode the subway, and cooked his own meals. Oh… and that he was missing most of one lung.

This certainly runs contrary to conventional wisdom about how best to conduct impression management; i.e. “Put your best foot forward.” With Catholics already anxious about the new Bishop of Rome’s wellbeing, doesn’t pointing-out a condition that begs the question, “Was it cancer?” constitute impression mismanagement?

Actually, I think it’s something leaders should do more of. Let’s take an example from history to see why: Back in 1999, Louis V. Gerstner “let out” word that he had a deficiency immediately prior to taking the helm at IBM. Big Blue had been among the nation’s foremost enterprises, but when Gerstner was picked for the top spot it was bleeding red ink. Conventional wisdom would say that to redress the blue mood IBMers were suffering, Gerstner should have greeted them with bravado to boost morale. Instead, Gerstner exposed his soft underbelly by stating, “I don’t completely understand the technology [of IBM’s product line]. I’ll need to learn it, but don’t expect me to master it… unit leaders must translate it into business terms for me.”

Gerstner’s, “I don’t know IT but I know management” was pure genius. Here’s why:Presenting his IT deficiency made it impossible for anyone to challenge him as being an industry-outsider — he pre-emptively admitted he was and declared that others needed to oversee IT issues.

  • What Gerstner also did was frame the discussion of what was best for IBM around his strengths. His greeting proclaimed that IT advances wouldn’t fix what ails IBM. They’d turn the company around by reducing costs and increasing profits.
  • Finally, by admitting a flaw, Gerstner created what psychologists call an augmentation effect: “His managerial strengths must be super-strong,” people were forced to conclude, “Since he was hired despite being ‘short’ on IT competence.”

The notion that admitting flaws enhances impression management efficacy is not mere conjecture. Psychological research on ingratiation conducted by Edward E. Jones (and colleagues) at Duke University proved that self-presentations referencing negative attributes, shortcomings, or flaws, was far more effective at creating favorable first impressions than those that were limited to listing personal strengths and achievements.

This is not to say that a favorable impression is born of admitting every misstep you’ve ever made. As social media aficionados would say, that sort of disclosure is TMI. But when interviewing for a promotion (or taking a new job), meeting potential investors, addressing boards of directors, and the like, volunteering that you have a chink in your armor that intense vetting would ultimately reveal, accrues to your benefit.

Why is this so? As noted, it both takes the wind out of (potential) critics’ sails and helps define the parameters of what is discussed about you. In addition, there are three more seemingly counterintuitive (but actually rational) reasons why divulging a flaw helps you score points when getting to know someone:

  • When you voluntarily disclose a flaw -as though it is no big deal — you “force” others to think just that. Within a day of learning about Pope Francis’ lacking a lung, news outlets were teeming with articles quoting pulmonologists who said it was of no concern.
  • Not disclosing personal flaws that are ultimately discovered makes it appear that (a) you hid them, and, (b) they are more damaging than is actually the case. Had Lou Gerstner not allowed, “I’m no IT wizard but I know business inside and out,” some wag could have accused him of assuming the top spot at IBM under false pretenses. That claim, true or not, could have undermined his turnaround efforts: Given the bloodletting he initiated there were countless times that Gerstner’s foes out-numbered his followers.
  • Acknowledging flaws, irrelevant though they may be to leadership potential, conveys strength of character that a sanitized (positive) self-presentation cannot. Most people over-estimate how damaging their flaws appear, feel that they, alone, suffer them, and are loath to admit them. The sole exception to this rule occurs when someone strives to achieve what shrinks call “secondary gain” — using personal problems to accrue attention, control others, or an appearance on Dr. Phil.

Yes, over-disclosing your dents & dings is a huge error. Most of what we keep private about ourselves is irrelevant to our professional comportment and, as such, of concern to no one. Moreover, to metaphorically strip yourself naked in front of business associates is akin to touting the purity of the meats used in your sausages by providing tours of your processing plant. A simple, “No fillers or additives used” will suffice; specific details of how hogs become your hot dogs are, once again, TMI.

Think of it this way: When fighting your way to the top you never stick your chin out unprotected, allowing it to get hit. But you also can’t keep your gloves up all the time, or you’ll never be able to throw a punch. Instead, you strive, as best you can, to box like Muhammad Ali: Dropping your guard, strategically, to keep your power punch at the ready when it’s time to hit ’em with your best shot.

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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