Rooting Out Hubris, Before a Fall

Rooting Out Hubris, Before a Fall

by Steven Berglas  |   10:00 AM April 14, 2014

Hubris, the sin of overweening pride or arrogance, may be the most misunderstood disorder an executive will ever be confronted with. It’s not just narcissism; it’s much more dangerous than that.

Actually, no one nailed the nature and dynamics of this problem better than Aesop did: The Hare, in a circumstance where he should prevail (racing the tortoise), snatches defeat from the jaws of victory, after making a jackass of himself with his pre-race prattle. Had the Hare avoided hubris (and his famous nap), he would have handily trounced the tortoise, and moved on to signing autographs and giving press interviews. Pride did not just goeth before the fall; it actually caused the fall.

I’m reminded of how intrigued – and ignorant — most people are about hubris every March when the NCAA basketball tournament begins. Invariably, one or more top-seeded teams are toppled by an underdog, prompting some wag to proclaim the loser a victim of hubris. While hubris can infect entire organizations, hubris is usually an isolative disease, because at its core it’s about defiance.

The Hare’s public prodromal – in advance of their self-destruction, hubris suffers show the world what’s wrong with them — is a key feature of the disorder. Hubristic individuals have a tendency to evince features of an “oppositional defiant disorder” when imploding. College basketball teams, in contrast to what some March Madness commentators contend, don’t do this. Some highly ranked teams may choke on the pressure of being expected to excel, and some may not take all competitors as seriously as they should. But to understand hubris you need to recognize that it is first an act of defiance, and only after others have been completely offended do those suffering hubris take actions that ensure they will not achieve the successes they guaranteed they would.

By contrast, narcissism is a character disorder, which means it starts in the teenage years and defines a person’s entire modus operandi.  If, owing to a childhood that left you bereft of good feelings about yourself, you feel a need to preen and self-promote to merely stay afloat psychologically, that problem sticks with you forever. Psychotherapy can dampen a narcissist’s tendency to self-aggrandize, but under duress he’ll regress and become insufferably self-centered. A narcissist is pretty much a narcissist all the time.

Hubris, on the other hand, is a reactive disorder: Either the unfortunate consequence of endless laudatory press clippings leading to supreme over-confidence, or the culmination of a winning streak that causes a person to suffer the transient delusion that he is bullet-proof. Many good people will, under bad circumstances, suffer from hubris— but they tend to recover after toppling from their pedestals shrinks their egos back down to size.

Kenneth Lay, the former CEO of Enron, is a good example of executive hubris. Long before the company imploded, Lay lauded his company for being a “new economy” corporation “before it became cool to be one.” In an email sent to employees and the public only weeks before Enron’s coffers ran dry, Lay boasted, “Our performance has never been stronger, our business model has never been more robust. We have the finest organization in American business today.”

What is tragic about Lay’s self-destruction and the Enron collapse — apart from the number of lives ruined by it — is that Lay built the business, retired, and returned in a effort to save it, not to feather his own nest. Yet ultimately Lay could not throw himself on his shield and admit defeat, so he let his pride get in the way of reason, causing devastation as a result. Unable to watch his pride and joy fail, and unwilling to make the hard decisions that might have saved a diminished version of it, he decided to cook the books – and in so doing, his business’s goose.

Is there ever a way to deflate hubris while it’s still inflating, before the bubble disastrously bursts?  A few structural modifications of your corporate zeitgeist – or clarifications of principles you assumed were clear and accepted — along with some well-placed and properly-timed shots of tough love should do the trick.

Chief among the aspects of your corporate culture that you must imbue in all employees –but particularly the stars who are most vulnerable to hubris— is the virtue of humility. In Shakespeare’sKing Lear, the Fool warns the ill-fated monarch, “Have more than thou showest; speak less than thou knowest.” This is hard to do today, in our society, when every putz at an athletic event waves a foam #1 Finger and you rarely see a major league baseball player get a hit and not gesticulate in a manner that suggests he is using LSD. You cannot change society, but you can make this sort of grandstanding verboten in your business.

Even if you do so, however, you cannot ensure that one of your “big hitters” won’t make a public display of himself following a major success. This is the time for tough love: Let him know in stern terms that his celebratory antics are not becoming. Remind him that most people enjoy rooting for underdogs, dark horses, and long shots – especially when they’re competing against top dogs. (Avis Corporation’s “We’re #2!” ad campaign capitalized on just this feeling.) It’s human nature to enjoy the sight of an idol falling off a pedestal.

This is why humble pie should be the only desert served in the corporate cafeteria: If an employee earns a reputation for being arrogant (exhibiting hubris), everyone, even colleagues, will want to see him fail. Since it is well known that “Heavy rests the head that wears the crown,” never hold coronation ceremonies at your business, and if a star insists on self-anointment, let him know that he is not engendering admiration in others but, rather, making himself a target.

Keep in mind the formula that psychologist and philosopher William James developed for enhancing self-esteem: Self-esteem is derived from the ratio of your successes to your pretensions (or, as we would say today, your “performance expectations”). If your employees buy this model, they will naturally see the advantages inherent in promising low and striving to deliver high— a natural method for preventing hubris.

As psychoanalyst Carl Jung observed, “Through pride we are ever deceiving ourselves. But deep down below the surface … a still, small voice says to us, something is out of tune.” To save a hubristic person from himself, discover what his “small voice” is saying to him and nudge him off his high horse.

But remember that you – like all of us — are naturally repulsed when super-talented people swagger, regardless of how well they perform for you. Thus, when delivering “tough love,” be sure to over-emphasize the love — the “tough” will take care of itself.

 

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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