The Incompetent CEO

Abstract

People become CEOs through a variety of reasons; many of which have little to do with competence in achieving organizational goals. Most CEOs are above average in intelligence, and conscientious in trying to do a good job. Yet, many could be stronger in the areas of governance, analytical skills, and ability to predict impending changes. Some come to the CEO job with psychological flaws or character weaknesses which can undermine their competence. One CEO's honesty may be subject to compromise, while another may focus on personal success to the detriment of organizational goals. All of these components of CEO character and competence are tested by the ego-stroking which a chief executive can expect to receive from subordinates, from associates, from the media, and even the general public. White most CEOs can put obvious flattery in perspective, it is difficult not to fall into the ego trap. Feedback tends to be positive in nature, supportive of the CEO's signaled preconceptions, and addictively complimentary. Personality and character flaws are accepted, reinforced, and copied. Some CEOs begin believing that they are the major force driving the company's success and become susceptible to making bad decisions. They may become personally committed to losing ventures, take on high-risk projects or endeavors that are too large for the organization, and use excessive leverage. The end result of their flawed judgment can range from depressed earnings to the collapse of the company.