When companies rise to excellence, they often unwittingly develop arrogance, an offensive display of superiority or self-importance

Arrogance – Pride before the fall | Business Culture

When companies rise to excellence, they often unwittingly develop self-destructive habits that eventually undermine their success. Just as with people, such habits are learned and not innate parts of their business culture. Sometimes they get worse over time, and thus become addictions; however, they can be broken and overcome, and the companies can be returned to the straight and narrow path leading to success. In a nutshell, good companies fail when they are unable or unwilling to change when their external environment changes significantly. Sometimes leadership is directly responsible for the self-destructive habits their companies develop. Whether or not this is the case, one thing is certain: it’s definitely his or her job to break them. Real change is likely to come only from an executive with the power to initiate it.

Arrogance is an offensive display of superiority or self-importance, pride, or disdain that comes about because of an inflated sense of self. The ancient Greeks considered arrogance, or hubris, the “tragic flaw” that lead to the downfall of mighty heroes. It’s much the same with companies.

1The Self-Destructive Habits of Good Companies … And How to Break Them AUTHOR: Jagdish N. Sheth PUBLISHER: Wharton School Publishing 2010

Things that lead to the habit of arrogance:

  • Exceptional achievement in the past that can warp the company’s perception of present reality.
  • David conquers Goliath – the company is a formerly new or disadvantaged company that manages to knock a formerly leading company off its pedestal.
  • The company pioneers a product or service that no one can duplicate.
  • The people behind the company are, plain and simple, smarter than those who work for the company’s competitors.

The warning signs of arrogance:

  • The company stops listening, believing that it’s seen it all before and no longer needs to listen to customers, employees, investors, consumer advocates or the government.
  • The company flaunts it: it becomes extravagantly eager to show off its success.
  • The company browbeats others and begins to act like a bully, both internally and externally.
  • The company becomes high-handed and abuses rules and procedures in the belief that no one can regulate or even question what it does.
  • The company curries approval, favoring those who validate its views and getting rid of those who are critical.

How to break the arrogance habit:

  • Rotate management to new challenges. The company needs to challenge management – but has to allow them to fail; failure is an excellent teacher of modesty.
  • Implement nontraditional succession planning. The company should consider fast-tracking candidates across functions, divisions, and markets.
  • Diversify the talent pool – recruit from a variety of educational institutions, countries and demographics to make management strong.
  • Change the leadership; consider bringing in an outsider.
Posted in Business Transformation, Culture Change, Industrial Manufacturing, Leadership, Lean Six Sigma, Learning and Training, Manufacturing, Organizational Change Management, Organizational Design, People.