Wounded Leaders: How Their Damaged Past Affects Your Future. Allan Bonner
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on the cost of depression from articles that reference this topic in their titles. Terrance Real deserved an in-text reference because of his “wounded child” concept. The crisis literature is there because it’s in crisis that I often coach leaders and it’s in a crisis when leadership traits are writ large.
The Eastern and Martial literature has obviously informed my personal experience in a Karate Dojo. This is also the case with the general business literature on decision making and organizational matters. It should be obvious that I’m grateful for my time studying leadership at Harvard and to the Harvard Business Review for easy to access compilations on topic of importance to my work and that’s why the HBR appears so often.
I hope that’s credit where it’s due. Errors and omissions are mine.
INTRODUCTION
The western world is in danger of being failed by its corporate leaders. That’s a sweeping statement to make, but the evidence is piling up. In fact, it was distressingly apparent even before the body blows that rocked the world economy beginning in 2007-8. Leadership failures had already been a hot topic in academic literature and the business media for a decade. For decades before that researchers studied the waste and financial failure of mergers and acquisitions. Unfortunately nobody seems to be listening. There’s very little sign of change in the mindset and approach of those who lead the corporate world.
I studied the strengths, weaknesses and foibles of the corporate world for my doctoral thesis in 2005. What I found becomes more relevant with each failure and headline. The economic meltdown sparked by the sub-prime mortgage debacle in the US changed lives around the world but it has not prevented corporate leaders from continuing to endanger their business organizations by failing to learn from the past.
Why? Why do so many business leaders fail to recognize the danger signs that prevent them from reaching their full personal and corporate potential?
There are a number of possible explanations. One is the complexity of modern business organizations. Leaders must operate within a labyrinth of trade pacts, labour agreements, jurisdictional and financial regulations as well as the ups and downs of the business cycle. All this may well result in modern leaders having less influence on their business organizations than their predecessors enjoyed. Business life was simpler for the men (they were mostly men) who laid the foundations of the modern industrial state during the late 19th and early part of the 20th centuries.
Ours is a very different world. Just think of air travel, e-commerce and instant communication. And there were more developments, twists and turns during the more than three years I spent researching this book. In the wake of the sub-prime and other financial scandals, we’ve seen a sharp rise in criticism of Big Business and Big Banks and the way they use trade and tax rules to maximize profits and minimize taxes. The Occupy Movement was one of the most obvious-and least focused-manifestations of this anti-business backlash. But there’s also been a much more focused response.
In 2013, governments of the world’s 20 largest economies (the G20) and countries of the Organisation for Economic and Co-operation Development (OECD) began looking at what was termed the “Base-Erosion and Profit-Sharing” (BEPS) issue.
This project took me to Washington to see first-hand how the world was going to deal with funding the 40% of the OECD economies that are public sector, while their tax bases are being eroded because Big Business is contributing less and less to tax coffers. My clients wanted to make their case to the OECD and G20.
At about the same time, The Public Accounts Committee of the British House of Commons held public hearings in which the politicians castigated Google, Starbucks, Amazon as well as their own government’s tax collectors. They also grilled the “Big Four” accounting firms-PwC, KPMG, Deloitte, and, Ernst & Young. At issue is whether these international corporations were paying their “fair share” of taxes. They are operating in countries with bilateral and multilateral trade agreements, as well as within large trading blocks with additional rules. The system set out in 1927 by the long-defunct League of Nations is just not up to dealing with modern commerce.
When average people hear that Starbucks paid little or no tax in England for many years, they naturally wonder. But in our modern, highly-mobile world, assessing taxes due is complex. How much credit do the people who started the company in Seattle get? How much does the grower, the buyer, grinder and shipper get? What about the person who devises the logo, designs the stores and the inventor of the machinery that makes the coffee and keeps it hot? Have all these people made their contribution or is it just the server behind the counter in London or Manchester who pours hot water over the ground beans?
The lesson for leaders was stark during these times. I watched with some horror at the poor performance of every senior spokesperson who appeared before the Public Accounts Committee in London. Each struggled to explain the difference between tax evasion and tax avoidance. Each struggled to defend the practice of “transfer pricing” the accounting method used by many multinationals to apportion taxable values. They were accused of unethical behaviour and didn’t seem able to defend themselves.
Testimony went better for Apple in Washington, but the message was clear. Business leaders are not dictators. They need “permission to do business” from regulators, legislators and the public. In the changed business climate since 2007, they are not given the benefit of the doubt or the “elbow room” they need to lead. Why? What is wrong with the reputation of our leaders and why are they under such suspicion?
Another failure is the widespread reliance on military-style jargon, bullet point presentations, hollow headlines and slogans to convey information to colleagues and employees instead of clear, unambiguous language. Too many leaders are under the impression they need to use important-sounding language to convey authority. They’re wrong. It may work in the boardroom with subordinates nodding “yes”, but it doesn’t work in the rough and tumble of a legislative committee or in the media.
A third involves a personality disorder, which I call the wounded leader. It describes a swashbuckling, hard-driving male executive who often harms himself, his colleagues and even his organization in his zeal to prove his qualifications to lead. One of the easiest ways to harm a corporate entity or organization is for its leader to assume the authority he exercises in his business life also extends to public officials and those affected by his organization’s activities.
Three highly publicized oil spills in North America are linked not just by the damage they did, but by the inept behaviour and comments of the top dogs of the companies responsible. These are: the oil spills from the grounded super tanker Exxon Valdez off Alaska in 1989, the 2010 explosion at BP’s Deepwater Horizon oil rig in the Gulf of Mexico in 2010 and the derailment and explosion of oil tanker cars in Lac-Megantic, Quebec in 2013. The names of Lawrence Rawl, CEO of Exxon; Tony Hayward, CEO of BP; and Ed Burkhardt, Chairman of Montreal, Maine and Atlantic Railway will forever be linked to these disasters because of their ill-considered comments and combative attitudes.
In my years as a journalist, I was struck by just how few senior people, in either the private or public sector, had a clear message or command of relevant issues and facts pertaining to their own organizations. Later, as a coach and trainer of politicians and corporate leaders, I watched senior spokespeople under real-time pressure struggling to decide, motivate and communicate. Many arrived for training sessions in crisis management and communications unprepared and unwilling to learn.
The world, social behaviour, methods of communication and the entire financial climate have changed over the last 30 years. Top business leaders talk about change all the time but seem unable or unwilling to change the way they lead.
I’m convinced this situation is a crisis in management and leadership, robbing the economy of much needed wealth and productivity.
In spite of ample evidence that three-quarters of all mergers and acquisitions are failures, CEOs and their boards of directors persist in chasing this discredited dream. And this is only one symptom of the crisis in our corporate leadership. For years the business and other media (and even Hollywood!) have drawn attention to questionable ethical and moral behaviour of corporate leaders, especially when their organizations