While it takes a certain type of individual to face the daily challenges of being an entrepreneur, intelligent leaders can sabotage themselves and their company because of personal hubris, according to Forbes.
Sydney Finkelstein, a professor at Hanover, N.H.-based Dartmouth's Tuck School of Business, and his colleagues spent six years trying to understand how and why some intelligent leaders may ruin companies. After studying 51 of the biggest business blunders, their research showed that the poor decisions smart leaders made, intentional or not, typically exhibited a pattern of hubris that could run even the most successful enterprise into the ground.
Here are five ways smart leaders can potentially ruin companies.
1. Business leaders thought they were the smartest person in the room. According to Mr. Finkelstein, many leaders' identities become so wrapped up in their intelligence that they believed input from others was unnecessary. Although that may fit the colloquial television image of a strong leader, making impatient, split-second decisions often led to major mistakes.
2. They surround themselves with yes-men and women. The research suggested that expecting support for every decision alienates valuable employees and silences voices that could otherwise help the company succeed, according to the article.
3. They viewed themselves, and their companies, as untouchable. While it's healthy to maintain a sense of pride about one's work or accomplishments, believing that competitors would never catch up or that a leader's own circumstances may never change made failure inevitable, according to Mr. Finkelstein. Leaders must continually question their position to expand not only the company's growth, but individual growth as well.
4. They couldn't tell where they stopped and the company began. Mr. Finkelstein and his colleagues discovered that leaders who tended to equate themselves with the company were more likely to engage in dishonest business practices or more likely to hide things that may tarnish the company's, or their own, image.
5. They ignored red flags and warning signs. Some leaders in the study followed their own vision or image so acutely they ignored facts and others' opinions that said otherwise. While persistence is a great quality in a leader, it doesn't mean they should ignore the facts, according to Mr. Finkelstein.