Executives, Patraeus their halos and indiscretion

“Who the fuck does Cox think he is? I never made a dime from public office! I’m honest.”

“They can’t impeach me for bombing Cambodia. The president can bomb anybody he wants.”

These are obviously the words of a leader concerned that his reputation should not be impugned. You will have guessed that the President concerned is Richard Nixon. These phrases though are taken from the Oliver Stone movie about the former president starring Anthony Hopkins in the title role. Though the film was extensively researched for reasons of legality and authenticity, I can’t tell you that they are actually Nixon’s words. But I think Stone was trying to capture something of the man.
The lines in the film come long after the Watergate scandal had broken and Nixon had devoted considerable effort to covering up. What do we understand from these quotes?
The first tells us that despite everything that went into the most notorious burglary of US political history, Nixon still saw himself as essentially an upright man doing right and serving the interests of the state. His exhortation that he was "honest" comes as something of a shock. The second gives us an idea of his warped sense of what the presidency and its powers meant - the president can literally do anything he wishes. Power is unlimited.

This week astonishing events saw General David Patraeus (pictured) resign his position as head of the Central Intelligence Agency following revelations of his affair with his official biographer Paula Broadwell. The affair has also raised questions of whether she had inappropriate access to state intelligence.
Coverage of whether he did or did not share sensitive information with Broadwell will rumble on for some time. But one of the first questions tackled by press, public, former soldiers and politicians alike is why a man vaunted for what are clearly considerable skills and intelligence should risk it all on an act of adultery.
Put aside the question whether he should have resigned. Patraeus obviously thought it was a resigning matter. The issue is why take the risk of embarking on what has turned out to be a catastrophic piece of behaviour? After all, this is a highly talented man who had achieved great success who potentially saw even more success out there in the future.

Yesterday Financial Times columnist John Gapper drew a parallel between Patraeus and a recent crop of high flying company executives forced to resign over indiscretions. Gapper asks, why should they have to go? Their personal lives do not affect their ability to work and run their companies. Why sling them out?
This is an engrossing question. Great men achieve great things then take great, apparently irrational, risks. In this sense it seems powerful executives shoot from hip in the same way as heroic generals.
Some light is thrown on this by a 1993 paper, cited by Gapper, in the Journal of Business Ethics written by  academics Dean Ludwig and Clinton Longenecker. Called the Bathsheba Syndrome the paper is reportedly on the reading list for high flying US soldiers. It asks why do successful businessmen depart from the path of righteousness to do bad? The title refers to the famous temptation of King David (oh, the irony) and Ludwig and Longenecker propose that executives go wrong, not because of pressure from competitors or from a lack of “operational principles”, but because they were unprepared for their careers going large. They say it is a “lack of preparedness in dealing with personal and organisational success.” They add: “While our society places a high priority on being successful, some strongly suggest that little if any attention is placed on preparing people to deal with the trials and dilemmas associated with success.”
That’s not all. The profs says leaders abandon their principles because they lack fortitude and courage. There are four “by-products” of success which may “cause leaders to fall into ethical violation”. They are complacency causing a lack of focus; a privileged access to information and people; unrestrained control of an organisation’s resources; and success “inflates” a leader’s sense of their own ability. It looks like it was written for Nixon. Stone’s hypothesis seems to be that here is a man who, once highly successful, comes to believe he can do anything.
Patraeus as the head of the CIA would have had all of these factors in spades too. And they read like a pretty lethal set of ingredients. In fact when you put it like that, it’s a wonder that any business leader resists the temptation of doing dodgy deeds. Which is a conclusion that I think should put us on guard. For two reasons.
On the one hand I think it means that leaders who err in their personal lives are not so easily excused. If they are willing to give in on one front whose to say they would not give in on another - misusing resources, information or staff. Ludwig and Longenecker might make the point that to err personally (adultery) already indicates that attention has started to wonder - the leader is simply not on the job and otherwise filling time with inappropriate risk taking.
On the other hand when we appoint leaders we are deluding ourselves if we are not taking into account this “leadership risk”. And this is important for a further reason. There is, I think, a fifth element to add to the four by-products above.

Like thousands of people I recently read Daniel Kahneman’s Thinking Fast and Slow, a veritable tour through psychological phenomena. What particularly caught my attention, to the point where I had to stop and reread the passages over and over again, was his section on “exaggerated emotional coherence.” Or, as it’s known among psychologists - the “halo effect”.
Kahneman’s discussion of the halo effect is just one part of a larger analysis of how we use fast (system 1) and slow (system 2) thinking. System 1 thinking is speedy, automatic and takes little or no effort, and without having to be consciously engaged. System 2 takes a bit of sweat to get under way and is “usually associated with the subjective experience of agency, choice and concentration”. However, Kahneman’s book describes how heavily we rely on system 1 and how system 2 is fundamentally lazy. It takes an effort of will to engage and sustain our critical thought processes. If we don’t well, System 1 steps in to fill the void.
The halo effect is a reflection of System 1 thinking. In essence it says that if our initial impression or information about something or someone is good, we are more likely to consider everything about them as good.
“The term has been in use in psychology for a century but it has not come into wide use in everyday language,” writes Kahneman. “This is a pity, because the halo effect is a good name for a common bias that plays a large role in shaping our view of people and situations. It is one of the ways the representation of the world that System 1 generates is simpler and more coherent than the real thing.”
In short the halo effect helps us jump to conclusions about attributes in people for which there is no evidence. Even if evidence comes along, Kahneman points out, an emotional attachment to the original view will shape future opinion.
Now here’s where I want to stretch things (these are my thoughts not Kahneman’s, I hope he would forgive me). The halo effect describes how people who possess good reputations might continue to have good reputations. But it comes from observers. For example, in Patraeus’ case it is the public, politicians, fellow soldiers, journalists and biographers who give the man his halo. Likewise, it is awed fellow executives, aids, employees, business professors, journalists, analysts and investors who give top chief executives their halo. They, we, participate in the construction of a reputation. It is we who put them on the pedestal. Leaders may want to be there, but we give them the bunk-up.
What does all this mean for Patraeus and disgraced business leaders? In part the drama of a fall from grace is a function of the way we hoist a halo above a leader’s head. We like to create heroes (and by heroes I’m using the term to mean anyone to whom we give a halo in the psychology sense). We build them, we are horrified when they fall. Why? Because to some extent we never engaged the critical faculties that would tell us that, though they might seem like exceptional soldiers and CEOs, in truth they are flawed and it was always so. We are lazy. And that’s human. But in an odd way we are participants in the fall.
Which makes us responsible.
And so we come back to Ludwig and Longenecker and their advice that we need to prepare people properly for great things. But it also means, I believe, that we cannot just crane these people into exaulted roles and expect all of them to cope alone - we owe them more than that.
This is not an apology for highly placed people who fall from grace. Nor do I want it to detract from their individual responsibility. But perhaps there is more we could do to acknowledge the psychological dynamics of leadership and we should come to terms with the place others have in giving leaders their position, and the responsibilities that come with that.
Kahneman advises that a business meeting should never start with asking everyone for their views. The halo effect means the first person to speak, a chairman or CEO, holds sway over opinion. Far better to have everyone write down their views in advance, in isolation from the gathering, and then discuss them together. Good leaders will do that. People who have an interest in seeing good leadership take place will see that it happens. But it does mean, more than ever, that company leaders need to be challenged - but seriously.
For Nixon perhaps, there were too many people blinded by the halo. Perhaps, if they were not, Watergate may never have happened, Nixon would not have governed with ignominy. For Patraeus his immediate milieu would have been filled with people shining his halo - above and below in the chain of command. Whose to say they did not contribute to his downfall.
Let me know what you think.


Max Campbell-Jones said...

I take your point about the circle around the leader helping to support and augment the halo - but the leader has to take personal responsibility. Nixons comment "when the President does it, that means that it is not illegal" can't be blamed on a sycophantic inner circle.
Contrast that with the issues culminating in the resignation of George Entwhistle, which appear to demonstrate a culture of complete leadership detachment, masquareding as empowerment at the BBC. Some consideration needs to be given to ways of operating that allow effective challenge to the (awful phrase) Masters of the Universe.

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