With the flameouts of Ed Zander at Motorola and a number of hedge-fund managers whose “rocket-science” CDOs have brought the world’s financial system to the brink of ruin – oh, and the current US President – this free article at the Wall Street Journal is apropos. Titled Keys to Spotting a Flawed CEO — Before It’s Too Late management professor Terry Leap offers a set of warning signals.

Here’s a few:

  • An overt zeal for prestige, power and wealth. A manager’s tendency to put his or her own success ahead of the company’s often is evident long before that person is ready to assume the CEO post.
  • A proclivity for developing grandiose strategies with little thought toward their implementation. These executives may assume that others at lower levels will magically turn strategy into reality.
  • An impulsive, flippant decision-making style. CEOs who approach decision-making with clever one-liners rather than with balanced, thoughtful and informed analyses can expect to encounter difficulty.
  • A penchant for inconsiderate acts. Individuals who exhibit rude behavior are apt to alienate the wrong person at the wrong time.
  • A superb ability to compartmentalize and/or rationalize. Some executives have learned to separate, in their own minds, their bad behavior from their better qualities, so that their misdeeds don’t diminish their opinions of themselves. An important internal check is missing. Others are always ready to cite a higher purpose to justify their bad decisions.

[emphasis added]

Prof. Leap offers several suggestions for the hiring process. My favorites:

  • Don’t assume that past success is a predictor of future success. As CEO, an executive will face a whole new set of personalities and conditions, especially when switching companies.
  • Determine how much of an executive’s career success has been based on favorable economic and industry conditions and the support of colleagues, and how much has been based on the executive’s individual efforts. Pay close attention to how candidates performed when industry conditions were bad, when controversies arose or when difficult decisions had to be made.
  • Be clear about ethics. Provide as much information as possible to finalists about how the board expects shareholders, prospective investors, customers, employees, financial institutions, auditors, regulators, political figures and other stakeholders to be treated.

The StorageMojo take
I doubt Prof. Leap’s excellent suggestions will keep stop many bad hiring decisions. Hiring management – be they boards or voters – often fail to do the hard work of framing the problems that an executive needs to manage.

I’ve seen many executives hired whose experience and desires were only marginally related to the new job and who failed. For example, an executive in channel marketing being asked to take over marketing and product management for a direct sales company. Or a big company exec moving to a small company. Some people will surprise. Most will flounder.

Candidates are expected to put their best foot forward. The real problem is willful blindness on the part of the hiring management team. “We have problems. This guy comes from a successful company, so maybe he can solve them. Just because he never has before . . . .”

It isn’t always about the candidate. It’s the people doing the hiring. Perhaps the good professor can offer advice for that problem.

Comments welcome, as always.

For StorageMojo’s non-US readers who’ve wondered what has happened to America: most Americans share your dismay. President Bush now has 50% of Americans strongly disapproving of his performance. Another 14% moderately disapprove.

That puts him in a statistical dead heat with Richard M. Nixon’s low point, just before he was forced to resign over the Watergate break-in coverup.

Mr. Bush is, of course, confident he will be vindicated by a higher power.