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The High Cost of Executive Bullying

As former IBM CEO Louis Gerstner once said, "People should fear the competition, not their bosses." Too many leaders confuse openness with weakness. But there’s a difference between strong-minded and bull-headed.

For generations bullies have terrorized their victims at school, in the locker room and on the playground. More recently, incidents of cyber-bullying and violence against gays have received national attention. The victims of such bullying often feel afraid, out of control and even stupid. They respond by drawing as little attention to themselves as possible and hoping it doesn’t happen again.

Not surprisingly, this same reaction occurs when the CEO or other senior leaders subject people to bullying at work. While the corporate bully may not look or act like the playground thug, the victim’s response in either case is to hunker down and get out of the way. The schoolyard bully uses physical violence; the executive bully uses fear or the threat of humiliation to silence critics or contrarian voices.

Executive bullies don’t all have the same personality. The most pernicious type of corporate bully is the one who comes across as polished and sophisticated. Everything about him sends the message that he is the smartest guy in the room — the one who will make the decisions and get the credit. Although he may ask for others’ opinions and give lip service to their ideas, it’s clear to everyone that it’s “my way or the highway.”

In a corporate setting, that adds up to lost opportunity. Employees’ voices go unheard. Product defects are covered up; unethical practices continue unchecked; untenable financial risks are ignored; brilliant ideas never see the light of day. People are intimidated into keeping quiet.

Bullies may “shoot the messenger,” punishing those who deliver unwanted news. More common, however, is for executive bullies to flaunt their power by summarily dismissing ideas or warnings they don’t want to hear.

The effect is especially harmful when senior team members bully their own colleagues. Ideas that could help resolve strategic and operational issues are not even broached, leading to poor decisions and inadequate solutions. The senior team’s ineffectiveness reverberates throughout the company.

People in positions of authority are invested with legitimate power, and using it constructively to accomplish business goals is justifiable and expected. But in today’s world, in which businesses must make complex decisions in the face of incomplete information and a rapidly changing landscape, no single person has all the answers. Leaders who are dismissive, instill fear or continually demonstrate “who’s boss” discourage employees from expressing their ideas. What would have happened if the young Larry Page or Mark Zuckerberg had needed to convince a powerful executive bully that their game-changing ideas were worth pursuing?

Senior leaders who pay attention to what colleagues are saying are in a better position to meet strategic objectives and deliver sustainable results.

JPMorgan Chase CEO Jamie Dimon, who reportedly can be brash and domineering, nevertheless heeded the warnings of senior executives in 2006. They cautioned him against investing too heavily in risky collateralized debt obligations built on mortgage-backed securities. That was at a time when other financial institutions were making a killing on CDOs.


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