Mark, 53 (Chief Executive Officer)
Introduction: Under Mark’s leadership, the company took less than eight years to grow from $80 million in revenues to several billion. Today the company is at a crossroads. Either it quickly grows itself into a $5-10 billion company (through acquisitions) or it makes itself an attractive target to be acquired. For two years, the company has postponed a decision and as a consequence lacks a viable strategy for moving forward. While it continues to make acquisitions, these have been opportunistic, reflecting the company’s ability to find attractive targets at good prices.
A charismatic leader, Mark generates tremendous excitement. He is intelligent and endlessly hard working, and he believes there is a moral center to his work. He is highly ethical, a strong communicator, and extremely good at connecting with people, particularly important customers. Far more than is common in the industry, he has attempted to make the company’s organization and decision-making style reflect his personal values. Here he has been very successful, as the company enjoys a warmer and more collegial environment than its competitors. Many of the firm’s best executives were creamed off from the firms he acquired, making for an exceptionally capable group of operating managers. As these executives left or retired, however, Mark has not been as successful in finding replacements of the same caliber.
Mark’s leadership style, unfortunately, makes for an organizationally opaque senior management. He refuses to publish an organizational chart, and, like the Ford Motor Company under the original Henry, employees risk being fired if they are discovered to have produced their own. Lacking titles and clear lines of authority, senior managers are forced to debate important matters in seemingly endless meetings and conference calls. As consensus-oriented as this process may appear, it is all but guaranteed not to produce results. Important matters (and far too many trivial ones) are necessarily kicked upstairs to Mark, as he alone possesses final decision-making power. Mark, in fact, enjoys meddling, and does not hesitate to overrule and ignore his senior executives when it pleases him, doing so without explanation or justification.
Despite the peculiarities of Mark’s leadership, the company prospered. In 1998, Mark announced he planned to retire in three years. No longer able to ignore the company’s organizational shortcomings, the board of directors pressured Mark to remedy them before he retired. Their concerns centered on the interplay between strategy and structure. Mark resisted their pressuring him, and the more he resisted, the more they applied pressure.
Active Coping Assessment: The projective techniques indicate that Mark’s internal conflicts over issues of power and authority undermine his considerable conceptual and interpersonal abilities. These conflicts emerge in a leadership style carefully tailored to play to his strengths and avoid his weaknesses. Mark has organized the company around his psychological need to deny that power and authority even exist. He resists formal hierarchy and uses the rhetoric of consensus and empowerment to pretend that all managers have a more or less equal say. The company possesses a careful vocabulary about managerial roles and their relative power. Managers, in fact, are never managers – they are leaders. Subordinates are never subordinates – they are protégés who take direction from their leaders. Mark is very definitely not the CEO – he is merely “a leader of leaders,” and often a “teacher.” Despite his apparent aversion to hierarchy and the trappings of power, Mark is almost despotically autocratic and arbitrary. Although he could never admit this, he makes it very clear that he, and he alone, is in charge.
Mark is unwilling – terrified even – of admitting what projective measures indicate is his passionate desire for power. Desiring power means yielding to aggressive impulses that are extremely frightening to him. Consequently, he must disavow them. At a very deep level of his psyche, he cannot tolerate his impulse to act aggressively. He wants very much to act rashly, even destructively, towards others while fearing that their intentions toward him are equally malign. The only way he knows how to control this impulse is to deny it exists – power, authority, hierarchy are simply assumed away. Of course, power, authority, and hierarchy do not magically disappear because Mark refuses to talk about them. His decision-making style, in fact, is fundamentally quite aggressive – do unto others before they do unto him. On the behavioral level, therefore, he effectively emasculates other executives while doing everything in his power to avoid their emasculating him.
The company has been unable to commit to a particular growth strategy because Mark resists the advice of his directors, consultants, and his own strategic planners. He does not want to be hemmed in by anyone imposing options and choices – even if he agrees with their suggestions. Similarly, he resists the mandates of the board to define an organizational structure that will survive his retirement.
Armed with this understanding of Mark’s decision-making style, the company’s organizational and strategic shortcomings become apparent and easily explicable. When his control is challenged, he does not demonstrate active coping. Not only does he not allow his executives to make decisions, he is threatened by their competence. He tolerates capable executives only as long as they defer to his leadership. Even then, he sabotages anyone who might be a potential successor and rejects capable outside candidates. Action-oriented senior executive work around Mark’s aversion to their making decisions by simply going ahead without consulting him and then “begging his forgiveness” for having been so rash and ill-considered.
Mark’s conflicts with the board of directors are almost preordained. Directors are effectively his only superiors, and he will do virtually anything to resist their giving him direction or their making decisions that he would prefer to make. Because he cannot tolerate head-on conflict with the board, he usually will not overtly resist. Rather, he indicates his willingness to do as they would like while in practice he only goes through the motions. Mark is very good at dithering, of using motion to give the appearance of progress. This is the reason the company has gone three years without the strategy/structure matter having been resolved. The directors’ increasing frustration only makes them more insistent that he act, and the more they pressure him, the more he frustrates their desires. Mark’s tactic with the board is effectively brinkmanship – to go eyeball-to-eyeball and then see who blinks first.
Mark does not – indeed, cannot – see himself as hurting the company by these maneuvers. To the contrary, he regards himself in grandiose terms, as the savior without whom the company would come crashing down. He inhabits the company’s most dramatic role and believes that, in these stormy times, he alone can save the company – just as he alone built the company. By being free to be capricious, to overturn decisions as he sees fit, he is able to preserve his power as pure potential, giving it a pristine quality that denies the limits of his actual power – the fantasy of a savior requires that he have unlimited power and make all decisions for the company. Despite his superficially nurturing and communal demeanor, other people’s interest are finally of no consequence to him. The company exists as the audience and opportunity for him to act out his fantasy of saving them from their mistakes. He does not comprehend how autocratic his behavior actually is.
Having an increasingly weak management team is unfortunate because Mark sincerely does not want to fail. At work, he is driven not only by a tremendous fear of failure – of which he is aware – but also by a fear of leaving an environment that is warm and familiar – of which he is not aware. The company he created has become his home. He has no outside interests, and few outside social affiliations. He does not want a successor because that means he will have to leave the home he has created for himself.
Recommendations: In many respects, Mark is the sort of leader a venture capitalist looks for to grow a start-up venture into a profitable business. Mark is a gifted and creative strategist who sees the big picture and finds meaning in the challenge of changing the world and leaving behind a legacy. He does not seek to understand the future – he attempts to create it. He has a compelling vision and will take risks to make it a reality. He is detail oriented, exceptionally hard working, independent, and not easily impressed. He is deeply knowledgeable about the company’s operations and its products. He is especially effective in attracting followers, and he does so through his elegant and sophisticated use of language to explain what he intends to accomplish.
But let us also be clear about his liabilities. He demands the organization identify with him and become the living embodiment of his values. His “teaching” involves indoctrinating his executives through speeches, memos, and occasionally confrontations he almost always wins. Despite the guise of a participative style, he dominates meetings and tends to overwhelm subordinates. Unconsciously, he wants to be a dictator but consciously tries to present the image of being a facilitator of equals. His unconscious wish to dominate others seeps through. Others sense it. It is evident in the effects of his leadership. But his mind sees only that which it wants to see and avoids that which creates so much anxiety that he must deny its existence. His leadership style is problematic in this period of the development of the organization. While he is relentless in pursuit of his goals, his passion is also marked by the primitive danger of extinction – Mark too willingly courts risk when the company would now be better served by procedure and routine. Adept at leading the company when it was smaller, Mark’s methods have finally become inappropriate.
Mark’s hands-on, controlling style is not suited to a huge corporation that needs to become even larger if it intends to remain independent. What were once his strengths have become his weaknesses. Rather than cope actively with the new demands of his expanded responsibilities to set corporate objectives, he instead retreats into minutiae and trivia. When he does involve himself in operating decisions, his managers neither seek nor welcome his meddling. As the demands on his leadership have evolved, Mark has been unable to adapt. He still runs to the company as if it were a start-up. He is not prepared to listen to advice or delegate responsibility and probably believes that on most matters he knows more and has beer judgment than any of his executives – or directors. As more independent-minded players leave or are pushed out, succession becomes a particular problem. He runs the greatest risk of isolating himself at the moment of success.
Mark has a tendency toward grandiosity. When the company was smaller, this grandiosity was a kind of competitive advantage because it allowed him to inspire, lead, and build. As the company grew, however, its achievements fed his grandiosity while shrinking his span of control Feeling less and less in control, he holds on even more tightly to the illusion that he is right and others are not. Were Mark less conflicted about power and authority, were his own psychological growth to track the growth of the company, he would be able to share his power with his senior executives so they could operate in his stead, making decisions that he should not.
Mark’s issues are deep rooted. Once an active coper, his conflicts over power and aggression are so great that he expends too much psychological energy defending against them rather than coping with the actual demands of his role. At the age of 53, he is not likely to outgrow them and they can only be addressed through psychotherapy. Coaching and mentoring will not work because he is too emotionally remote. The problems identified by the board of directors will, in all likelihood, continue to be problems. When the board finally loses patience, Mark will be ousted.
Mark is a nearly ideal leader to build a start-up into a profitable business. Investors and directors must appreciate, however, that when the company requires more stable, routine management, his strengths will become liabilities. When bureaucracy and procedures are needed, Mark is not one to give up control. At that point, directors could facilitate his gracious exit by offering him the opportunity to repeat his success at another start-up.