Tony Hayward of BP, Mark Hurd, CEO of HP and William Weldon of Johnson & Johnson have been identified by Sydney Finkelstein, Steven Roth Professor of Management at the Tuck School of Business at Dartmouth College, as the worst CEO’s of 2010.
Professor Finkelstein found that they all share the “unfortunate combination of believing they’ve got it all figured out while turning a blind eye to early warning signs.” Finkelstein attributes much of this to “arrogance,” a red flag for any CEO wanting to lead his or her corporation in these choppy economic waters.
Three key warning signs of arrogance are “don’t tell me – I know,” a sense of entitlement, and an obsession with public image. According to Professor Finkelstein – here’s how the three CEO’s fared:
Hayward won the award for the sense of entitlement. Who could forget his arrogant performance in front of Congress or that he spent the day waiting for his yacht to race while the people of Louisiana fended for themselves. It was a performance only applauded by the likes of Leona Helmsley. Hurd wanted to get back to his life – well so did the people of Louisiana.
Mark Hurd of HP should have paid attention during the company’s mandatory sexual harassment training and exemplifies “don’t tell me I know – or in his case I don’t care.” At his level filing false expense reports and having an inappropriate close personal relationship with a contractor is just plain hubris.
Cathie Lesjak, HP’s interim CEO, wrote in a letter to employees:
“As we regularly remind all employees, each of us is expected to adhere strictly to the Standards of Business Conduct in all of our business dealings and relationships. This expectation applies with even greater force to HP’s CEO and other senior executives who, given their positions, must set the highest standard for professional and personal conduct. The investigation that was conducted revealed that Mark had failed to meet this standard.”
Johnson & Johnson CEO William Weldon was notably obsessed with his public image – but an image of power and wealth not of corporate or fiscal responsibility. The day Weldon announced 8,100 layoffs at his company he was also buying an $8.45 million waterfront lot in North Palm Beach, Fla., from former General Electric CEO Jack Welch.
With Johnson & Johnson’s once-golden reputation tarnished by 11 recalls of medicines, contact lenses and hip implants in as many months, Weldon told AP News “I know the company let consumers down.” He let employees down too.
Lessons learned from the failings of CEO’s at Fortune 500 Companies have direct application to all of our businesses.
As business leaders we need to remember to create opportunities for presenting and examining new ideas and new approaches. As leaders we then need to take the next step and adopt the good ones.
Mark T. Jensen is the co-founder of Bowie & Jensen and leads the firm’s transaction department. Mr. Jensen can be reached via email at Jensen@bowie-jensen.com.