Have you ever had a boss who simply wouldn’t listen to your perspective? Maybe they dismissed you despite tons of supporting evidence that you might be right!
Experience does eventually yield expertise and credibility. That brings a lot of perks. Novices look to those “old-hands” for guidance, and we all benefit from the wisdom of more experienced peers.
But it’s easy to become closed-minded and arrogant; to use experience as a justification not to listen or learn.
The Wolf of Rubbermaid
Rubbermaid was born as the Wooster Rubber Company in 1920. Over the ensuing decades, the company would weather challenges, including World War II, eventually going public in 1955.
Throughout the 1980s, it grew by orders of magnitude, pivoting away from their namesake rubber to producing products with plastic resin. Those were the years of most dramatic growth, continuing into the new decade.
In an ironic turn of fate, Rubbermaid won Fortune Magazine’s prestigious America’s Most Admired Company title in 1993 and 1994; the same years that their tides turned downward.
As newly promoted CEO Wolfgang Schmitt took the reins in 1991, the marketplace was changing. Walmart and other “big box” stores were emerging and creating downward pricing pressure.
Along with the market changes, Rubbermaid’s operational performance was slipping. They were having manufacturing problems and missing shipments. Managers within the company pleaded with Schmitt to address those issues.
They also tried to persuade him to invest in new materials and products. The managers saw the perfect storm of challenges: a new market dynamic, operational challenges, and an outsized dependence on one material, plastic resin.
The CEO dismissed their warnings and suggestions.
Wolfgang Schmitt had been at Rubbermaid for nearly 30 years and believed in his own expertise. He was certain that the managers were wrong, and that simply doubling down on resin products and adding massive volume would sustain the growth.
His certainty was so emphatic that the executive team followed his lead and ignored the managers’ protests. Instead of pivoting to new materials or products, Rubbermaid formed a partnership with Walmart, solidifying the commitment to resin.
In 1993 the price of resin started to climb. As a result, Rubbermaid had to raise prices. But Walmart—their giant customer and partner– objected. After all, they were the low-price leader. And it would be easy to replace Rubbermaid with cheaper products from abroad.
From January 1993 through September 1998, the S&P rose 130%. Over the same period, Rubbermaid lost 24% of its value. Eventually, the company would be acquired by Newell, who reorganized, closing plants, and laying off thousands of employees.
Schmitt had felt that his decades with the company—and his CEO title—had earned him the right to be believed—as well as to stifle the opinions of others.
Rubbermaid is an especially egregious example. But the phenomenon–called “earned dogmatism” is not unique.
Start-Ups Are Safe, Right?
You might think that start-ups are immune to earned dogmatism because no one has significant tenure. But a previous role or exit can easily convince us that we possess superior insight and knowledge.
Of course, over-confidence and hubris come in lots of flavors. Earned dogmatism is just one of them. But when leaders are over-confident, whether they justify it through their track record or their title, it generally doesn’t bode well for future results.
Sometimes the disappointing results emerge solely because of that over-confidence. For example, some research suggests that the reason so few mergers produce new value is because they never should have been undertaken at all.
Instead of heeding signs that the merger will fail, an over-confident CEO will wield his authority to get the deal done. Of course, if the company needs outside funding, bankers or investors have no problem gainsaying the CEO’s opinion. But plenty of companies fund their own acquisitions and have no input from skeptical bankers.
Earned dogmatism can create direct, strategic problems like Rubbermaid’s. But more often the impact is indirect and at remove.
The Culture of Cowing
Think about your own experience dealing with an arrogant peer, friend or even family member. If you are like most people, then you avoid confrontation. When someone is so emphatic in their certainty —even if you believe they are absolutely wrong —it’s easier just to stay quiet.
Employees who work for an over-confident boss know that contradicting her won’t go well. So they do the same thing that you and I would at Christmas dinner with a know-it-all uncle.
They stay quiet. Try not to disagree. Withhold their own insights.
Psychological safety is something that has been written about at length. And the surest way to destroy it is for leaders to make pronouncements with the absolute certainty that comes from over-confidence—especially if they justify that confidence with a resume or track record.
But remember, past performance is no guarantee of future results.
It’s hard enough to contradict anyone who is super-emphatic about their own expertise and certainty. But when they are also your boss, it becomes near impossible.
Series C to Series End
I used to have a client, “James”, who was the co-founder and CTO of a well-funded start-up. A repeating theme in our conversations was the degree to which his co-founder, the CEO, turned every conversation into a debate. James had genuine concerns about the company’s direction. But if he broached the topic the CEO would berate him, never failing to include a boast of his years as an investment banker and consultant.
The basic message was “I know better”. Ultimately, James stopped sharing his insights. He also resigned from the company.
As it happens, I continued working with the rest of the leadership team and got a view of the whole scenario. The CEO’s over-confidence was part of company lore—legend among the executives and managers. Once any new hire got subjected to the CEO’s belittling and relentless retort, they would never again willingly contradict him.
There was no space for questioning the CEO’s decisions. That lack of point and counterpoint gave him free rein to go all-in on his own strategic beliefs. Without the benefit of contradictory evidence or argumentation, they were never stress-tested. In the short run, the culture of “agreeability” led to constant management turnover. In the longer run, executing untested and flawed strategy was fatal. The company would face a couple of down rounds and then liquidation.
Your Own Dogma
As an explanatory model, earned dogmatism may make us feel better about ourselves when a boss shoots down an idea we present. But its real value is as a cautionary note while we grow more experienced and expert.
We are all vulnerable to hubris. The longer we work and the greater prestige our title gives us, the more likely we are to believe our own press. But, regardless of how certain we may be about something, it’s wise to listen to —even solicit—opposing viewpoints. [click to tweet]
This becomes harder the more senior we get. People do not actually like speaking truth to power. They’d prefer to garner favor and be agreeable. Agreeable folks make friends, get invitations, and get promotions. Our very evolution has imbued most of us with the desire to get along. So, for the most part, unless you explicitly ask for opposing views, you won’t get them.
A Culture of Discovery
If you were lucky enough to work at Netflix in the early days, you would have been onboarded with the famous “Culture Deck” which listed as one of the core values, Courage. It was illustrated with a paragraph that included: You say what you think. Even if it’s controversial.
For leaders, being willing to say what you think even if it’s controversial is great and easy when you’re the one speaking. But that culture also means hearing and entertaining contradictions from below.
Then, we need a different kind of courage: the courage to be wrong.
When the inherent drive to be right comes into conflict with our commitment to a mission, goal or simply, to finding out the truth—we need to engage that courage and invite the scrutiny. There are few of us who are truly immune to the impulse to defend our views. But winning the point and feeling like you’re right a sort of booby prize when, in fact, you’re wrong.
It’s easy to indulge that self-righteous reflex when you are in charge. But, it may cost the discovery of something extraordinary—something that could far outweigh the momentary ego trip of pulling rank. It’s not such a high price to pay: One moment of ego loss for an insight, breakthrough —or a subordinate having a huge win. It’s a pretty good return on the investment in humility.
