First published in the Sunday Times on 20th November 2016.
Confidence is an obvious requirement for business success — but humility is an asset, too.
You need self-confidence to start an enterprise — a powerful belief in your ideas and the courage to take a commercial risk. But egotism is a dangerous flaw. It alienates talent and leads to groupthink among followers, because in such organisations no one dares challenge the boss.
I have seen more good businesses fail through hubris than for almost any other reason. The path from glory to self-destruction is well trodden.
Early wins become self-reinforcing and a positive momentum builds. A company creates a strong brand and attracts keen investors and customers who are fans, together with high margins. Cashflow enables expansion and a growing sense of invincibility. A virtuous circle of success and a narrative of managerial brilliance is constructed.
But all these victories can feed a misplaced sense of infallibility. Entrepreneurs who defied the consensus early in their careers, proved the sceptics wrong and built a great company are vulnerable to visions of imperialism. Typically they become conceited and end up thinking they have all the answers — when of course no one does.
I meet some self-made men who feel the need to boast about all their towering achievements and how rich they are — even on a very first introduction. Such individuals are alpha males, competitive by nature, who want to show off their prowess to any possible rival. But I don’t think such boasts reveal strength. To me they tell a story of underlying insecurity.
Moreover, they do not necessarily go hand in hand with the best leadership. They tend to demonstrate narcissism and excessive pride. Frequently, if these bosses make mistakes — as we all do — they will engage in denial and blame others.
Superior leaders learn from criticism. They are aware of their own limitations and aim to compensate for them through productive partnerships and self-improvement. A degree of modesty and not taking oneself too seriously are indicators of a resilient personality, rather than a pushover. Of course these matters are cultural: in Britain we cannot abide arrogance among those who have made it, whereas in America they assume high flyers will be full of themselves.
I know I make plenty of errors, and have to remember to apologise for my impatience and temper. I have also made my share of poor investments and bad judgments in business. Indeed, generally the most popular speech I give is one where I go into detail about my most expensive and painful cock-ups. But I don’t think admitting such failures is necessarily a sign of weakness. Of course it is bad for one’s morale to fetishise defeat; nobody chooses setbacks and losses over accomplishments. But by its nature, capitalism involves a fairly high proportion of projects that turn out to be a waste of time and money, as well as myriad other dangers, such as fraud, fire, recessions, insolvent customers, litigation, unreliable suppliers, strikes, excessive taxes and punitive new regulations. These hurdles (many beyond one’s control) are part of the journey; compromise and evolution are necessary to overcome them.
The best entrepreneurs have the right balance of inner certainty and self-deprecation to cope with problems and not lose their audacity and ambition. They understand the importance of listening, of watching their competitors closely, and learning from them at every opportunity. Founders need to be in charge and decisive, but they must also work as part of a team and be open to challenge. Leaders who brook no dissent are doomed to be surrounded by sycophants. That is not a recipe for optimum results in the long run.
Innovation is the lifeblood of any dynamic business, and in the 21st century it is almost always a collaborative endeavour. I do not believe in the creativity of committees, but with a few exceptions I think the concept of a lone inventor has become more of a myth than reality. “Team science” is the mantra at the Institute of Cancer Research, which is rated among the very best of any academic institution in the world at discovering drugs.
Anyone who helps develop new ventures knows the significance of adaptation, diverse suggestions and humility. Strong characters should try to see the merit in the quieter contributors around the table. Where possible, credit needs to be shared to encourage all members of management — which means selflessness on the part of the chief executive. Society over-emphasises the importance of the single boss at the top, because we are obsessed by individuals. The truth is never so simple; great companies are always the result of a joint undertaking.
Another reason why bosses with too much testosterone cause trouble is that their presence tends to lead to excessive board politics. Professional investors cite such disharmony as the biggest single reason for selling a stock.
Of course companies are not democracies, but they should not be totalitarian states either. Overbearing bosses, full of bravado, are not just bad company; they can be bad for their company, too.