Thursday, May 10, 2012

10 big mistakes successful leaders make

CBS News
By Steve Tobak

(Photo courtesy Flickr user Alex E. Proimos)

(MoneyWatch) COMMENTARY Executives and business leaders don't just peak and lose their potency over time, like wine. They change. … Success affects everyone differently and not necessarily in a good way.…

If you know a little about human psychology, that shouldn't surprise you. You've got to really know yourself, possess unusual self-confidence, and be pretty well grounded in reality to withstand the ego-inflating onslaught of winning big in business.

Since we're all human, we're all susceptible to the unusual pressures and pitfalls that come from achieving what we've always dreamed of. In my experience, these are the ten most common traps successful leaders fall into.

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Becoming the status quo. Startups often break into the market by challenging the status quo. The problem is when success makes them the status quo, yet they don't realize it. That was evident when Apple and Google challenged the BlackBerry with the iPhone and Android platform. It's ironic that RIM's co-founders forgot that they were once the challengers. …

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Tunnel vision. They lose perspective and become rigid, sticking to their myopic vision like glue. Since competitors are unpredictable and markets are always evolving, it can be deadly to a business. If their vision fails to gain traction, they often double down and become even more grandiose. …

Losing their fear. Fear is a key emotion that warns you when to be alert and when you need to act. When you start to think that success is inevitable and believe you can't fail, you act irrationally, become reckless and take risks you shouldn't or without due consideration. …

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Fear of losing. The opposite of becoming fearless to the extreme is becoming too risk averse because you're afraid of losing what you've won. … Once that fear of taking chances sets in, you're business is doomed.

All knowing. They stop asking questions and don't really listen when key stakeholders -- customers, executives, directors, investors -- tell them something they need to hear. They think they have all the answers, that they're the smartest guys in the room. They miss critical warning signs.

Isolated. … They become insular in their thinking and cut themselves off from others with layers of bureaucracy and hierarchy. There are also usually physical manifestations like executive offices, suites, buildings, and assistants to keep the masses out.

Controlling. In the name of maintaining a culture of entrepreneurship, they become obsessed with keeping things the way they are. That often translates to micromanaging and controlling every little thing. They fail to let go by adding processes and infrastructure that growing businesses need to effectively scale. …

Surrounded by yes-men. There will always be weak-minded lackeys that tell leaders what they want to hear and sugarcoat negative news to gain favor. But their power only comes from weak leaders with low self-esteem that need their egos to be constantly pumped up.

Lost the magic. Business success is nearly always the result of a number of factors. Sure, there's a product or service that customers are excited about, but there's also pricing, timing, partners, even luck. Whatever the combination, it's tempting for successful entrepreneurs to think it's all about them, not the "magic formula" that got them there.

If I build it, they will come. Entrepreneurship works in America because anyone with an idea can get funding and, if the stars are aligned, develop a hit product or service. To get out of the "one hit wonder" phase and develop a second and third successful product, however, requires a willingness to embrace marketing, sales, operations, customer service and other business functions.

© 2012 CBS Interactive Inc.. All Rights Reserved.

Steve Tobak is a consultant and former high-tech senior executive. He's managing partner of Invisor Consulting, a management consulting and business strategy firm. Contact Steve, follow him on Facebook, or connect on LinkedIn.
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