What’s worse, being unemployed or working at a job you hate?
If you’re like most people, you chose the first option, being unemployed. The anxiety that unemployment produces is toxic after all. And even if you’re toiling day and night in the dungeons of a hate-factory, at least you’re bringing in money, am I right?
Prepare to have your mind blown:
A 2011 study conducted by a team of social scientists at the University of Canberra in Australia concluded that having a job we hate is as bad for our health and sometimes worse than not having a job at all. Levels of depression and anxiety among people who are unhappy at work were the same or greater than those who were unemployed.
That depressing tidbit is from Leaders Eat Last: Why Some Teams Pull Together and Others Don’t by Simon Sinek. Last seen explaining why we need to start with why in our work and in our organizations, Sinek is back with his 2014 book on the subject of leadership.
And in particular, bad leadership.
Because chances are those hated jobs, the ones that are as bad if not worse than not having a job at all, are being run by piss-poor leaders.
What Makes a Bad Leader? 3 Thoughts From Leaders Eat Last
1. A Weak Culture Breeds Self-Preservation
Bad leaders foster weak cultures.
Weak cultures invert the purpose of the company. A group of people comes together to work at a company in order to accomplish something no individual member could do on his or her own.
In a weak culture, the people are threatened. Their fight-or-flight instincts kick in. And suddenly, it’s every man or woman for him or herself:
In a weak culture, employees see their employer just as Milgram’s subjects saw the scientist—as the final authority figure. A leader who presides over a weak culture does not invest in programs to build the confidence of their people so that they will do the right thing. Instead, command and control perpetuates a system in which people will more likely do the thing that’s right for them. Uncertainty, silos and politics—all of which thrive in a command-and-control culture and work counter to the concept of a Circle of Safety—increase our stress and hurt our ability to form relationships to the point where self-preservation becomes our primary focus.
Good cultures, on the other hand, promote the following ethic according to Sinek:
Do the right thing, not the thing that’s right for you.
There’s a profound difference between the two mindsets.
In a weak culture, employees and managers are incentivized to look out for themselves. Sinek’s example reminds me of those companies that routinely fire the “bottom 10%” of their workforce every year, regardless of absolute performance.
There is only one lesson, one takeaway in a company like that: Make sure the guy next to you looks worse than you. That’s the only way to stay safe, to be valued. Your career could depend on it.
What filters out of such toxic brew is a deadly combination of aggrandizement and sabotage (emphasis mine):
I am always struck when a CEO of a large investment bank is shocked to learn that there was a “rogue trader” in their midst who, in pursuit of personal gains or glory, made decisions that caused damage to the rest of the company. What else should we expect from a culture that reinforces and reward self-interested behavior? Under these conditions, a CEO is basically gambling that their people will “do the right thing.” But it’s not the people who set the course. It’s the leadership.
A good culture promotes the long-term view. It asks its members to look out for the interests of the company as a whole in order to keep it running sustainably.
If you do so, you will be protected.
2. Leaders Who Don’t Protect Their People Are Offensive
Sinek points the finger squarely at bad leadership for the problem of CEO pay (emphasis mine):
This is the reason we are so offended by the exorbitant and disproportionate compensations of some of the leaders of investment banks. It has nothing to do with the numbers. It has to do with this social contract deeply ingrained in what it means to be human. If our leaders are to enjoy the trappings of their position in the hierarchy, then we expect them to offer us protection. The problem is, for many of the overpaid leaders, we know that they took the money and perks and didn’t offer protection to their people. In some cases, they even sacrificed their people to protect or boost their own interests. This is what so viscerally offends us. We only accuse them of greed and excess when we feel they have violated the very definition of what it means to be a leader.
Hypocrisy is at the heart of bad leadership. Sinek says a good leader sacrifices right alongside you when times are bad.
A bad leader, on the other hand, makes sure the rules don’t apply to him when the going gets tough (emphasis mine):
I am often amused by the irony of CEOs who believe in a “pay for performance” incentive model inside their companies then expect huge payouts when they leave the company in shambles. Why do shareholders and boards not write into their contracts a prohibition against any severance if a CEO leaves the company in disgrace? Would that not at least be consistent and in the best interest of the company and its shareholders?
They don’t do it because boards often have direct ties to the CEO and the executive team. Conflict of interest, anyone?
When leaders are seduced by short-termism and self-interest, mistakes can go unnoticed and warnings can go unheeded.
Take the tragic example of the BP gulf oil spill.
3. The BP Oil Spill Had Everything to Do With Bad Leadership
Image taken from NASA’s Terra Satellites on May 24, 2010 of oil slick off Mississippi Delta.
On April 20, 2010, the Deepwater Horizon oil platform off the Louisiana coast exploded. Approximately 5000 barrels of oil a day began leaking into the Gulf of Mexico, threatening ocean life, wetlands, and the livelihoods of Gulf Coast residents.
But the origins of the 2010 explosion trace back to decisions that BP’s leadership made some 5 years earlier (emphasis mine):
By the spring of 2005, the Deepwater Horizon project was already more than six weeks behind schedule and $58 million over budget. The pressure on the company was intense. Each additional day’s delay was costing another $1 million. Eventually, BP would plead guilty to eleven felony counts, in addition to which it faced more than a million claims filed by aggrieved parties. BP has already paid $713 million in lost tax revenues to Louisiana, Alabama, Florida and Texas. The company estimates the cost of overall settlements at $7.8 billion, on top of the $17.6 billion fine imposed for environmental violations.
Based on the fines alone, BP could have been twelve years behind schedule and still have lost less money than it has over the oil spill. As Professor Stout points out, BP would have done much better for its shareholders even if it had delayed well development for as long as a year in order to follow proper safety measures.
Short-termism—from management, board members, and shareholders on down—created the decision-making environment that led to the Gulf oil spill catastrophe.
The rise of shareholder primacy and an overreliance on external, dopamine incentives to drive that primacy has put executives in the habit of thinking for the short term, a trend that is not surprising if you consider that the average tenure of a corporate CEO is five years.
Maybe five-year plans would be useful if anybody were around to see them through.
But in today’s turbulent business environment, long-term vision takes a backseat to short-term profits. It’s not a stretch to say that a professional CEO’s job is to meet the quarterly numbers—no matter the risks.
And perhaps that’s why the economy has gotten so toxic.
As agile thinker Steve Denning says, business leaders (at least some of them) have turned into vampires. These vampires—superstar CEOs, hedge fund managers, price-fixers, and tax evaders—drain resources and value from our companies and the economy in order to enrich themselves.
And we let them get away with it.
3 Takeaways From Bad Leadership Examples
In Leaders Eat Last, Simon Sinek argues that the prevailing approach to management has become a lot like gambling:
Ups and downs, wins and losses. Thrilling, exciting. Bright lights, high intensity. Vegas. If you have enough money to keep playing through the lows, then you could hit the jackpot. But if you can’t afford to play for long, if you are not sure you can time your exit just right or if you are looking for something sustainable and stable, then you would probably prefer to invest in a company with a strong Circle of Safety. Having a few roller-coaster companies in an economy is fine and good. But when there are a high number of leaders who put the thrill of a dopamine hit over the hard work of looking after people, the entire economy becomes unbalanced.
What can we do?
- Take the long-term view. The disease of short-termism has ravaged our businesses, our economy, and our politics. Having long-term vision isn’t the same as having long-term planning (which doesn’t work anyway). It’s about thinking further than next week or next quarter. It’s about sustainable development, one of the 12 central Principles of the Agile Manifesto.
- Do the right thing. “Rogue traders” don’t thrive in organizations that value doing the right thing over doing the thing that’s right for you. Adam Smith is right that self-interest can lead to good outcomes in the aggregate, societal level. But we’ve probably taken this idea too far. At the micro, local level, too much self-interest is still a bad thing. The self-preservation instinct is powerful—so powerful that you can easily lose track of your values. A safe environment—a strong “Circle of Safety” as Sinek would put it—gives people the comfort and license to do the right thing for everyone.
- Protect people. Leadership isn’t about your role or your job title. It’s a burden. A burden you take on to protect others. The title Leaders Eat Last comes from a practice U.S. military officers perform—they eat after their men are done. If there’s no food left over, they go hungry. It’s about sacrifice for the good of the team—it’s that simple.