CAMBRIDGE – I just came from a family business engagement in Toronto where I met for the first time a high net worth (HNW) business owner with a different personality. After the customary introduction, he started to showboat and exhibited boisterous behavior while bragging how he accumulated his wealth. When I asked him to choose between fame and fortune, he struggled to answer and insisted that it should be both. During our session where he practically talked 80% of the time, I told him that I have no intention to pursue the succeeding sessions because of his attitude. Obviously he was stunned as he was not used to being rejected. This individual best exemplified the personality disorder known as hubris.
As family business consultants, our role can be daunting and stressful especially when we are confronted with hubris aptly called in governance language as “founder arrogance.” It is one of the biggest issues that is causing many businesses to degenerate. Working with these high net worth (HNW) egocentric individuals can be cerebrally and emotionally challenging.
According to Steven Berglas, a former Harvard faculty member and executive coach, hubris is a “reactive disorder that can take hold after people have experienced continued success, had a major accomplishment or read too many laudatory articles about themselves. He hastens to add that it is the sin of overweening pride or arrogance and a disease on the loose that must be contained.”
Wikipedia describes hubris as “a personality quality of extreme or foolish pride or dangerous overconfidence, often in combination with arrogance. In its ancient Greek context, it typically describes behavior that defies the norms of behavior or challenges the gods, and which in turn brings about the downfall, or nemesis, of the perpetrator of hubris.
Hubris often indicates a loss of contact with reality and an overestimation of one’s own competence, accomplishments or capabilities. In modern usage, it is also referred to as “pride that blinds because it often causes the person to act in foolish ways that belie common sense.”
In the world of family business governance where conflict is inherently part of the ecosystem, flawed behaviors and past hurts by the leaders and their offspring, when left uncheck, almost always mutates into some form of power struggle and generational conflict. With certainty, as the conflict escalates and conflicted members refuses to yield, hubris takes over and becomes “that pride that goes just before the fall.”
In many ways, this behavior has a direct correlation to the short tale “The Emperor’s New Clothes.” Written by Hans Christian Andersen in 1837, this story is about an emperor who was sold a magnificent set of clothes by two con-artist. The parable talks about how pride, ego and power can lead one to think that he is superior and intelligent. It also highlights how a crowd can and will fall behind an authority figure even through stupid actions. It takes an innocent child who is outside the social norms to point out what everyone can see.
For individuals afflicted with hubris, there is a Confirmation Bias: He or she is above everybody else and adjusts his or her reality to confirm this bias. And there’s more, for them it is some form of Defense Mechanism: When there are some bad decisions made, they deny their mistakes and stubbornly refuses to admit them.
In the workplace, few people are willing to risk the wrath of the leader by telling him or her that they are arrogant. As a result, this form of collective apathy can leave the owner blind to the harsh realities of what’s going on in the business and the competitive environment. And all too frequently, the task of telling them that they are wrong falls to an outside adviser./PN
Prof Enrique Soriano is a World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein, a research and consulting firm in Asia that serves family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila, and is currently a visiting Senior Fellow of the IPMI International School, Jakarta.
He is an associate member of the Singapore Institute of Directors (SID) and an advisor to business families worldwide, a sought after governance speaker at conferences, and book author and more than 200 articles and publications, including two best-selling Family Business books (Ensuring Your Family Business Legacy 2013 and 2015). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com
