If you think you know it all, your business will fail.
You have to be cutthroat and care about number one to get ahead in this world, especially in business. “The Art of the Deal” is all about how to make sure you win and the other guys lose. That’s what business is all about, right? WRONG!
The best business is done under win-win, or win-win-win conditions, where everyone gets a portion of what they want, enough to fulfill their needs and meet their ultimate goals, but not everything they may have wanted. But when you are dealing with arrogant people, that all breaks down. Arrogant people think they get it all and don’t really need any help, or only need the help of a close-knit group with limited skills. Worse, they surround themselves with “yes men” and get no critical feedback at all. Whatever the case, you may have a great skill set, but it is the rare person who understands all aspects required for the long-term success of their business.
There are ample examples of what I am talking about.
Let’s start with my favorite case of pure arrogance, Elizabeth Holmes (https://en.wikipedia.org/wiki/Elizabeth_Holmes) and Theranos. If you don’t know her story, in a nutshell she sold people on a fake concept that was a lie, including the investment wizard Warren Buffet, the family of Besty Devos (our current Secretary of Education), and Walgreens. How? Her pure confidence in what she was saying allowed her to ignore reality and sell her “product” based on her belief it worked. She surrounded herself with people who believed in Elizabeth and that somewhere in the chain of events what she was saying was actually happening. The product, blood testing with a drop of blood, worked just enough to make serious people believe in her, but when she put it into practice, she cheated the work and results. In the process she raised hundreds of millions of dollars, never made a single penny, bankrupted her company and got banned from practicing in her industry. She may yet wind up in jail, along with some of her partners. And those investors? They lost around 90% of their investments.
Travis Kalanick (https://en.wikipedia.org/wiki/Travis_Kalanick) one of the founders of Uber created an environment that was so toxic the entire leadership team came to thumb their noses at government regulators, employees (including women claiming sexual harassment), and investors. While they recently went public with an IPO, they have not made a profit yet and have no profit in sight. They are burning through cash at almost $1 billion…yes that is a “B”… a quarter and investors are wearying of their “story”. How did they get this far and attract so many investors? Pure arrogance and lies, or at least misleading statements that were not backed by sound theory or research/facts.
The thing both Holmes and Kalanick have in common is energy, enough technical knowledge to be dangerous and being great smooth talkers who came across as very convincing (being good looking people didn’t hurt either). So much so really smart people did not do their proper due diligence before believing what they were being told. Data was manipulated and/or a toxic environment pervaded throughout the organization in the belief that the leader was right so thorough due diligence was made more difficult.
I can go on, how about Elan Musk and Tesla/Solar City? As with Uber they have not made a profit for more than a single quarter (twice) and are burning through huge sums of money on a regular basis. All the while Elan thumbs his nose at the Securities and Exchange Commission. Are we learning that Mark Zuckerberg is letting arrogance get in his way over at Facebook? What is my point? Arrogance did well for these people, at least in the short term. In the end, however, it is ultimately what is bringing these businesses down. Time will tell how history remembers these people.
I once started working with a brilliant ASU student who had what seemed like an incredible concept utilizing microfluidic chips to measure blood. I agreed to join his board of directors and we started moving forward building out a business plan we could sell to investors. Very early I noticed that while he listened to input from the board, nothing much changed. I like asking questions when I don’t understand something and often play the devil’s advocate until we have answers we all agree make sense. But when I suggested we should have a doctor on board advising us, for many reasons, I got shot down. When I kept raising issues that I thought a doctor would raise, I was told by the founder that he wasn’t looking for problems, just solutions to getting funded.
That afternoon I resigned and asked that my name be taken off the venture website as an advisor. I saw where this was going…his way or the highway. I was not willing to put my reputation, nor my business and investments, at risk for this guy. He never launched his business, they figured out many of the issues that I raised were valid. When I left, I felt that I could have potentially made a lot of money with this founder, but I also thought I could wind up much like Warren Buffet and Theranos, too.
My real point of all this is that if you are working at a company where arrogance pervades, beware. If you lead a company full of arrogance, especially if it starts with you, beware. While you may gain a high level of success in the short term, like all of the examples I have outlined above, it does not guarantee long-term success, growth and real value. In my next blog I will outline the value issue as it’s being played out in real life right now. Just see Uber’s IPO results, or Lyft, or……
Your challenge this month is to take a serious look at the arrogance within your company/life. If it is you, take a serious look at reality and the long term, it will not only humble you, but help you succeed. An alcoholic must admit they are one before they can change. If you are arrogant and don’t know/admit it, you will always be arrogant. I think many arrogant people are smart enough to know it, but their ego gets in the way of admitting it and changing. Is that you? If so, start changing today.
Mitchell Bolnick – The Excel Consulting Group