The Agony of Executive Failure

DURING the expansive 1960s, executive promotions came soon and often in a long list of fast-growing U.S. companies. But all too frequently the rising members of the executive suite were hard put to handle their new assignments. "A boom market," says Pittsburgh Executive Recruiter Richard MacQuown, "can camouflage anything, including incompetence." Now business is slowing down, and the camouflage is harder to keep up. Corporate chiefs increasingly must face the agonizing task of reinvigorating or dismissing failing executives.

The problem is surfacing in some of the biggest corporations. Yet the causes and cures of executive failure often baffle top managers. They are turning to behavioral scientists, who have classified at least three types of failing executives: >The Early Flameout. Dr. Herbert Klemme, a psychiatrist at the Menninger Foundation, has found that many men go through a "midlife crisis" at about age 35. Just around then, says Klemme, a man often faces the jolting realization that he cannot accomplish all his early dreams, and, more important, begins to think seriously for the first time about the inevitability of death. Some flameouts simply sink into depression, others start to drink heavily. In any event, their work and their careers suffer. >The Climacteric Man. Executives in their late 40s or early 50s often begin to perform sloppily in jobs they did well for years. Boredom is one reason. Paul Armer, director of Stanford's computation center, explains another reason with his Paul Principle:* "Individuals often become incompetent at a level at which they once performed quite adequately." The executive may feel, rightly or wrongly, that he is undereducated, that he cannot keep up with the complexities of modern business and the talents of younger executives. Typical lament: "I'm too old to learn about this."

> The Indecisive Boss. This executive is so paralyzed by fear of making a mistake that he lets major problems pile up on his desk while he becomes preoccupied with trivia. Charles Bowen Jr., president of the management consulting firm of Booz, Allen & Hamilton, recalls that "one head of marketing for a large corporation spent his first six months almost totally concerned with the decorating of his office. There were things that needed his attention, but he could not face them."

The Empty-Box Ploy. Whatever the cause, the executive who is slipping often betrays himself by telltale signs. He will work long hours, nag his staff about petty details, or replace competent subordinates with yes men. Refusal to take a vacation is an almost certain symptom. Failures are terrified that their shortcomings will be discovered in their absence. Sometimes the failures resort to elaborate --and costly--ruses to cover their traces. In one TV-set manufacturing company, for example, a vice president could not meet his production goals and shipped empty boxes to distributors. When they complained, he insisted it had all been a mistake; by that time, he had managed to finish the sets.

Coping with obsolescent executives, says Wayne M. Hoffman, chairman of Flying Tiger Lines, is "the toughest job of top management." U.S. business often goes to extraordinary lengths to shield its failures. Next to early retirement with an extra-generous pension, the most common tactic is to move the failure to an impressive-sounding job that has no content. In fact, says Harvard Business Professor Abraham Zaleznik, he is "vice president of nothing." The man with a lofty title, a high salary and little to do may seem to be in an enviable position, but few enjoy it. "I have talked to many of them," says David Gleicher, a research executive at Arthur D. Little. "They are dying and they know it."

The Sternest Test. Much more intelligent--and effective--methods could be used. Menninger's Klemme believes that many early flameouts could be prevented by competent psychological counseling, which few companies offer. Older executives could be reinvigorated by sabbaticals or company-paid refresher courses in subjects that now frighten them (example: computer technology). They could be switched from jobs in which they are getting stale to different but important assignments. A shift need not be downgrading; on the average, a man in middle management today stays in his job only 18 months before moving on.

As a last resort, the most humane method may be simply to fire the man, with an honest explanation of the reason why. "Being fired," says Los Angeles Management Consultant Thomas J. Johnston, "is another part of the executive job"--and the ability to bounce back from dismissal is perhaps the sternest test of executive fiber.

-A corollary to Laurence Peter's "Peter Principle," which holds that employees advance through jobs at which they are competent until they are promoted to their level of incompetence.

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