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Good business, bad men


It is hard to revolutionise businesses without extraordinary confidence in your own rightness. This ruthless drive can also turn into an ugly trait.

Great men are almost always bad men. " This particular quote of Lord Acton's might not be as famous as his "Power tends to corrupt, and absolute power corrupts absolutely" but it throws light on a topic that's increasingly coming under the public radar: the dark side of highly successful business tycoons.

The hagiography of immensely successful business leaders until recently was tightly controlled by the subject. Protected by well-oiled PR machines and lionised by the media and even the public in the era when capitalism thunderously trumped socialism, CEO-as-the-star was the expected narrative. They were rarely subjected to the intense scrutiny that politicians routinely endure.
Today, there's a change in the mood. As the Economist said, there's more focus on "forces" and "factors" and less on hero worship. And the changed world reality has much to do with it. While we are not exactly in the post-capitalist era, there's an expectation that companies be profit plus, that men charged with running large enterprises be put under the microscope, be accountable. Unsurprisingly, the results have been less than flattering for many a corporate chieftain.

Stormannsgalskap, the Norwegian word that means "madness of great men", is a topic that's currently hot. The imprisoned former press baron, Conrad Black, in an article called the reigning press baron Rupert Murdoch a "great bad man". Black's argument was that Murdoch had lowered journalistic standards but he had also transformed the media industry.

Examples of great business leaders who had ugly traits abound. The Economist cites other "bad" bosses: Henry Ford hated Jews. George Eastman sanctioned industrial espionage. Thomas Watson turned IBM into a personality cult. The ugly side of these entrepreneurs, it argues, is often just as important to their success as their admirable side. You cannot reshape an industry without extraordinary confidence in your own rightness.

One of the best examples is Apple founder Steve Jobs, who died in October. "He could be very, very mean to people at times, " said his biographer Walter Isaacson. "Whether it was to a waitress in a restaurant, or to a guy who had stayed up all night coding, he could really just go at them and say, 'You're doin' this all wrong. It's horrible. '

"And you'd say, 'Why did you do that? Why weren't you nicer?' And he'd say 'I really want to be with people who demand perfection. And this is who I am. ' And it was that demanding, petulant and super secretive person who had the drive, vision, focus and ambition to reshape industries ranging from personal computers to publishing.

The young Bill Gates, by most accounts, was a similar kind of nightmare, screaming at his staff and elbowing aggressively past rivals as he built Microsoft. Mark Zuckerberg, the founder of Facebook and the central character in the movie The Social Network, is not just portrayed as ambitious, but also as vengeful, vicious, duplicitous and devoid of even the most basic social skills.
Not that tycoons like to admit to their frailties. When asked about his faults, Teruo Asada of Marubeni said, "I must not have any, or I couldn't have become CEO, right?"

Professor Debashis Chatterjee, director of IIMKozhikode, says business leaders behave badly when they lose their sense of proportion. "A sense of hubris sets in. It's an elemental human predicament. When we have enormous power we don't know when we go over to the other side. A sense of infallibility sets in, " he says. More is being written on the topic because, as he says, the "community has access to information it never had before. "

The system is under greater scrutiny because people believe that the economic meltdown and the lingering after-effects were essentially triggered by the hubris of the fat cats in finance. People on the streets have been deeply affected by the actions of this tiny, powerful elite. The scale of corruption and the privatisation of public goods has led to the closer examination of people in corner offices.

The point's also made by Prof Leena Chatterjee, who teaches behavioral sciences at IIM-Calcutta. She says, "Unethical practices are getting in the news because people are more aware. People are getting caught out more often. Perhaps greed is more now as we live in a highly consumerist, materialistic society. "

Former McKinsey chief Rajat Gupta is almost a textbook case. A man who was once the ultimate Indian middle class' wet dream - IIT, IIM, Harvard, the first Indian to head a global marquee firm like Mckinsey - is today pilloried for falling prey to 'billionaire envy'. He allegedly offered inside information to his powerful, billionaire friend, Galleon hedge fund founder Raj Rajaratnam, for no particular overt benefit. "What we do not teach in IITs, IIMs and Harvard is to contain greed, " says Debashis Chatterjee.

In India, there have been plenty of instances of brilliant entrepreneurs with unseemly sides to them. Those who had scant regard for rules that had been set by people who knew zilch about business. Who broke them with impunity and were later lionised for it but the fact remains that they bent them to get ahead. It was the Satyam Computers episode in 2008 that brought corporate governance to the front pages of Indian newspapers. Why would a shy, successful and immensely rich man like Ramalinga Raju deliberately cook up non-existent revenues and profits for years until the whole thing blew up in his face? It's a mystery till today.
Leena Chatterjee says, "As you go up the ladder, the opportunity for authentic feedback diminishes. Getting in touch with the inner self for areas of improvement becomes difficult. Within a company, a leader becomes all powerful. Maybe a sense of righteousness sets in, making the person believe that he/she can do whatever he/she wants. "

While there have been businessmen with bad sides to them for as long as there's been commerce, it's the sheer scale of wealth and the quickness with which it can be accumulated in the current era that stands out as perhaps the main reason for the behavioural lapses of storied business chiefs. "Wealth has risen dramatically. Businesses span the earth. Wealth which took decades to create earlier can be had in a matter of years. Zuckerberg is a billionaire before 30. There's a huge compression. It doesn't allow people to mature. The assumption that anyone who becomes successful will have a self-correcting mechanism is too much to expect, " says Debashish Chatterjee.

The best insight into why many great business leaders have nasty edges to them comes from Jobs' wife Laurene Powell. "Like many great men whose gifts are extraordinary, he's not extraordinary in every realm."

Reader's opinion (2)

N Teja ReddyJan 30th, 2012 at 11:12 AM

excellent article...

Vijay SakalkarJan 30th, 2012 at 09:54 AM

In India top business houses and their CEO's and owners are the main source of political corruption and they take pride that they have managed the minister so easily. they do not have any morality and for business they can go to any extent. Compared to them American and European business houses are

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