Hubris: The Leader and Business Killer. How Can You Avoid This Fate?
“We own this business.”
“We are the leader, and no one is going to catch us.”
“We are the best.”
Do any of these sound familiar? Perhaps you have said them to fire up your team. Or maybe you hear other senior executives speaking strategically about ‘owning’ a category, or certain segment of a business. These are examples of potential hubris. And they can be the beginning of the end for a leader or the business as a whole.
Circuit City was flying high in the 1980s and early 90s. They believed they had the secret sauce to consumer electronics. They had nice showrooms, experienced sales people, and an attractive selection of product that their customers wanted. Additionally, they believed they were too big to fail and that people would continue to shop them for their name and not what made them successful in the first place. Despite gains from Best Buy, and more retailers selling similar products (Home Depot and Lowes got into the appliance business), and everyone selling TVs. Suddenly, Circuit City didn’t have a unique selection of products. Then, they eliminated applicances from their stores and changed their staffing model away from professional sales people, who were extremely knowledgeable about their products. It didn’t take long after those changes that the company failed and closed all their stores.
What is hubris?
From Webster’s Dictionary:
Hubris: exaggerated pride or self-confidence
Expanding on that definition and applying it to a business environment, here is Infopedia’s definition:
Hubris is the characteristic of excessive confidence or arrogance, which leads a person to believe that they may do no wrong. The overwhelming pride caused by hubris is often considered a flaw in character.
In the financial world, hubris is considered a dangerous quality that emboldens an investment professional to take risks beyond what is appropriate for their situation. While such risks may pay off at times, any person who shows such behavioral flaws can easily find their gains erased by dramatic losses.
Hubris can cause short-sighted, irrational, or harmful behavior since the person does not stop to examine their behavior or consider the opinions of or effects on others when behaving. Hubris often causes humiliation to whom it is directed. 1
Perhaps one of the best examples of hubris is the well-known fable of the Tortoise and the Hare. The hare believed he was the best, he couldn’t be beat. He was the fastest, hands down. In the race, he was so overly confident, he decided he could take a nap and still win the race. Of course, we know how the story ends, and we reference, ‘slow and steady wins the race’ to this day.
In the Entrepreneur.com article, Hubris Kills Businesses. Humility Saves Them, the authors reference a story from the Koch Family business (one of the most successful private firms in history) where the elder Koch tells his son that he hopes his first big deal fails. The lesson here is that you need to know that you will not win them all and that you are not invincible.
Just the opposite
Recently, I wrote about how The Best Leaders Practice Humility. As leaders go, so do their businesses. A company by itself cannot act with hubris, it can only act as it people do. That is culture. Humility is the opposite of hubris and the cure for it when hubris begins to take hold. Practicing humility is the equivalent to slow and steady winning the race from the tortoise and the hare story.
What hubris might look like
Building on some examples in the first paragraph of this article, there are signs that you and your company are falling into a hubris trap. Whenever you say or hear that you ‘own’ a business, that is a telltale warning sign. It has been proven over and over, in business, that no one company ‘owns’ any segment or category indefinitely. Ask Sears. In the middle part of the last century, Sears likely talked about owning customers, the hardware business, and appliances. They had great brands — Craftsman tools, Kenmore appliances, among others. Their stores were in all the best locations across the country. They had hundreds of stores, even thousands, when they merged with KMart (another example of hubris and failure). Today, Sears barely exists, with only three stores remaining as of this writing.
There are countless others hubris examples of business who once believed they were too big to fail, even the largest business in their industry (as Sears was – it was once the largest retailer in the world). A&P Grocery is another example, one that continued to believe it until they no longer had any stores left.
The words we speak can often lead to the actions and mindsets we live. While saying ‘we are the best’ or ‘we own this business’ is likely just prideful talk to excite the team, when that belief sets in, and others believe it, bad things begin to happen. The last three years have proven that the customer will always determine what is best for them. They are willing to try to companies, new products, and new services. Customers expect evolution and improvement. They are not interested in your boastful claims if you cannot live up to them in their eyes. Only the customer determines ‘who is best’ and I promise that no customers will say they are ‘owned’ by any business, certainly not permanently.
Steps to avoid hubris
1. Humility Not only is humility good form, it is the antidote to hubris. You must have a company culture that practices humility. Humility does not mean you cannot take pride in your business. It simply means you recognize that you need to continue to grow, evolve, and meet (or beat) your customers to where they want to go.
Walmart is an example of recognizing that they would have to change. In the 90s and early 2000s, Walmart was hands down the world's largest retailer. Suddenly, Amazon began to catch up and make a significant dent in who Walmart was. To Walmart’s credit, they have made adjustments to their business and matched, and even exceeded, some of what Amazon was using to take market share from them. Today you see Walmart continue to offer new options for their customers to do business with them in stores, and online.
2. Continue to Learn Whether thinking of this as an individual or company, you must continue to educate yourself on new ideas and bring that innovation to life for your employees and customers.
3. Admit Failures We all make mistakes. It is a process of learning. Allow others to see those missteps and show what you are doing to recover from them. There are many very successful, long-term companies that have stumbled along the way. In fact, Walmart has those in their history as well. Their 2016 acquisition of Jet.com is in many ways seen as a failure (the business shut down in 2020). Yet, it is also credited with the foundation and kickstart to what we know as Walmart.com today, which rivals, and even exceeds Amazon in many ways.
4. Stay Grounded As a leader, you need people around you that will tell you when you are allowing hubris to enter into your routines. Maintain a view of your horizon to ensure you are not getting too far away from that level platform that allows you to see the entire landscape around you. This is the only way to ensure that you can continue to push forward in the direction you need for success. It can be easy to believe that even earned victories will continue with no additional effort. There are few, if any examples, in time that would indicate that once successful, always successful (without growth) holds true. Keep your feet on the ground, your eyes open, and your mind growing to identify new ideas, ways of doing things, and learning from others.
Slow and steady sounds boring. We all want to be the hare, in that we feel good about ourselves, we believe we can win, and have confidence in our future. However, when those tip to something more than confidence backed up by action, we may find ourselves taking a nap, only to wake up as our competition is passing us to take the lead and likely win the race. Don’t let hubris define who you or your business is if you want to build long-term success.
How do you avoid falling into the hubris trap?
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Photo by Ariel on Unsplash
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