Mindset: The New Psychology of Success

Finally, as with Enron, the geniuses refused to look at their deficiencies. Says Collins: The good-to-great Kroger grocery chain looked bravely at the danger signs in the 1970s—signs that the old-fashioned grocery store was becoming extinct. Meanwhile, its counterpart, A&P, once the largest retailing organization in the world, shut its eyes. For example, when A&P opened a new kind of store, a superstore, and it seemed to be more successful than the old kind, they closed it down. It was not what they wanted to hear. In contrast, Kroger eliminated or changed every single store that did not fit the new superstore model and by the end of the 1990s it had become the number one grocery chain in the country.

CEOs and the Big Ego

How did CEO and gargantuan ego become synonymous? If it’s the more self-effacing growth-minded people who are the true shepherds of industry, why are so many companies out looking for larger-than-life leaders—even when these leaders may in the end be more committed to themselves than to the company?

Blame Iacocca. According to James Surowiecki, writing in Slate

, Iacocca’s rise to prominence was a turning point for American business. Before him, the days of tycoons and moguls seemed long past. In the public’s mind, CEO meant “a buttoned-down organization man, well-treated and well-paid, but essentially bland and characterless.” With Iacocca, all of that changed. Business journalists began dubbing executives “the next J. P. Morgan” or “the next Henry Ford.” And fixed-mindset executives started vying for those labels.

Surowiecki even traces the recent corporate scandals to this change, for as the trend continued, CEOs became superheroes. But the people who preen their egos and look for the next self-image boost are not the same people who foster long-term corporate health.

Maybe Iacocca is just a charismatic guy who, like rock and roll, is being blamed for the demise of civilization. Is that fair? Let’s look at him more closely. And let’s look at some other fixed-mindset CEOs: Albert Dunlap of Scott Paper and Sunbeam; Jerry Levin and Steve Case of AOL Time Warner; and Kenneth Lay and Jeffrey Skilling of Enron.

You’ll see they all start with the belief that some people are superior; they all have the need to prove and display their superiority; they all use their subordinates to feed this need, rather than fostering the development of their workers; and they all end by sacrificing their companies to this need. The fixed mindset helps us understand where gargantuan egos come from, how they operate, and why they become self-defeating.

FIXED-MINDSET LEADERS IN ACTION

Iacocca: I’m a Hero

Warren Bennis, the leadership guru, studied the world’s greatest corporate leaders. These great leaders said they didn’t set out to be leaders. They’d had no interest in proving themselves. They just did what they loved—with tremendous drive and enthusiasm—and it led where it led.

Iacocca wasn’t like that. Yes, he loved the car business, but more than anything he yearned to be a muckamuck at Ford. He craved the approval of Henry Ford II and the royal trappings of office. These were the things he could measure himself by, the things that would prove he was somebody. I use the term royal with good reason. Iacocca tells us the Glass House, Ford corporate headquarters, was a palace and Henry Ford was the king. What’s more, “If Henry was king, I was the crown prince.” “I was His Majesty’s special protégé.” “All of us … lived the good life in the royal court. We were part of something beyond first class—royal class.… White coated waiters were on call throughout the day, and we all ate lunch together in the executive dining room … Dover sole was flown over from England on a daily basis.”

Iacocca achieved great things at Ford, like nurturing and promoting the Ford Mustang, and he dreamed of succeeding Henry Ford as the CEO of the company. But Henry Ford had other ideas and, much to Iacocca’s shock and rage, he eventually forced Iacocca out. It’s interesting that Iacocca was shocked and that he harbored an enduring rage against Henry Ford. After all, he had seen Henry Ford fire top people, and he, Iacocca, had used the ax quite liberally on others. He knew the corporate game. Yet his fixed mindset clouded his vision: “I had always clung to the idea that I was different, that somehow I was smarter or luckier than the rest. I didn’t think it would ever happen to me.” (Italics added.)