Divinity vs Diversity in our Leaders Destroys Shareholder Value.
Culture or Cult?
WeWork always seemed like more of a cult than a company to me. Adam Neuman seemed to epitomise all that was going wrong with the “visionary” and “inspiring” ‘Founder as Messiah’ Leader Syndrome that was held up to be the pinnacle we should all aspire to, especially any self-respecting wannabe entrepreneur!
And he’s still delusional: “It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganisation will enable WeWork to emerge successfully.”
So how’s that working for you now Adam? The ability to slither away from responsibility is breathtaking. Admit you had a modestly good idea which may have been modestly successful if you had focused on what every leader should actually focus on – building a business model that can make money sustainably!
As most of you know, in 2019 and privately valued at US$47 billion WeWork planned an IPO with an all-male board of directors. At the time every S&P500 company had at least one female director on its board because having a more-diverse board is known to be an avenue toward better shareholder returns. The most senior female executive at WeWork was Adam’s wife, Rebekah. Enough said.
Adam Neumann served as chairman of the board, which included 6 other respected directors, including from major investor Softbank. Tellingly, the company had a triple-class share structure and would therefore have been be a controlled company had the IPO been successful. This structure would have made it difficult for an outside investor to wage a proxy contest that would alter the makeup of the board (it’s much easier to make decisions when everyone thinks the same).
We all know the history from there, the IPO failed to even get off the ground – it was the beginning of the end of the great delusion.
While I’ve used Adan Neumann and WeWork as an example, the ‘Founder as Messiah’ Leader Syndrome is nothing new. During the nineties dot-com boom we witnessed the emergence of “the superstar CEOs—the grandiose, actively self-promoting, and genuinely narcissistic leaders who dominated the covers of business magazines.”
Diversity or Divinity of Opinion?
Research shows that narcissistic leaders tend to develop corporate cultures that have lower levels of integrity and collaboration, and that this tends to play out in the actions of employees. They are also more likely to lie, cheat, and steal.
As a serial entrepreneur and business director I take my responsibilities seriously. That is to lead a business that turns sufficient profit to keep great people employed through economic cycles, delivers appropriate returns to shareholders, is well-governed and ethical in all its dealings and attempts wherever possible to do no harm to our planet.
This to me is the essence of the outcomes we should hold our leaders and directors accountable to. It seems it was not just Adam Neuman who lost touch with the fundamentals (if indeed he ever grasped them at all) at WeWork, but the entire executive and board of directors.
Narcissistic leaders aren’t all bad – we look to productive narcissists such as George Soros, Jack Welch and Steve Jobs in times of huge disruption and transition precisely because they have the audacity and charm to push through the massive transformations that society needs to leap forward. The danger is that narcissism can turn unproductive when, lacking self-knowledge and restraining anchors, leaders see themselves as Founder-Messiah’s and become unrealistic dreamers or destructive dictators.
The charmingly seductive vision of the ‘Founder as Messiah’ Leader Syndrome is natural fuel for social media and the leaders’ halo (at least initially) shines on those closest to them. Under these circumstances incredible success seems inevitable. This is why diversity in the c-suite and the boardroom is critical in all its myriad forms, Independent directors need to constructively poke holes in narcissistic bubbles, question delusional groupthink and remind people of their director responsibilities to all stakeholders, not just to themselves.
