Believing Your Own Bullsh!t: The Emperor’s New Clothes

Episode #143 Believing Your Own Bullsh!t: The Emperor’s New Clothes

I had a conversation a few weeks ago at a social event with a senior partner for one of the big four consulting firms. The woman I’m talking about is a fantastic person. She’s intelligent, well-rounded and erudite. I don’t know her well, but she seems to have a good heart and she certainly has a good sense of humour. We invariably got onto the topic of leadership. Although I don’t want to go into the conversation in detail, suffice to say that I walked away with further confirmation of something I’ve always known. Some companies have turned the concept of believing your own bullshit into an art form.

I’m reluctant to make a rash generalisation, but there’s a fairly widespread view that the big brand consulting firms have a real dearth of leadership capability. Plenty of smarts, great sales machines, excellent processes, but leadership? They say plumbers houses have the leakiest pipes, right? When any large company runs a leadership program, it’s easy for those at the top of the firm to convince themselves that things are improving. That what they’re doing is making a difference to the organisation’s leadership capability and performance.

But I have to say in all my years of being exposed to corporate leadership programs, the most common outcome I see is the short-term sugar hit of motivation for individuals for just a fleeting moment before they fall back into their old habits.

This topic is fundamental to being able to grow as a leader, to understand the traps that you could fall into.

The Emperor’s New Clothes is a fairy tale written by Hans Christian Anderson. It tells the story of a vain emperor, who’s conned by two charlatans passing through his city. They pretend to be master tailors, who claim to have a magical cloth, which is invisible to anyone who is stupid or ignorant.

Of course, no one wants to appear as though they can’t see the fabrics, as they then are judged to be stupid. So even though no one can see it, no one owns up to that fact, including the emperor. He gets dressed in these magical robes, not confessing to his own inability to see them, and he holds a procession in front of the whole city.

No one dares to say that they can’t see the clothes because they don’t want to appear ignorant. Although they see the emperor in his underwear, the pretence is perpetuated. Only one little boy, in complete innocence, calls out. “Dude, you’ve got no clothes on”.

However, because he was only a young boy, and because he was a lone voice among people viewing the spectacle, the emperor carried on regardless. The emperor believed his own bullshit, and no one around him tried to convince him otherwise. Where were his trusted advisors? It’s not unusual for someone to believe that something isn’t true, but surely the people around them would let them know. Right? Well, not really.

Just like the fairytale, people don’t want to share that their leader is delusional, for many reasons. Most obviously, repercussions. If I say something negative about you, or point out your flaws, my career prospects might suffer, especially if you’re my boss or a peer who can leverage my boss.

There’s also a basic level of politeness and protocol. Most of us are brought up with the principle firmly drummed into us that if you can’t say something nice, say nothing. This is certainly polite, but it’s just not very helpful, to anyone.

There’s also a level of conformance. We like to play the game, and this is a cultural thing. We go along with stuff because that’s the way we do things around here. No one speaks up about the blindingly obvious flaws in our approach. No one’s prepared to talk about the elephant in the room. We take our cues, from the top. So when the CEO comes in and says, “I was reading an article in psychology today about the calming effects of the colour green. I’ve decided we’re going to paint all the interior walls of our office green”.

Instead of saying, “Mate, that is the most ridiculous thing I’ve ever heard. Do you want to think about that for a few minutes before we piss that money away?” Most people are more likely to say, “That’s such a good idea, boss. I love the way you’re always on the leading edge of innovation”.

Unfortunately for me, I was the one who would go, “That is the dumbest thing I’ve heard this week. How can I stop this madness from sucking up our resources and attention?”. This didn’t always make me the most popular executive in the room. Trust me.

The psychology of senior leaders

What are the drivers that make it so easy for them to be prone to believing their own bullshit?

I think there are several psychological factors at play. We all want people to think that we are capable and competent. We want to seem as though we have the answers, both for the people on our team and the people above us. That’s why a whole industry of coaches have popped up to preach the virtues of transparency and fallibility.

Which is all well and good. But I actually believe that if you focus on any single attribute in isolation, you can really miss the point. Is fallibility a good trait for a leader to display? Well, maybe. Fallibility, when coupled with competence, is incredibly powerful. But fallibility, when coupled with incompetence, is disastrous. We all fear at some level that we may be incompetent in certain areas.

Showing the chinks in our armour is really hard. For most of us, admitting that we’re wrong is quite daunting. You actually have to be really strong to be comfortable doing that. It’s much easier just to believe your own bullshit and say, “I am a high performer. I do have all the right attributes”.

This leads me to another factor in this psychology of leaders, our old friend, The Dunning Kruger Effect. It’s named after the two psychologists who carried out some groundbreaking research a couple of decades ago. Their 1999 study was titled “Unskilled and Unaware of It”. It’s still my favourite title of all time for a research paper.

The study found that we tend to massively overestimate our own capabilities, performance, and impact and underestimate others. This comes through in people’s self-ratings, on everything from their academic ability to their competence in investing. A slew of studies since then show that over 80% of people, and sometimes as high as 93%, consider themselves to be above average.

Statistically, of course, this is impossible. The technical term for this phenomenon is an illusory superiority bias. In fact, it’s in many areas of a leader’s performance. Their overweight opinion of their own performance and ability leads to them believing their own bullshit.

Another feed into this leadership psychology is the lack of quality feedback. The problems caused by conflict aversion are self-perpetuating. If your boss isn’t comfortable giving you feedback and avoids any sort of clinical critique of what you’re doing, you could be forgiven for thinking that you’re doing everything fine. You tell yourself that you have no performance issues and that you are indeed a high performer. And no one ever corrects your misconception.

Finally, a key factor in leaders believing their own bullshit is that no one holds them to account for their performance lapses. This can give you a skewed impression of your performance and unless you’re really self-aware and introspective about what you do, it’s an easy trap to fall into. When things go wrong, excuses often flow the line and they’re accepted, even when it’s simply a case of the dog eating your homework.

As you can see, there’s a bunch of compelling, underlying, sometimes even deep-seated, psychological factors in every leader that pushes us to believe our own bullshit.

overcoming the ‘believing your own bullshit’ syndrome

Overcoming these psychological drivers can be really difficult. But, like most leadership disciplines, it requires self-awareness, a willingness to explore the possibility that you may not be everything your ego is telling you that you are, and a good measure of courage.

I really only have one tip. Always look at the outcomes.

Everything you do as a leader has to tie back to value creation. It’s your number one imperative and the reason you’re employed. As I like to say, “The value hasn’t been captured until you hear the sound of the coin dropping in the tin”, metaphorically speaking.

There are two key questions that help you with this. The first is that for anything you think you might want to claim as a victory, simply ask yourself, “What’s actually different?”

When you’ve made a decision to deploy your organisation’s resources, what was the outcome of that activity? Just to give you a hint, the outcome isn’t the activity itself. Remember, value isn’t purely a financial concept. As we know, value comes in many different shapes and sizes and forms.

Your job as a leader is to work out how value is defined in your context, your industry, your organisation, this point in time.

The second question, which you need to constantly ask of your people is, “What is your evidence for that?”

When someone claims to have done something wonderful or made a significant difference to the company, just ask them to elaborate. Don’t take it at face value. Enforce the discipline of making your people support any claims of success with data and facts.

Make sure they can describe exactly what has changed. They need to be able to show you the ‘coin in the tin’ and live by their claims.

“So you say you’ve saved $4.3 million in ongoing costs. That’s excellent. Next year’s op ex budget is going to be reduced by $4.3 million to recognise your good work”.

The value has to be captured. If it’s not, you’ll just believe your own bullshit. Put the measures in place. Trust the data.

Here are a few examples…

Quantifiable, dollarized, value creation is much easier to track than intangibles because at least there’s a set of objective facts to observe. Even then, there’s enormous potential for believing your own bullshit.

During my tenure, as Chief Executive of CS Energy, we increased our underlying earnings from $17 million to $441 million. That’s a compound annual growth rate of 125%. For those of you who are interested, this was the EBITDA line.

It was a good proxy for our cash performance. If I believe my own bullshit, I’d say that this feat ranks amongst the most impressive turnarounds, you’d be likely to see for a mature company, in a mature industry. But let’s face it, we had a pretty solid tailwind in the market. Wholesale prices rose significantly during that time, and that was a big factor in those results.

Sure, we did a bunch of great stuff, but the market forces magnified everything we did. I’ll be the first to tell you that there’s a lot of luck and timing in this CEO caper and anyone who tells you there isn’t, is full of shit.

Let’s get back to where we started, leadership development programs. What’s the outcome that you’d expect to achieve from a leadership development program? There could be many, and they aren’t always easily measurable.

Years ago at a large ASX listed company I was at, all leaders from frontline supervisors to senior managers were put through a company leadership program, as tends to happen in large corporates.

We call it “sheep-dipping” in Australia, because it’s a one size fits all, push them through like sheep without any consideration for an individual’s current capability or circumstance. The only success metric that the HR team reported on was the number of leaders trained. What a load of shit.

I would argue that almost no benefit or value came from that program, and they spent millions and millions of dollars on it.

A leader who believes their own bullshit will say, “I have raised the capability of leaders in my organisation. It’s been a very successful program.”

If you really wanted to work out if the leadership development program was valuable, measure the outcomes over time. Things like:

• Financial performance

• Operating efficiency

• Absenteeism

• Turnover, and

• Culture profiles

These unfold over time, not immediately. If you want to know if leadership is making a difference, measure these things and don’t declare victory too early. What’s actually different?

What’s your evidence for that? For anyone who participates in one of the Your CEO Mentor’s leadership programs, whether it’s individuals or corporate executive teams, we take a before and after shot to measure success.

It’s sort of like when you join a 12-week challenge at a gym. They take a photo on the first day of you looking flabby, and then a shot of the ripped Adonis that you have become only 12 short weeks later.

We like to measure the improvement in qualitative factors, such as:

• How do you rate your level of confidence as a leader

• How do you rate the current performance of your team

• How much influence do you think your leadership has on your team’s performance?

• How would you rate the strength and cohesiveness of your organization’s top team.

Now, it’s interesting to see the changes from start to finish in less than two months when we run our Leadership Beyond the Theory program.

But still, to really understand if the program has been successful, to really understand the individual impact, the only way to do it is to look at the longitudinal results of the teams and the leaders over time.

If culture doesn’t shift and performance doesn’t lift, you’d have to question the value of the investment. Actually, that was a bit soft. Let me put that another way. If the outcome for the leadership program isn’t a better performing team, you’ve just wasted a shitload of money and time because that’s all that really matters.

Let’s pull another example, safety.

When you’re trying to create a safer environment for your people. Now there’s a thing called the permit-to-work system. This is a critical system used in heavy industries to manage the isolation of energy and motion. It ensures that when you’re working on dangerous machinery, it’s been disabled appropriately so that it doesn’t pose a risk. But are you really making a difference when you do this? Tweaking systems and procedures is fine, but the value here, the sound of the coin, has to be one compelling result, fewer incidents, and injuries to your people.

So you can mess with the procedures and processes and systems until the cows come home. But if you don’t actually get that outcome, fewer injuries for your people, it’s been a waste of time. I know many people who believe their own bullshit and say, “We’ve made our operations safer”. Okay, I’ll bite. What’s actually different? And what’s your evidence for that?

I want to finish with my favourite, building high-performing teams.

I wish I had a dollar for everyone who’s told me that they’re a great leader who builds high-performing teams. It’s almost a given on a senior leader’s resume these days. But knowing how few high-performing teams are out there, I always challenge them. Why don’t you talk me through that? Most often, it seems to boil down to some very low performing indicators. The team all got on well. They collaborated with each other.

There was very little disagreement or dissent. Well, it’s really easy to create a team like that. It takes no work at all, and that’s certainly not a high performing team. High performing teams get results. High-performing teams challenge each other robustly, but respectfully. High-performing teams do not accept mediocrity from their peers. High-performing teams are driven to achieve. High-performing teams want to be the best, and they compare themselves only to the highest standards and benchmarks. High-performing teams outperform other teams objectively.

Now, clearly, it’s not for me to judge whether someone has done all the things they claim to have done, but for my own part, I choose to be sceptical about anything that I think I’ve done that looks like a successful outcome. I try to attribute awaiting for the contributions from various sources, including those outside of my control, to whatever the result is. This tends to keep me pretty honest.

I asked myself, “What has actually changed?”

In my last months at CS Energy, I remember saying to one of my trusted advisors, “This part of the business is no better than when I turned up here. We’ve completely failed to move it forward”.

He thought for a second, and he said, “Marty, you’ve just forgotten how bad it was when you arrived. In my view, it is night and day different”.

Well, I must say that made me feel a little better, but I’d rather be questioning the value of my own contribution than blissfully ignoring any data that doesn’t paint my efforts in the best light.

The trick to this is always being open to the possibility that it could be you in that street parade, wearing the magical garments. And you could find yourself to be just a little underdressed.