Today’s offering includes three fascinating examples of lousy leadership at work, two explanations of the worst traits of lousy leadership and a review of a remedial book for lousy leaders.

The first example of lousy leadership is personally embarrassing, not because it’s about me, but because in January 2008 and again in April I lauded this lousy leader for creating a great culture. Little did I know. The lousy leader is Sam Zell and his hand-picked executive Randy Michaels, now CEO, created a culture that rivals or exceeds anything you’ve heard about on Wall Street.

Randy Michaels, a new top executive, ran into several other senior colleagues at the InterContinental Hotel… After Mr. Michaels arrived, according to two people at the bar that night, he sat down and said, “watch this,” and offered the waitress $100 to show him her breasts.

And it went downhill from there.

Next we have a pair of lousy leader brothers, Sam and Charles Wyly, who have avoided paying taxes on hundreds of millions of dollars by using trusts and tax haven-based shell corporations. And these two Texas swashbucklers are sure that the upcoming election will see an end to their problems.

“I think it’s good politics to beat up on big companies and rich people,” said Sam Wyly. Soon, he said, “the election will be over, and this will be forgotten about, or lost, be shut down, be gone, will be nothing.”

The third is Goldman Sachs, a company stuffed with lots of lousy leaders. Not another article, but a recommendation to watch CNBC’s Goldman Sachs: Power and Peril when it repeats October 26 at 8pm ET in case you missed it last Sunday.

Greed is a constant hallmark of lousy leaders. According to Andrew Lo, an MIT professor who researches the relationship between neuroscience and economics, greed actually has a chemical basis.

“When a person acquires resources, chemicals are released in the brain that cause the sensation of pleasure. Greed is simply the addiction to that release.”

Can corporate culture turn good leaders into lousy leaders?

Organizations have more power to direct employee ethical behavior of than we previously knew.

That’s the bottom line of new research from the University of Washington Foster School of Business that demonstrates, for the first time, the relationship between moral intuition—a reflexive perception of what is right and wrong—and moral behavior.

Finally, the perfect gift for lousy leaders—a copy of Marshall Goldsmith’s new book, Mojo: How to Get It, How to Keep It, and How to Get It Back If You Lose It

Flickr image credit: http://www.flickr.com/photos/pedroelcarvalho/2812091311/

Reading a review of David Sarna’s History of Greed got me to thinking, especially the end when you learn that Sarna himself was greedy.

History of Greed‘s book jacket neglects to mention that he pleaded guilty in 2006 to conspiring to commit securities fraud and served nine months in jail. Had the author interviewed himself, he might have gained valuable insight into what sparks already wealthy people to take risks—even illegal ones—to enhance their coffers. When I asked Sarna why he omitted such a significant biographical detail, he confessed that his wife asked him to.

There’s been a lot written, especially over the last two decades, about greed, mostly centered on money and wealth, but that only tells a small part of the greed story.

Greed is defined as “excessive or rapacious desire, esp. for wealth or possessions,” but another source mentions food.

Greed can apply to anything—take it far enough and it becomes addiction.

Greed applies not just to tangibles, but to intangibles—think power.

But there are more subtle and surprising things than money and power that can lead people down the path to bad behavior.

Promotion; religion; empathy; leading; hobbies; sports (real and fantasy); working out; TV; books; friends, fans and followers; music; love; respect; the list is endless.

First we want, then desire, then crave; craving grows and we become greedy for more—always more. No matter how much we have it’s never enough.

Greed will eat us alive and if we do nothing it can destroy what we care about.

What do you crave that could lead to greed? What do you do about it?

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Enron is back in the news because Jeff Skilling’s appeal is currently in front of the Supreme Court (his sentence may be reduced or overturned on a technicality).

Arthur I. Cyr, Clausen Distinguished Professor at Carthage College, offers an interesting commentary on Skilling, the Enron debacle and Arthur Andersen.

Leadership personality is telling in any organization. Skilling from early days as a McKinsey consultant was notorious for an exceptionally aggressive, grasping style. Business author and former colleague Tom Peters described him as apparently able to “out-argue God.”

The damage that attitude causes knows no bounds and holds true wherever it is found.

Enron, stock option backdating and finally the derivatives of the financial meltdown are all from the same seeds.

In hindsight, Enron’s death was symptomatic of growing global problems. In an age of great prosperity and exceptionally cheap credit, people fairly easily could put greed before good judgment.

Greed before good judgment says a lot, but not quite all.

Even when greed isn’t the driving force there is ideology—an inflexible force that proponents claim eliminates the need for any judgment at all.

Good management, however, requires flexible, insightful human strengths. Regulation and law enforcement only provide context.

Cyr’s final comment sums up the true solution as well as the why rules and even laws don’t work.

Image credit: Svadilfari on flickr

Image credit: See-ming Lee on flickr

Yesterday was Bosses Day and in honor of that I’m going to share some information on bosses—BIG bosses.

These days’ people are incensed with executive pay packages on and off Wall Street.

For years there has been much talk about pay for performance, but I haven’t seen any strong connection—have you?

And certainly not this year.

But the recession doesn’t seem to have slowed down CEO compensation at all and I’m not even referring to Wall Street.

You’ve probably never even heard of the 5 most highly compensated CEOs, unless you are unfortunate enough to own the stock or work or been laid off from the companies. The 5 are Eugene Isenberg, chief of Nabors Industries, Michael Jeffries of Abercrombie & Fitch, Brian Roberts  of Comcast, John Faraci of International Paper and James Stewart of BJ Services. Ugh.

By now you all know that those poor mistreated boys and girls at what used to be Merrill Lynch are getting their bonuses, perhaps if they get over their embarrassment they will start spending and give the economy a real boost.

And then there’s Ken Lewis, the beloved CEO of B of A—the bank we love to hate.

You probably read that Kenny is “stepping down” and has agreed (under duress) to forego his 2009 salary and bonus and repay a whole million dollars. In case you were actually impressed with this, please note that he will walk away with a $53 million pension plan.

That’s on top of everything he’s made (I refuse to say earned) previously.

The NY Times had an interesting article that explains that Lewis isn’t incompetent, he just can’t lead. But from where I sit by the time anyone makes it to the corner office of a corporation the size of Bank of America should be able to do it all.

A few months ago CEO magazine published Why Smart Chief Executives Make Dumb Decisions; perhaps they should a copy to all the CEOs mentioned in the articles to which I’ve linked.

It probably wouldn’t help, those guys are so smart they don’t need any outside input that doesn’t agree what they think—just ask them.

In closing today, be sure to read Phil Gerbyshak’s description of the boss anyone would kill to have at Slacker Manager.

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Now check out this great cultural goal

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Here lies Wall Street’s short-term thinking
That trashed our lives without blinking
Ethics and honesty it disrespected
Let’s hope it’s never resurrected!

Are you part of the problem?

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(Hat tip to Phil Gerbyshak for leading me to the generators)

Greed is certainly in the news these days, from stories about it to tirades against it, so it seemed like a good time to offer up a few you may not have seen recently.

“Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction.” –Erich Fromm (Hello John Thain and friends, I think Erich is talking to you.)

“It always seemed strange to me that the things we admire in men, kindness and generosity, openness, honesty, understanding and feeling are the concomitants of failure in our system. And those traits we detest, sharpness, greed, aquisitiveness, meanness, egotism and self-interest are the traits of success. And while men admire the quality of the first, they love the produce of the second.” –John Steinbeck (This is so true it makes you want to weep.)

“To make a business decision, you don’t need much philosophy; all you need is greed, and maybe a little knowledge of how the game works.” –Bill Watterson (After listening to all the rationalizations and excuses for what’s happened this is the first thing that makes sense.

Finally, to round this out I’m adding something I said during a conversation. I can’t remember having read it, but I doubt it’s really original.

“Greed is the driving force in the pursuit of many things besides money.” Me

What about you? Any thoughts on greed—your own or someone else’s?

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Greed, like water, just keeps flowing along, flooding the land and leaving destruction and misery in it’s wake. The current flood, which dwarfs Katrina, makes greed a timely subject for our quotes today.

“Laissez-faire, Supply-and-demand, – one begins to be weary of all that. Leave all to egoism, to ravenous greed of money, of pleasure, of applause: it is the Gospel of Despair!” –Thomas Carlyle (Said way back in the 1800s, seems nothing has changed—not encouraging.)

“It always seemed strange to me that the things we admire in men, kindness and generosity, openness, honesty, understanding and feeling are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest are the traits of success. And while men admire the quality of the first, they love the produce of the second.” –John Steinbeck (Good grief! You don’t confuse talk with actions, do you?)

“New York City is a great monument to the power of money and greed… a race for rent.” –Frank Lloyd Wright (Definitely living up to it’s reputation!)

“If we go on the way we have, the fault is our greed [and] if we are not willing [to change], we will disappear from the face of the globe, to be replaced by the insect.” –Jacques Cousteau (Long hail the mighty cockroach [see above].)

“No drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power.” –P. J. O’Rourke (Whoever invents the test will wind up the richest person in the world without any need to be greedy!)

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Stephen Covey says, “We simply assume that the way we see things is the way they really are or the way they should be. And our attitudes and behaviors grow out of these assumptions.”And we, the people, did assume.

We, the people, assumed that the visions presented by the leaders on and off Wall Street were true.

We, the people, assumed that all those experts were correct when they lauded the Wall Street crowd.

We trusted them, even though it’s not the first time that the Wizards of Wall Street broke our hearts—and our economy.

Last year when I wrote about CEO pay I said, “If little girls are made of ‘sugar and spice and everything nice’ and little boys are made of ‘snakes and snails, and puppy dog tails’, then these CEOs are made of ego and greed and the skill to mislead.”

We, the people, have a short attention span and we’re lazy.

It’s so much easier to listen to the experts and then blame them when things don’t work out. Less painful than looking in the mirror and taking responsibility for our own contributions as passive followers.

But why should we? Our leaders take no responsibility.

President Bush pats us on the head, says he knows things are difficult, but doesn’t take responsibility.

Alan Greenspan, a great believer in deregulation, still thinks derivatives are good and puts the blame on the leaders who, he says, got greedy.

Whereas five years ago Warren Buffett called them “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

But it’s so much easier, not to meniton comfortable, to listen to the experts who say everything is fine than to the experts sounding a warning.

Our leaders may have led us down the garden path, but we, the people, were happy to follow—being careful to keep our rose-colored glasses intact and firmly in place.

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