A Timely Lesson On ‘Hypnotic’ Hubris From Two Successful Leaders

The following is a guest piece by James Strock.

Elon Musk and Mark Zuckerberg have been feted as golden CEOs of early twenty-first-century business. Their respective companies, Tesla and Facebook, are renowned for their imagination and audacity.

In recent months, though, what seemed smooth sailing has encountered choppy waters.

Elon Musk’s Excellent Adventure

Seeming out of the blue, in late summer Musk announced on Twitter that he had secured funding for taking Tesla private. He subsequently backtracked, admitting that such negotiations were, at best, in a preliminary phase. Various concerns were raised. Was he violating securities regulation? Was he attempting to divert attention from mixed results on profitability and production?

Musk’s unforced error occurred amid other questionable moves. Following world attention and ultimate celebration of the daring rescue of a boys’ soccer team in Thailand who were trapped for days in a remote cave, the Tesla CEO piped up, naming one of the rescuers is a pedophile. Weeks later, Musk smoked cannabis during a broadcast interview with Joe Rogan.

A banquet of consequences was served up. The Securities and Exchange Commission fined Tesla, as well as Musk individually. The CEO agreed to relinquish the post of chairman on the board and acceded to the appointment of two additional independent board members. A new committee of directors was tasked with overseeing Musk’s communications.

Tesla’s stock value gyrated wildly. The widely-granted benefit of the doubt accorded Musk has been qualified if not altogether revoked.

Zuckerberg Agonistes

Like Musk, Mark Zuckerberg has long claimed a special status, exempt from the customary rules of corporate conduct. The Facebook founder proclaimed a “special mission” of connecting the world as a means of achieving new heights of human potential.

Recent revelations exposed a more common pattern of corporate malfeasance. Zuckerberg, along with Facebook’s high-profile COO, Sheryl Sandberg, has been characterized as recklessly leading the enterprise into dangerous waters. The New York Times reports:

Facebook has been implicated in a global breakdown of democracy, including its role as a vector for Russian disinformation during the 2016 American presidential election … Facebook was instrumental to genocide in Myanmar; it has also been tied to violence in India, South Sudan and Sri Lanka. There have been privacy scandals … advertising scandals … multiple current federal inquiries, and an admission that using Facebook can be detrimental to your mental health.

From Entrepreneur to Autocrat

Musk and Zuckerberg have spectacular records as entrepreneurs. They actualized visions that have improved many lives in many ways.

Navigating the transition from entrepreneur to CEO of a publicly traded company can be treacherous. Accustomed to making decisions on their own, they’re suddenly subject to an ever-rising range of stakeholders, representing an array of interests and values.

Their new power does not come with a road map. As they are granted the capacity to affect the lives and well-being of an ever-increasing number of people, they foreseeably face an extraordinary test of character.

Tesla is reliant on government subsidies and funding. Facebook is exercising unprecedented public power as a media enterprise. Each corporation is, in the evocative words of Edmund Burke about the British East India Company, a government in merchant’s clothing. The character and behavior of these CEOs is more important than that of many other public companies.

Hypnotic Hubris

How could these brilliant business leaders fall into such obvious, consequential mistakes?
Doubtless many articles and studies will examine this question in the months and years to come.
History and recent experience point to a likely culprit: Hubris.

Musk and Zuckerberg may well have fallen prey to the familiar strain of pride that can consume individuals coming off a string of improbable successes. That’s familiar enough.

There may be another aspect. Leaders who repeatedly overcome steep odds can transmit a hypnotic hubris into the organization they ostensibly serve. Uncertain of their own judgment after witnessing events they could not foresee, many associates and experts may lose confidence in their own expertise, skepticism and even common sense. They cease to constitute a guard rail against folly. Instead, they become enablers, complicit in ever greater misjudgments and missteps.

What About You?

Have you experienced or observed hypnotic hubris, wreaking havoc in a large-scale enterprise? How did you react? What did you learn?

If you held authority or dispensed advice at Tesla or Facebook, would you have recognized the significance of Musk’s or Zuckerberg’s errors?

If so, would you have spoken up, even at the risk of your influence, or your position?

If you were CEO, how would you ensure that you weren’t succumbing to overweening pride? Would you structure your environment to ensure that outside and objective voices would be heard and heeded?

James Strock is an American entrepreneur, author, speaker, former senior-level public official, and reformer in business, government and politics. His most recent book is “Serve to Lead 2.0 – 21st Century Leader’s Manual”. To learn more about James’ work, visit his website: servetolead.org.