CEO Failure Mode: The Cult Leader

The next in a potentially endless series on the pitfalls of the CEO role

Previous posts in the CEO Failure Mode series:

♟️ The Master Strategist

🔐 The Total Control CEO

👑 The Budget Tyrant

🦢 The Black Swan

For more on CEO failure modes, check out my book, The CEO Tightrope (4.43 stars on Goodreads).

My follow-up book, The Chief Executive Operating System (4.49 stars on Goodreads), is also available for more practical CEO tools.

One of the fundamental questions CEOs must answer is:

How do you communicate a vision and path for the company while also being flexible enough to change rapidly if business conditions change?

I am heartened when I see a CEO doing a great job communicating the mission, vision, and values (MVV) internally. That’s a really important duty. It keeps everyone aligned, guided by the same North Star.

But—you know what’s coming if you read the whole book I wrote about balances in the CEO role—it’s possible to lean too far in the direction of uniformity around an infallible, etched-in-stone MVV.

When the CEO doesn’t just communicate the MVV but acts as if it came down from Mount Sinai on tablets, it’s possible that no one will challenge their views. The MVV becomes both article of faith and cudgel, used to force consensus and reinforce the CEO’s pre-existing beliefs.

The Luxury of Being a Cult Leader

As I was sitting in church listening to the pastor one day, I realized that religious leaders have an advantage over CEOs. For example, if they are Christian they profess a belief in Jesus, and trying to follow his teachings is their strategy. They don’t have the constant need to watch what other religions are doing to see if they need to make a change. They have a set of beliefs, a vision, that is unchanging, and only their interpretation, or strategy, may change over time as the world progresses and the nature of our lives change. We saw this recently as people speculated what the new pope’s strategy would be. Not all religions are cults, of course, but they are typically rooted in an unchanging set of principles.

By contrast, cult leaders have an even greater advantage over CEOs. They have no need to consider adjusting their vision or strategy because they have surrounded themselves with people who believe in the absolute righteousness of it. Cult leaders have developed such an intense level of belief in their vision among their followers that no cult member questions any of their decisions, regardless of how bizarre, dangerous, or even fatal they may be.

The Cult Leader CEO indoctrinates their employees in a vision that is almost spiritual in nature. They convince them that questioning the vision is like questioning the king: not allowed. Any doubts are treated as disloyalty and failure to get with the program.

Companies run by the Cult Leader CEO can be quite successful, until they encounter an issue where their fundamental assumptions need to be challenged. Then they often fail spectacularly because no one in the organization has ever considered any other possibilities. Employees are frozen because they have been trained to never question the vision or strategy, even when the company desperately needs to adapt.

What the Cult Leader CEO doesn’t realize is that adaptation is a requirement. Listening to other voices is a requirement. Dissent is a requirement. You can’t be so dogmatic as to think that your MVV and all that goes with it are infallible.

Just look at the Fortune 500. Hundreds of companies drop off it every decade. (Watch them do so in this amazing animated graph by Gary Hoover at the American Business History Center, in video version below.)

Strategic visions aren’t permanent. Cult Leader CEOs fail because they don’t realize this.

Cult Leader CEO Profile