Effect of Inept Leadership and Mismanagement on an Organization

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Benjamin28

I was having a conversation...turned argument...the other day with a colleague. The question put forth was whether a business organization can succeed if top management is inept. My initial reaction is no, never going to happen. My friends stance was that it is highly possible depending on the caliber of talent in the operational staff. I was willing to concede that it is possible, if you have great talent in your staff but inept managment, for a business to survive, but I can't see any business really being successful if top management is chasing its own tail.

Well, anyway, I was looking for an example of mismanagement, just something to underscore my perspective on how poor top management can really cause a company to fall into a downward spiral and I found the story of Sigil Games, which I find to be quite fascinating. It's older news but if you have not read it before, it makes for an interesting read. I just find it amazing that you can gather so many talented folks together and end up with such a mess.

The short version...Sigil began developing an online game with the financial backing of Microsoft and some of the finest talent in the genre of online gaming. Due to gross mismanagement the company spent the first 4 years or so developing portions of a game but no real functional product. At this time Microsoft dumped the project as a lost cause, and SOE scooped it up and set a release deadline. The staff then broke their butts for a year, working long shifts every day, to develop a semi-functional product at release (what most gamers describe as a steaming pile of error ridden poo). Shortly after release, the entire staff was brought out to the parking lot and fired, by a production manager, the ceo wasn't even present. Allegedly he was never in the office the final year the business was operating.

One funny thing, during the intitial years of development of this game there was only 1 quality assurance tester. How in gods name would you expect one person to check that much code, and I wonder what his daily job was like.

Anyway, the story of this company just amazed me and I figured I'd put it up here to see what you all think of it. Below are links to two interviews, one with a staff member of sigil, and another with the CEO, two different perspectives on a very strange business debacle, and as I said, an interesting read.


http://www.f13.net/?itemid=562

http://www.f13.net/index.php?itemid=561
 

BradM

Leader
Admin
Re: Inept Leadership and Mismanagement

I have, will, and will always maintain that for an organization to be effective, they must have competent management and leadership.

Many times in an organization, we wished we had freedoms to do as we see fit. Or... if I were boss, we would do...... I would surmise that both of these scenarios quickly dissolve into a quest for some semblance of leadership and wisdom. When I was a teenager, I was for sure my parents did not know anything. Funny how now I call my dad all the time for advice.

Any organization can compile all the best resources, talent, etc., but without leadership to guide the process, keep the process lean, and beat the competition doing it, mediocrity will rule at best.

And oh, as a subset of this thought... read through all the posts on failed quality systems (or failed anything) and see how many times upper management is held responsible.
 

Steve Prevette

Deming Disciple
Leader
Super Moderator
Re: Inept Leadership and Mismanagement

Sometimes I wonder if there isn't a "Hogans Heroes" element to management. That was an old TV show where the prisoners of a prison camp got away with all sorts of things while an inept German officer (Colonel Klink) ran the camp. In fact, the prisoners went to great links to make the Klink look good so he stayed on the job.
 

Stijloor

Leader
Super Moderator
Re: Inept Leadership and Mismanagement

Sometimes I wonder if there isn't a "Hogans Heroes" element to management. That was an old TV show where the prisoners of a prison camp got away with all sorts of things while an inept German officer (Colonel Klink) ran the camp. In fact, the prisoners went to great links to make the Klink look good so he stayed on the job.

Hello Steve,

I believe that the "mushroom theory" applies upstream and downstream.
Many times, the top person is also "kept in the dark and fed sh*t."
The top person is surrounded with yesmen who all have a vested interest in the status quo. Examples? Look at the news......

Stijloor.
 

ScottK

Not out of the crisis
Leader
Super Moderator
Re: Inept Leadership and Mismanagement

Let's separate management and leadership.

I think a company can survive without leadership. I was in such a company at one time. There was no leadership at the executive level. The CEO was prone to hissy fits and clearly played favorites - and the VPs were always jockeying for the favorite son spot.
But they were pretty good, if sometimes harsh, managers.
The company was always in the black and profitable enough to pay out some decent profit sharing.
But their growth was strictly through acquisition, not actually increasing efficiency in the existing plants or driving into new markets.
 

Jim Wynne

Leader
Admin
Re: Inept Leadership and Mismanagement

I was having a conversation...turned argument...the other day with a colleague. The question put forth was whether a business organization can succeed if top management is inept. My initial reaction is no, never going to happen. My friends stance was that it is highly possible depending on the caliber of talent in the operational staff. I was willing to concede that it is possible, if you have great talent in your staff but inept managment, for a business to survive, but I can't see any business really being successful if top management is chasing its own tail.

The problem is that your argument assumes its own conclusion, I think. If "inept" is defined as having a propensity to ruin the business, then you're certainly (and obviously) correct.
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But I think there are degrees of ineptitude, and until the point of critical mass is reached, a business can attain some measure of success with a top manager who's not tightly wrapped. One of the measures of competence, though, is selecting competent underlings, delegating authority, and letting them do their jobs. If a CEO can't do that, then success will be hard to find.

A while back I started a thread about an article about the idea that the same deficiencies that create incompetence also prevent people from being aware of being incompetent. It's an interesting read, and relevant here.

In the end, what's most often described as lack of competence manifests itself as lack of leadership skills, and while a dearth of leadership might allow for short-term gains, it almost always ends with failure.
 

BradM

Leader
Admin
Re: Inept Leadership and Mismanagement

Sometimes I wonder if there isn't a "Hogans Heroes" element to management. That was an old TV show where the prisoners of a prison camp got away with all sorts of things while an inept German officer (Colonel Klink) ran the camp. In fact, the prisoners went to great links to make the Klink look good so he stayed on the job.

Yes, that one is a thread to itelf; classic study of subterfuge. It also reminds me of first seasons of M.A.S.H. where Colonel Blake was projected mostly as inept, with the camp being ran by Radar. Also, the doctors could do anything they wanted. But, is effective management not also about delegation, to an extent? Does it matter who gets things done, just as long as they get it done?
 

Jen Kirley

Quality and Auditing Expert
Leader
Admin
Re: Inept Leadership and Mismanagement

Great discussion, but the auditor in me looked for the original question: "...whether a business organization can succeed if top management is inept."

The operative words are "can" and "succeed", both of which are viewable in infinite shades of gray depending on qualifications of "can" and expectations of success.

Yes, it is possible succeed to survive: if __XYZ__. There are a lot of if's; just fill in the blank and keep going until you're sleepy or too agitated to continue.
 
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Benjamin28

Re: Inept Leadership and Mismanagement

Good point that Leadership and Management should be considered as seperate attributes and don't necessarily go hand in hand, and I completely agree that a business entity can obtain a form of success when lacking leadership if the company assets and processes are managed well.

Jim, you're correct, the statement inept is perhaps too strong a term. As we all know there are varying levels of incompetency. Truth be told, I think most of us are familiar with the type of top management errror you have described, a GM who does not allow his underlings the freedom to effectively perform their job or takes on tasks which do not fall within their forte instead of delegating it to someone expert on the task.

The article in your linked thread is quite typical I would say, and interesting. You would think they would be able to gauge their own deficits by the end product and realize they don't know much on the subject by the results of their mistakes. Is it blissful ignorance, or blissful arrogance?
 

Wes Bucey

Prophet of Profit
Re: Inept Leadership and Mismanagement

I scanned, but didn't commit to memory, both links. This is such a typical story of late (mainly beginning with the dot com meltdown) that it is almost a cliche.

Probably the most telling interchange in both interviews is this one:
Ex-Sigil: Tt's hard to say really, management never communicated stuff like that to us. Often times I feel like they told us more spin and nonsense then they told the public.

f13.net: So management kept everyone in the dark as much as possible?

Ex-Sigil: Completely.
As a long-time denizen of the C-level suite, I can absolutely tell you the first, most major fatal flaw was the selection of a "figurehead" (famous because of something other than corporate leadership) as the CEO of the organization.

Often, we see failures waiting to happen when celebrities are chosen as top managers. Some folks wrongly believe the marquee value of the name will bleed over onto the product. Maybe, but that doesn't mean the marquee name should be anything other than figurehead and front man while the real work goes on behind the scenes.

When these figureheads think and act as if they were actually there because of their management skills, the Peter Principle rears its ugly head.

When a Las Vegas casino hired a pathetic drunk Mickey Mantle as a "greeter," they sure were smart enough to keep him from having any more authority than comping drinks and meals for gamblers awed by his past celebrity. Heck, I didn't even gamble and Mickey comped ME with a drink and a meal!

The hallmark of a Peter Principle manager is his secrecy about what he is doing because deep down he recognizes he is in over his head, but is too embarrassed to admit it.

Deming's System of Profound Knowledge is/was conspicuously absent in this company, based on admission by the former CEO and one of the frontline "grunts" in their interviews.

The mass firing out in the parking lot was actually good business sense to salvage any work in progress from vandalism by the disaffected ex-employees. Most corporations are just as cold, but more subtle - bringing employees to a conference room to get firing notice, then escorted back to their office after hours or during lunch with a security officer to superintend while they retrieve any personal belongings. By that time, they usually find their computer passwords have been canceled by the system administrator.

Could the company have been saved? It is apparent the major investor (Mickeysoft) had already written off the investment, hence the CEO, untrained in the skill, "disappearing" for long periods while trying to replace them with new investors. His own fear kept him from explaining the true situation to the employees, who probably continued to spend like drunken revelers in a brothel, exacerbating the "cash burn" which was so typical of the earlier dot com bustout.

If Mickeysoft had put in a hard-nosed manager, "maybe" the company could have been saved. I think the business plan of having Mickeysoft folk do the quality testing might have worked if it had been a true partnership, but I get the idea the culture gap caused the workers at the target company to simply ignore good Quality practices If we learned anything as Quality professionals, it is that Quality cannot be "inspected in" to a product or service.

"If I had been king"
Early on, I would have shunted the CEO to a figurehead position and brought in a hardnosed manager to tighten the organization. It would have been mandatory to bring all employees up to speed on the problems and opportunities of the organization. This would give folks the opportunity to jump ship if they weren't prepared to work hard (instead of play - as was the culture at so many of these companies.)

I don't buy into the theory that game creation can only be done by folks still operating at pre-school mentality. There are tales galore of a celebrated artist who had to be frisked at some museums displaying his work because he wanted to bring his paints and brushes and work some more on paintings that had been on display for more than a dozen years. He was deaf to the proposal that he create a new painting. I understand many game creators were similar to the painter in never being able to declare a game "complete."
 
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