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What’s Your Company’s Arrogance Quotient?

By December 13, 2011Article

No one likes being called arrogant. Yet, recently, it happened to me. I found myself experiencing all four parts of Elisabeth Kubler-Ross’s stages of death:

  • Denial — “Surely they’re not talking about me…”
  • Anger — “I am NOT!”
  • Depression — “I can’t bear to think of myself this way.”
  • Acceptance — “OK, maybe I am. I should try to understand this.”

This got me thinking. What is arrogance? What is corporate arrogance? And other than being somewhat irritating, is it really a problem?
On one end of the spectrum, arrogance can be about self-aggrandizing and dismissive behavior. On the other end, it may be a “big W” win-lose mentality, strong-arm tactics and, at times, willful disregard for the law. Even more disturbing, perhaps, may be a lack of respect and consideration that leads to inadvertent destruction — bull in the china shop syndrome — or worse, even calculated disregard.
Corporate arrogance and stakeholders
Corporate arrogance that stems from a company emerging as an undisputed market leader affects various stakeholders differently, depending on factors too numerous to explore here. But everybody — shareholders, customers, partners, suppliers, the community in which the organization operates — the larger business ecosystem, and even more importantly the planet — ends up feeling the sting of arrogance.
The company itself must ante up for the caustic effects of its own ill-advised behavior. Organizations must reconcile the gap between their ego and its real accomplishments.
Balancing arrogance with achievement
Dr. Robert Montoye, arguably the most brilliant IC chip designer at IBM, once stated that arrogance is equal to ego divided by accomplishment. His equation suggests that when the corporate ego is balanced by stakeholder perception of meaningful accomplishments, arrogance is kept in check. This is how and why, at the end of the day, the perception of arrogance depends on who, specifically, evaluates what the company has accomplished against how it is behaving. Arrogance is relative, and it is highly context dependent.
Taking this a step further, in “Egonomics “(Fireside 2007), David Marcum and Steven Smith explore the dynamics between the value (both positive and negative) of individual ego as it gets expressed in a corporate context. And the analogy between individual ego and organizational ego holds up well because the essence of the idea scales.
In particular, Marcum and Smith point to what happens when the ego is out of balance: that a strength, which one could normally rely on gets twisted into a pathological “counterfeit” strength. For example, under certain conditions the positive strength of dedication — persistence in the face of opposition —decays into the negative “counterfeit” strength of being unwilling to consider important alternatives. Vista, anyone?
The negative results of arrogance
Sure, a failed product launch is costly. And there are undoubtedly many seemingly legitimate reasons for the problems that lead consumers and IT managers to go out of their way to buy XP Professional seven years after its initial release. (Check out Mistakes Were Made: But Not By Me by Tavris and Aronson). Now that I understand the anatomy of self-justification, it’s hard to imagine a failure of this magnitude being the result of anything other than institutionalized arrogance.
But clearly no one likes arrogance. So it’s unlikely that companies go out of their way to behave badly. The problem is that people treat perception as fact. And arrogance is a perception, a sticky brand attribute, a bad smell. The challenge is that it’s virtually impossible to detect the arrogance being projected from inside the organization. What’s needed is twofold: a channel for mindfully listening from the outside in and the corporate priority to use it effectively.
Is there really a way to avoid this business social trap?
In a word, yes. Companies like Apple, for example, deliver so well that they manage to squelch most of their critics most of the time. They set expectations carefully and then delight their customers, shareholders, and their competitors. Even Apple makes mistakes from time to time. But they give the outward appearance of having considered what matters to whom. In the recent case of the iPhone, for example, the $100 store credit (to those who paid an additional $200 for the first launch) doesn’t make all the pain go away, but it goes a long way toward removing the stinger.
So how can you tell if your company is becoming arrogant? Here are some things to ask yourself:

  • Are you the market leader in your space? If so, is there an open source competitor?
  • Does your company have a formal process for gathering, evaluating and responding to external stakeholder feedback? If not, why not?
  • How do you treat bad news? Is the bearer of bad news punished or rewarded?
  • Are you surprised at how well the competition is doing?
  • Have you shipped a major product that is being derided in the press? Are people poking fun at you in their blogs?
  • Have you developed a marketing communications “crisis” strategy for dealing with product complaints?
  • Are potential employees or partners turning down what you consider to be good offers? What reasons do they provide?

I believe that that on some level, every CEO envies market leaders like Amazon, Google, Oracle, Microsoft and SAP, and that it’s rare to have a natural monopoly like eBay.
But, the real opportunity is this — it’s important to operationalize mindfulness.
So, if being perceived as arrogant runs against the grain of your mission or corporate values, it’s critical to step back and consider who really matters, what they care about, and how your business practices (read: corporate behavior) should or could be modified to take the sting out of your planning, execution and messaging.
Harry Max is a principal with Rubicon Consulting.