The EQ Leader

Chapter 9Stress Management and Leadership

Only three things happen naturally in organizations: friction, confusion, and underperformance. Everything else requires leadership.

—PETER DRUCKER

More companies die because of the rigidity of their leaders than any other single cause, according to an article in Forbes by Dina Gerdeman.¹ She points out that less than 0.1 percent of firms in the United States make it to the age of 40 years. Amazingly, only 10 percent of firms founded in 1976 were still operating in 1986.

In addition, we are all well aware of those large, longstanding, seemingly infallible companies that collapsed: Polaroid (started in 1937), RCA (which was twice the size of IBM in 1955), Blockbuster, RadioShack, Borders, and many others. The lack of agility of the leaders in these organizations, perhaps combined with poor planning and execution of strategies for changing markets, led to their downfall. Gerdeman cites the work of Harvard Business professor Michael Tushman and Stanford Business professor Charles O'Reilly III who concluded, “The leaders of these companies were rigid in one way or another—unable or unwilling to sense new opportunities and to reconfigure the firm's assets in ways that permitted the company to continue to survive and prosper.”²

Of course, they also present examples of companies whose leaders were successfully able to make these transitions. For example, IBM started out in 1913 as a mechanical tabulating machine manufacturer and is now a $100 ...