Close Close
Your article was successfully shared with the contacts you provided.

At a recent luncheon hosted by a large asset manager for a small group of financial advisors, I was struck by how one person dominated the conversation — not in a pleasant way. He was in an agitated state, denouncing all past, present and future employees of his firm. He bragged about how many assets he had under management and how clients were clamoring to seek his wisdom.

And yet his business and income were declining because the people he hired were “incompetent and worthless” (in his words). Having grown weary of his rant, I interrupted him to ask whether his wife was financially sophisticated. He replied, “No. I make all the decisions in our family.” This line further endeared him to those in attendance.

I then asked, “If something were to happen to you (hoping it would happen soon), would you recommend that your wife work with someone on your team to help with the difficult financial choices she would have to make?” He replied, “Of course not.” In other words, only he has the required skills and wisdom to navigate life’s complexities.

Put another way, this leader trusted no one. Ironically, not even the folks he — in his infinite wisdom —had selected to be part of his team. He needed the final say, to be perceived as the expert, revered as the wise old soul. While this luncheon guest represents an extreme case, the hubris he exhibited smelled more of fear than confidence. His bravado was a shot in the foot rather than a shot in the arm. No doubt his clients, employees and service providers are acutely aware of his core character.

As for his employees, have they just given up? Do they fear his reactions and stop trying to stand out? Does expressing their views result in conflict with the boss?

I am intrigued by how people act in good times and bad. Does an individual rise to an occasion or run for cover? Do they flaunt their successes or do they minimize the glory of their accomplishments? Do they insist on being part of every decision when things get tough, or do they empower and enable those around them to use their judgement and insight to produce better outcomes? We discover what people are made of when they encounter challenges, uncertainty or loss.

Most decent human beings find braggarts, exaggerators and peacocks insufferable, yet will endure them if their job or income dictates this pain. Over time, a negative balance in such a relationship creates a strong desire to turn the tables at the first whiff of fear emanating from the petty tyrant.

Victims of oppressive leadership either retreat to unproductive and disinterested obeisance or seek to break the chokehold and move on to more fulfilling relationships.

Best and the Worst

For several decades, I’ve worked with leaders and luminaries in financial services — both the best and the worst of our business. There are those who stepped into the breach when their company’s founder died suddenly, and those who gave up their own pay instead of sacking employees when the financial markets appeared to be collapsing.

There are also those who blamed employees for every struggle, and those who criticized a prospective client’s judgement when they chose another provider over them. This sort of “leader” avoids accountability when service issues arise, avoids responsibility when plans are not met and avoids introspection when circumstances deserve examination. They refuse to consider that their competition may have a superior proposition, a more supportive culture or better leadership.

An article in Psychology Today written by Michael Formica, MS, MA, put this dysfunctional personality in perspective. He wrote:

“An abuser is morbidly insecure. He has little sense of his own social value and makes an effort to gain or regain some semblance of that value through domination and control. The fear that feeds this insecurity has two fronts: fear of not being lovable, and fear of appearing weak. The paradox here is that the abuser is, in fact, weak, which is why he abuses in the first place — to maintain a sense of control.”

He added, “The victim is also morbidly insecure, and for surprisingly similar reasons. He also has little sense of his own social value, but makes an effort to establish that value by losing himself to the demand for submission.”

It may seem harsh to call weak leaders “abusers” but this label fits those who batter down employees and partners. I’ve often said that a leader’s job is not to motivate, but to create an environment in which motivated people will flourish. Screaming at your team to think smarter and work harder creates the opposite result. Effective leaders focus on psychological safety in the workplace.

Psychological Safety

Amy C. Edmondson conceived the term psychological safety as “a shared belief that the team is safe for interpersonal risk taking.” She is the Novartis Professor of Leadership and Management at the Harvard Business School.

Professor Edmondson relates that the highest performing teams in her study initially seemed to make more mistakes than their counterparts. As she dug deeper into this curious observation, however, she found that high-performing teams didn’t actually make more mistakes than low-performing teams. They just admitted more mistakes.

Her conclusion: By treating failure as an acceptable outcome, leaders empower teams to learn, discuss and work together to develop better results.

Instead of micromanaging every detail, seeking culprits for each failure and creating insecurity in her employees, imagine a boss who shifts the dynamic from managing to enabling. What if she created clearly defined goals along with clearly defined responsibilities and work plans? What if employees felt a personal connection to their work and a sense that what they do actually matters?

In a workplace that doesn’t feel safe, you’ll find a company where both managers and employees fear being blamed or shamed. They won’t ask questions, share ideas or voice concerns. Imagine the impact of this behavior on your business.

Andy Stanley — the founder of Atlanta-based North Point Ministries and a thoughtful philosopher on leadership — says, “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.”

As advisory firms grow more complex, the need for clarity, confidence and communication becomes more urgent. Unfortunately, this pressure triggers many leaders to tighten the grip, involve themselves in every detail and question every judgement. These angst-ridden conditions make partners, employees and managers wary and fearful.

What kind of work environment have you created in your firm? Do employees participate freely in discussions? If nobody calls you out on things because you have shut them down, then it’s time to take inventory of your leadership. Are you experiencing more involuntary turnover of staff and clients? Are you seeing an increase in errors or a decline in productivity? Are employees going through the motions — or truly producing results? Do they fill your workplace with positivity, pride and fresh ideas, or do they mope and whine and sneer?

It is natural for those at the top to feel anxiety, stress and even fear. Some admit, “It’s lonely up here because the final decision sits with me.” Overcoming these harmful emotions can be near impossible if you have cultivated the same toxic feelings among the people on your team.

Mark Tibergien is CEO of BNY Mellon’s Pershing Advisor Solutions. Tibergien is also the author most recently of “The Enduring Advisory Firm,” written with Kim Dellarocca of BNY Mellon and published by Wiley. He can be reached at [email protected].