As a result, books about the great leadership successes draw us like magnets. But Tim Irwin, Ph.D., looks at the discussion of leadership from the opposite perspective—leadership failures. That’s what makes “DERAILED: Five Lessons Learned from Catastrophic Failures of Leadership” such a compelling book.

Irwin examines the collapse of some of the biggest names in business: Robert Nardelli at Home Depot; Carly Fiorina at Hewlett-Packard; Durk Jager at Procter & Gamble; Steven Heyer at Starwood Hotels & Resorts & Worldwide; Frank Raines at Fannie Mae; and Dick “Richard” Fuld at Lehman Brothers.

Irwin points out that these are people who have been very successful but ultimately were fired by their boards of directors.

As he writes in this book, “Derailment and lack of success are different.”

Irwin suggests that there are similarities in the reasons why all those leaders were ousted. In none of these cases was fraud involved. As leaders, Irwin says we should look at these similarities in evaluating our own performances. In truth, this book is as much about us as the leaders profiled he says.

The five lessons identified in the book are:
1. Character Trumps Competence
2. Arrogance is the Mother of All Derailers
3. Lack of Self-Awareness is a Common Denominator of All Derailments
4. We are Always Who We Are, Especially Under Stress
5. Derailment is Not Inevitable, but without Attention to Development, it is Probable.

The first lesson, “Character Trumps Competence” is a challenging statement that really touches all of the others at some level. “Character” as Irwin describes it is not stealing money or sleeping with your executive assistant. It is about things like authenticity. Irwin says the reason authenticity is so important is that in repetitive research we learn that people want a leader they can trust. And if you can’t get people to follow you, by definition you’re not a leader.

Other aspects of “character” are related to things that are lacking– lack of self-management, humility and courage.

Behaviors that derail “self management” include being easily angered, undisciplined and inflexible. In the case of “humility” the behaviors causing derailment include arrogance, self-promotion and dismissiveness. Finally, with regard to “courage,” those derailing behaviors include conflict avoidance, micromanagement and an excessive need for approval.

Even before reading this book, you can find free personal risk assessment tool at www.DerailedLeader.com and it’s worth a visit.

Article By Paul J. Welsh

“Give me a country that is at war because the last President has been shot and I’ll figure out something to do to make money,” says Smith who is author of RICHES AMONG THE RUINS—Adventures in the Dark Corners of the Global Economy.

In this new book, Smith recounts his experiences risking not only his money, but his life, in war zones, dictatorships, and crime-ridden capitals in countries like El Salvador, Nigeria, Turkey, Russia and Iraq.

Smith sounds like he has a risky life, risking not only his investments but his life. But he doesn’t see it that way. He says he is risk adverse which he defines as always having an exit strategy for most of the bonds he invests in. He suggests that any time you invest in something that looks like it’s going bad, you should head to the exit. You’re better off taking a loss and living to fight another day.

For Smith that strategy has served him well except when it came to Russia. He rationalized that Russia was too big for the World Bank and International Monetary Fund to let fail. In turn, he invested $20 million in Russian Government Bonds. But then on August 17, 1998 Smith says, “Russia gave the middle finger to the financial world and I was at the top of the finger.”

That lesson taught him to never bet on something just because it seems “too big to fail.” He contends that nothing—no company, business or country—is immune to failure. As examples in the United States he cites General Motors, AIG, Fannie Mae and Freddie Mac.

The first thing Smith will do when arriving in Damacus will be to try to identify a local partner he can trust. To find that person who can provide him with local insights he talks with everyone including the cab driver on the ride from the airport. But he says you need to be careful because resumes are more fraudulent today.

The countries that Smith predicts will be the rising stars for investors are Brazil, China, India and Russia in that order. He suggests if you’re buying a mutual fund you should look to see if those countries are included.

You can follow Smith’s thinking at www.richesamongtheruins.com

Article By Paul J. Welsh

Interview Conducted By Jay Liebenguth