History confirms that a high-level of achievement can often come with a fairly hefty price tag. It is often at the very height of their careers that leaders become the most vulnerable to ethical, moral, or legal lapses in judgment or decision-making. Just when it appears that they “have it all,” they often engage in risky (or stupid) behaviors that blow it all up. We often refer to this situation as the paradox of success.
Sam Bankman-Fried is an example of this paradox, becoming the latest cautionary tale of the dangers of greed and hubris. Many saw the founder of the FTX cryptocurrency exchange as the “poster boy” for crypto for several years. At the peak of his financial success, he was ranked as the 41st richest American on the Forbes 400 with a personal net worth of roughly $26 billion.
On March 28, 2024, he was sentenced to 25 years in prison and ordered to forfeit about $11 billion in assets. He was convicted of seven criminal charges, including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations.
Bankman-Fried is just one example. There are numerous high profile-cases of leaders who fell from grace due to indiscretions like accounting fraud, embezzlement, sexual impropriety, and perjury (among others). It has become increasingly difficult to find leaders who can sustain our respect over the course of a long and distinguished career.
So, why do successful leaders make poor decisions just when they have the most to lose? While the exact answer obviously differs by person and situation, there are some common patterns that can help explain why leaders self-sabotage when they’re at the top.
1. Privileged access
As executives advance in their careers, they continue to benefit from privileged access. This includes greater power and influence, increased status, more impact, a heightened sense of personal achievement, plus greater perks and financial rewards.
2. Greater autonomy and less oversight
Successful executives have greater control of resources and decision processes, increased access to information, people and resources. In many cases, they have the ability to set their own agendas without direct day-to-day supervision. Greater autonomy plus less oversight can either liberate the individual to achieve ever greater results, or they can provide a recipe for disaster.
3. Increasing isolation at work and at home
When leaders climb the corporate ladder, they’re not longer able to share their concerns with peers and workplace colleagues. This dilemma, coupled with large blocks of time away from home, can cause them to experience a sense of increasing personal isolation and a lack of intimacy in their relationships. Over time, this can cause them to become increasingly out of touch with the reality of their situation.
4. Discontent with current status and increased desire for more
As their isolation increases, they often become dissatisfied with their current status. They might start to desire more and more of the trappings of success. This can cause increased stress about not achieving their goals, which leads to constant anxiety and concern about the future.
5. Overconfidence
This accumulated success can lead an executive to have an inflated sense of ability to manipulate or control outcomes of a situation. This egocentricity can cause the leader to become abrasive, close-minded, disrespectful, and prone to extreme displays of negative emotion. They often begin to operate outside of the norms and rules that have governed their actions so far (and which have helped them to achieve their of success).
6. Power to avoid consequences
Extreme success can cause executives to believe that they are somehow exempt from the moral, policy, or legal requirements that apply to the rest of us. When this happens, an executive might take a perilous action. However, they arrogantly believe that they have the power to avoid consequences. Alternatively, they might believe that they are “too smart” to get caught.
7. Boredom combined with thrill-seeking
When an executive has exceeded their own career expectations in terms of position, pay, and perks, they have little else to strive for on a professional level. At that point, it’s not uncommon for executives to take a step back and ask themselves, “is this all there is?” If there’s nothing left to achieve, they might stop and ask themselves, “what’s the point?”
At this juncture, boredom can set in. This leads the executive to begin to take on increasing levels of risk—just for the excitement of seeing if they can get away with it.
8. Early strengths that become liabilities later
The very strengths and assets that a leader has for can also become a liability under the right circumstances. This especially the case during times of high stress. Confidence and charisma are positive leadership qualities, but they can easily lead to arrogance and blindspots.
Preventing self-sabotage
So, how can corporations prevent their leaders from self-destructing once they reach the top? One approach is to establish “guardrails” to help protect them common risk points.
Some of the most promising strategies include 360-degree performance feedback, executive coaching, and leadership training. Policies that promote a healthy balance between the executive’s work and personal life can also be helpful, as well as access to a therapist, counselor, or Employee Assistance Program. These strategies are likely to be most successful alongside an ethical organizational culture based on respect, clear expectations, and personal accountability.
The intersection of success and the potential for risky actions by leaders is clearly a dangerous crossroad. No matter how much power and success they have, leaders need to understand that they can quickly lose it all if they start to believe their own press, stop striving for excellence, and give in to the inevitable temptations that wait for them at the top.