The Rise of the Rogue ExecutiveBy Leonard R. Sayles and Cynthia J. Smith (Prentice Hall, September 2005)
In the aftermath of a now legendary era of corporate scandals, lawyers and journalists have done a fine job of following the paper trail. But internal memos and receipts for gold-plated wastepaper bins tell us only how we were scammed. The more enlightening question, posed in The Rise of the Rogue Executive, is why.
Of course, the easy answer is greed. Or hubris. Or any number of catchall explanations. But leaders seeking to avoid the same mistakes need more than generalities. To get ahead of the problem, the authors have reached decades into the past, seeking to untangle the complex knot of personal motivations and systemic flaws underlying the widespread pattern of deceit revealed over the past several years.
The book reads like the voice-over from a hard-hitting documentary—often dry but unforgiving. As the camera pans, we examine macro trends, such as the rise of 24-hour news and the persistent drumbeat for quarterly earnings, and their micro results: imperious CEOs and their unscrupulous accountants. It's impossible to ignore the message. Patching up accounting loopholes with fixes such as Sarbanes-Oxley addresses only the symptoms. The deeper causes—the slippery whys embedded in our systems and ourselves—need closer examination if we want to avoid marching down the same paper trails again.
Enron, WorldCom, Andersen—many of the book's villains will be familiar. But Sayles, a management prof at Columbia's B-school, and Smith, an anthropologist who chronicled Andersen's collapse, also sort through the rubble of more than 100 lesser-known corporate scandals to reveal broader trends.
What we liked
This book digs deep, looking beyond the fallout to the root causes behind the mess. More important, the authors explore the fundamental weaknesses of people and organizations with an eye toward how they can be mended. Even with all the wrongdoing, the book's tone is pretty optimistic.
What we didn't
At times the writing is flat and disjointed, leading to flashbacks of sleepy lectures in econ 101. Some of the material seems to be from anonymous sources ("an executive at a company says"), leaving readers with vague assertions and not much hard evidence.
What to say to sound like you've read it
We've spent years cataloging C-level chicanery. It's time to stop compiling the offenses and start using what we know to build solutions, not just more rules, into the system.