The risks of being a powerful leader - and how to avoid them

“Those that fail to learn from history are doomed to repeat it.” The warning, often credited to the British Prime Minister Winston Churchill, remains as pertinent as ever.

Around the globe, a growing number of people are once again embracing the appeal of powerful, autocratic leaders such as Donald Trump and Vladimir Putin.

This is equally true in the corporate world. Frustrated by unrealised strategies, many investors and boards have shown a growing appetite for powerful CEOs like Elon Musk who ‘get things done’.

Yet history teaches us that allowing leaders a disproportionate amount of power can backfire. It has a tendency to isolate leaders from the truth and surround them with conformity.

This was evident in the German Democratic Republic (often referred to as East Germany).

The country’s Communist leader, Erich Honecker, was invited to visit the city of Greifswald in 1989, a few months before the reunification of Germany began.

As he drove through the city streets, he was excited by the beauty that he saw. The nicely renovated buildings confirmed his belief that East Germany was thriving.

Why powerful leaders may be out of touch

However, Honecker did not realise that local politicians had anticipated the route he would take through the city and had only renovated the buildings that would be visible to him.

The nearby streets that he did not see remained shabby and run down. The functionaries of the Socialist Unity Party of Germany showed their leader Greifswald as they believed he wanted to see it, not as the city actually was.

This kind of deception was something of a tradition in Eastern Europe.

When Empress Catherine II of Russia travelled to Crimea in 1787, her former lover Grigory Potemkin built a series of fake villages to impress her. The term ‘Potemkin village’ became a way of describing an elaborate façade designed to hide the less desirable reality.

Many Soviet leaders became so used to being deceived in this way that when a delegation found themselves stuck in a traffic jam in San Francisco in 1960, one member reportedly commented: “I’ll bet they collected all these cars here to impress us.”

Encouraging staff to be more transparent

Powerful CEOs often face a similar problem. Those who work for them are afraid to tell them the truth, especially when it comes to sharing bad news they would want to hear as early as possible.

This is not a price worth paying. Smart CEOs like Microsoft’s Satya Nadella realised this long ago and strive to avoid the pitfalls of unchecked authority by fostering transparency in their organisations.

As Nadella put it: “Listen more, talk less.” This approach worked because it created a climate of open dialogue where everyone could be brutally honest with each other.

This made sure that the CEO’s access to information and insight would not be compromised.

Other high-profile leaders with a similar stance are General Motors CEO Mary Barra, Salesforce’s Marc Benioff, and former Pepsi CEO Indra Nooyi.

The latter’s success was built on a mantra that quotes the ancient Greek philosopher Epictetus: “We have two ears and one mouth, so that we can listen twice as much as we speak.”

But how do you create a climate where you are able to pick up dissenting voices. Here are three suggestions:

1 The devil’s advocate

The first option is to establish a specific role to introduce a contrary voice. This is an approach adopted by the Catholic Church.

In 1587, during the reign of Pope Sixtus V, the Vatican established the office of ‘Promoter of the Faith’, more commonly known as the advocatus diaboli.

During the process of canonisation, when the Church decides who should be declared a saint, his role was to argue against the canonisation of a candidate. This ensured all the arguments – both for and against – were given due consideration before a final decision was made.

Why not install a similar office in a corporate setting? Someone with an official mandate to act as a contrarian will find it easier to speak up, even in a setting that is usually stifled by conformity.

2 Conduct a ‘pre-mortem’

We are all familiar with the concept of a post-mortem, where we discuss an event or outcome after it occurred and identify why it happened, especially if it was a failure.

Why not conduct a similar process in advance to expose potential flaws in your strategy.

Before proceeding to execution, ask those who developed the strategy to engage in a pre-mortem exercise. Assume that the strategy has already been executed, but has failed miserably.

Each member of the team should take on the role of a journalist and write an article analysing the failure, how, and why it happened. This process forces everyone to take on a new perspective and once again empowers them to speak up rather than keeping their concerns to themselves.

3 Step aside while strategy is created

The third option is to ‘exclude’ the powerful leader from the strategy-making process.

Bring together people from the fringes of the organisation, from outside of the organisation, and from other industries to generate ideas.

Some experienced hands should be part of the process to ensure it remains relevant. However, these should be carefully selected to avoid any loud voices that might dismiss ideas because they “won’t work here”. On the other hand, external participants need to be both loud and credible.

The powerful leader will only be presented with the final ideas to consider, ensuring that a range of perspectives can feed into the strategy development process.

Of course, all three suggestions require some openness from the leader. They will only work if corporate leaders actively encourage their employees to be open and honest with them.

Instead of firing messengers who bring bad news, reward them to show their colleagues that you value their courage and candour.

Only leaders who understand the curse of power and the risks that it poses to their organisation will provide room for constructive dissent. Those that do will reap the rewards.

This Core Insights article is adapted from a piece originally published by Forbes.

Further reading:

Understanding the impact of autocratic leadership

Five steps to harness adaptive leadership in turbulent times

Exploring the strategic mindset of leadership: Insights from industry leaders

Five strategies to change company culture, inspired by Maro Itoje

Christian Stadler is Professor of Strategic Management and teaches Strategic Advantage and Strategy and Practice on the Executive MBA and Global Online MBA.

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