When JC Penny stock shot to nearly one billion dollars after hiring who was referred to as “The Second Coming of Steve Jobs,” the parade was all but booked on the corner of Money Street and Prosperity Avenue.
18 months later, after the failure of renowned business executive Ron Johnson, those same streets were barren, littered only with the discount coupons they couldn’t even pay former patrons to use.
According to Business Insider, the “Highest Paid Person’s Opinion,” or HiPPO is a plague that has affected many top corporations and moguls from Sears to former Clinton White House Aide, Jason Goldberg respectively. This phenomenon is costing stockholders their investments and reserving a space in the unemployment line for an unsuspecting and once faithful and career driven employee pool.
It is often suggested that the most successful entrepreneurs are those who surround themselves with more intelligent people. Using this information, many major and upstart corporations looking for a boost in profit will seek out and highly compensate one of these individuals. With stacks of hundred dollar bills blocking their ear canals, the suggestions of others become unable to reach the HiPPO’s brain superiority.
No one is listening, thereby allowing only one set of opinions are being heard.
Whilst surrounding oneself with more intelligent or knowledgeable people is a good start, being able to let their opinions flow and being willing to be challenged is vital for the best plan or decisions to emerge.
This humble leadership doesn’t just apply to the traditional role of the ‘leader’, it helps everyone whose perceived authority can unduly influence critical conversations.
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Highly Intelligent Individuals DO Make Mistakes
The catalyst of failure for Johnson with JC Penny was determined to be something so simple and avoidable, it’s hard to fathom that it was even allowed to occur.
Forbes Online suggests that Johnson chose to follow his “gut” instead of proven focused group data in determining consumer preference. To state it simply, a multimillionaire believed that he better understood what a middle class patron wanted to purchase. In this case, the data was available, though it was ignored by a feeling. Since JC Penny threw all of it’s “cents” into the pockets of Johnson, is it any wonder why when Johnson asked his subordinates if the plan was working, no one had the gumption to speak up?
Large Ripples The Of HiPPO Effect
The HiPPO effect creates ripples of intimidation as members in the board room learn to keep their mouths shut, eventually lose their voice, and become accustomed to the role of subservient rat to the Pied Piper.
Employees are disempowered, moral is destroyed, and accountability becomes a tale of folklore and mythology.
The goal of a company is reduced to the vision of one, and no matter how well that one is able to see, it could never compete with the strength in vision of a cohesive unit. Why have a board room or, better yet, a board, if the voices and opinions of those in and on it are irrelevant?
Hungry, Hungry, Not The HiPPO
Once a problem has been recognized, it must be confronted if it is to change.
This is often the most challenging proposition to implement and can largely determine the fate of an organization. Allow the opinions of the staff to be vocalized before those of the influencers, even if it requires a closed or silent voting session. Crowd voting has also become a popular method with the seemingly infinite resources of technology.
To diffuse the intimidation factor of the great HiPPO, these actions are imperative. Proper facilitation, idea implementation efficiency, and restoring the voices of those who matter can bring the creativity and success back in the board room to which it belongs.
Originally published on Linkedin by Mike Sutton