New UQBS Professor says big heads are fat cats' own worst enemy

1 Apr 2009
UQ Business School Professor Mat Hayward is working on a follow-up to his successful book about management egos ruining good companies and it seems there is no shortage of material. "It is quite difficult to find a business today that has not been materially damaged by out of control egos," Professor Hayward said. Professor Hayward, 46, specialises in the application of behavioural decision theory to the decisions and actions of executives and has recently taken up a full-time position as Professor of Strategy at UQBS. He published Ego Check: Why Executive Hubris is Wrecking Companies and Careers and How to Avoid the Trap in 2007 and is now working on a follow-up titled Get Real: Facing Up to the Truth in Business. He said hubris - excessive pride, presumption or arrogance - was so pervasive because confidence was needed for success in business and in life, but the line that separated supreme confidence from an out of control ego was razor thin and could be crossed in an instant. "In Queensland, ABC Learning Centres is a tragic example of a very sound business that has largely been destroyed by the decision of a few individuals who overestimated their ability to leverage and grow the business and strip cash from it for their side companies," he said. "Then of course there is the financial services industry in the US, underestimating the risk and overestimating their ability, and Rio Tinto which grossly overpaid for Alcan." He said his new book would focus on "straight talking" as a solution to the ego problem. "What I am trying to do is get businesses to institute a process for checking egos before making decisions," he said. "It is often difficult for senior management to admit that they may lack a capability to handle a transaction and it is something that in general we humans have to work very hard at as we are very prone to self enhancing behaviours. "But in the end if you are going to have a successful career and life, you are also going to have to learn how to check your ego." He said his fascination with this topic began in the 1980s when he worked as an investment banker and then a venture capital investor in Australia, advising high-profile CEOs on mergers and acquisitions, and was able to see the affect of executive hubris first hand. In 1992 Professor Hayward decided to leave the corporate world for academia, completing a doctorate at Columbia University in New York. Prior to moving to Brisbane with his family in January, he was an Associate Professor at the University of Colorado, Boulder. Professor Hayward teaches Masters courses in Strategy at UQBS as well as undertaking research and consulting roles with multinational organisations.