Worse Than Enemies

December 11, 2007

The CEO’s Destructive Confidant
by Kerry J. Sulkowicz

The CEO is often the most isolated and protected employee in the organization. No one gives him unfiltered information. Many people dissemble or conceal things from him. Few leaders, even veteran CEOs, can do the job without talking to someone about their experiences, which is why most develop a close relationship with a trusted colleague – a person with whom they feel free to share their thoughts and fears. Few leaders speak out about these relationships, perhaps because they don’t like acknowledging their dependency on others. But in business and politics, most leaders rely on the advice and opinions of a trusted insider: a confidant.

The need for a close confidant is rooted in childhood. Every child wants to feel close to someone, to feel understood, cared for, and loved. While parents ordinarily satisfy such childhood yearnings, these needs are never completely satisfied. In adolescence, we typically resolve them by developing a best friend from among our peer group, and we usually pick individuals of the same sex. When we find ourselves in demanding situations later in life,we seek similar refuge with a fellow adult.

The most effective CEOs find confidants who complement their strengths and sharpen their effectiveness. Bill Gates uses Steve Ballmer in this way; Warren Buffett turns to vice chairman Charlie Munger. In the end, both the CEOs and their organizations benefit from these relationships.

Over the past eight years as a consultant to top management teams and as a psychoanalyst who treats company leaders in private practice, I have found that many CEO–confidant relationships function very well. These confidants serve their leaders and keep the CEOs’ best interests at heart. They derive their gratification vicariously – through the help they provide, not for any personal gain – and are usually quite aware of the potential for abusing their access to the CEOs’ innermost secrets.

Unfortunately, almost as many confidants end up hurting, undermining, or otherwise exploiting CEOs when they are at their most vulnerable. These confidants rarely make the headlines, but behind the scenes they do enormous damage to the CEO and to the organization.What’s more, the leader is often the last one to know when and how the confidant relationship became toxic.

Dangerous confidants come in all shapes and sizes. They are sometimes intentionally scheming and deceitful. Like Rasputin, the crafty manipulator of the Russian imperial family, these overtly bad confidants have sociopathic personalities: They habitually lie and cheat to achieve their aims without any apparent constraints of conscience.

Take someone we’ll call Sanford Anderson. (I have changed the names in our examples to protect the privacy of the individuals and companies depicted.) The CEO of a privately held real estate business in the Midwest, a company worth billions, Anderson fell victim to just such a confidant. Early in his career, Anderson’s corporate attorney, Gregg Mayer, had saved the firm millions by deftly handling a discrimination lawsuit, which earned him Anderson’s undying gratitude and respect. As the years passed, Anderson came to rely on Mayer’s advice about everything from investment strategy, architecture and design, to personnel development.

Although Anderson was in most respects a highly effective CEO, he had never seriously contemplated the prospect of retiring. Anderson’s worries about retirement took the form of denial of his own mortality. Instead of acknowledging his anxiety, he manifested it by plunging even more deeply into work, while ignoring his fatigue and gradual loss of passion. Consequently, he had never set in place an adequate succession plan. Given the toxic confidant that he was, Mayer used the lack of succession planning as an opportunity to advance his own interests. Mayer preyed on Anderson’s anxieties about aging and retirement by fueling his fears about whom might want to wrest control of his business.

Rather than encourage Anderson to slow down after he was hospitalized for chest pain,Mayer egged Anderson on in a way calculated to make him more anxious and afraid. As Mayer put it to Anderson,“Now that you’ve almost had a heart attack, the people you’re up against might try to give you a real heart attack by making you angry.” Just as Mayer planned, his stoking of Anderson’s fears paid off handsomely. When Anderson stepped down, he impulsively handed the reins of power to Mayer. Shocked by the announcement of the new CEO, several key members of the management team stormed out in protest. Unfortunately, without the skills of these key players, the company was soon in trouble, and Anderson’s legacy was ruined.

Destructive confidants like Mayer are far more commonplace than we would like to believe. But even more common,and more insidious, are confidants who are convinced they are serving their CEOs well, people who can’t see the havoc they wreak on the lives of leaders and their organizations. These confidants have blind spots about their own personalities and capabilities, and little awareness of the damage they can cause.

I have been able to identify three distinct types of destructive confidants over the course of my work. First are reflectors, people who mirror the CEO, constantly reassuring him that he is the “fairest CEO of them all.”By contrast, the second type of destructive confidant, the insulator, buffers the CEO from the organization, preventing critical information from getting out and from getting in. Then, as we have just seen in the previous example, there is the usurper, the confidant who cunningly ingratiates himself with the CEO in a desperate bid for power. In the following pages,we’ll explore how the CEO–confidant relationship plays out in each case and discuss ways in which CEOs can avoid these destructive relationships. As we shall see, the truth is that many leaders have only themselves to blame for the confidants they have.