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By Frank Atkinson

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Consider the self-promotion of Lee Iacocca, or the retirement indulgences of Jack Welch. There is no hard-and-fast measurement that signals a leader’s or a company’s encroaching decay. To some extent, Supreme Court Justice Potter Stewart’s definition of pornography pertains: We’ll know it when we see it. Nevertheless, there are behavioral clues, both positive and negative, that point in one direction or another, including: Does a leader encourage his or her people to speak up when they disagree, or put them down as not being with the program?

Unable to adjust to a rapidly changing market, the company went bankrupt in 1992. The brand survives as one of three marketed by a company called Pacific Cycle. Ignoring past missteps and acting as if nothing has gone wrong is a highly dangerous mistake. It keeps you from acquiring valuable knowledge that could prevent future problems, which was another factor in BP’s catastrophe. BP failed to connect the dots, and now it’s paying a huge price. In 2005, one of its refineries blew up in Texas City, Texas, killing 15 workers.

In 15 years of researching the subject of bad decisions and business failures, I have found that most are caused by seven specific errors - and leaders aren’t the only ones who fall prey to these fallacies. Anyone can slip into dangerous thought patterns. So, too, can all of us learn how to guard against the hazards and recognize the early warning signs before we stumble. Here, I discuss the seven habits of spectacularly unsuccessful people, using the examples of the late Ken Lay at Enron to tastemaker Martha Stewart, Tyco’s Dennis Kozlowski, the Rigas clan of Adelphia, and, most recently, Tony Hayward of BP and Mark Hurd of Hewlett-Packard.

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