Joining some 400,000-plus other people, I recently finished reading Steve Jobs by Walter Isaacson. Amidst the 571-page saga of Steve Jobs’ life and times, one tidbit that caught my attention was the arrogance discussion around the iPhone 4 antenna issues. One comment that stuck out was made by Art Levinson who was on the Apple board at the time: “Arrogance was fine when the company was the ‘feisty underdog.’”

Arrogance can be an ugly thing both in your personal life and in your business. In your business it can tear a team apart or push excellent employees to leave while making mediocre employees lazy. It can make customers decide to take their business elsewhere, it can allow your products to become outdated without notice, and it motivates your competitors to join forces against you. Arrogance is often thought to be the first stage in a business’ decline.

So what is arrogance and how does it happen in companies?

Arrogance can be defined in a variety of ways: self-confidence gone wrong; a distorted self-image; an offensive display of superiority; self importance; overbearing pride; pompous; displaying a sense of overbearing self-worth; haughtiness; and a company full of “appholes” (read the book if you don’t recognize this one—page 518).

Companies typically become arrogant when they realize success through extraordinary achievements. They might lead the way in the creation and development of a new product or service but they then begin to take their success for granted. They forget what and who provided them with their success. They continue to do things as they always have and mediocrity quickly becomes good enough. They forget how they beat the competition, eventually losing touch with reality.

General Motors is a classic example. A company that led global sales of vehicles for 77 consecutive years, and two years later declared Chapter 11. So what happened? Somewhere along the way, it became arrogant. It relied on its brands, it accepted mediocre product quality, and it really did not see a need to change. Even thought GM held a lot of cash by the end of the ’90s, it saw no need to invest it back into the business for long-term improvements. The company’s arrogance did not allow it to see coming market changes and competitors like Toyota that were plowing cash into research and development.

So why might this be important to you? First is the importance of determining if your company has become arrogant, and if so, what corrective steps can be taken. Secondly is the need to look outward at your key vendors and determine if they demonstrate signs of the first stage of decline.

A few of the telltale signs to get you started: Does the company underestimate its competition, often ignoring signs of their success? Is there a lack of concern about potentially disruptive technologies and their impact to the business? Do the leaders of the company exhibit an attitude that they are incapable of failing? Are high-level employees leaving the organization due to the company’s lack of interest in their input? Are customers turning away and taking their business to competitors?

If the warning signs are radiating from one of your key vendors, take some time to do what they aren’t. Identify disruptive technologies that may be on the horizon. Study the market to determine if there are niche players that coexist. If so, find out why.

If you see warning signs within your company, there are a few actions that can be taken to address arrogance. The overarching theme is making your customers feel special. Remember that if they aren’t special to you they probably are to someone else. Lose the swagger; people want to communicate with people who are considerate and respectful. Focus on providing the most value to your customers. If you are in a leadership role, think about reengineering the company. Rotate management into new challenges; look at diversifying your talent pool. Be on the lookout for ways to reenergize the company. Become obsessively paranoid. Monitor and react to competitive actions. Continuously assume that the way you are doing it is wrong and work on making it right.

R. Randal Riebe (randy.riebe@polycom.com) is the director of AV integrator business development at Polycom.

The Other Stories

The other story in the video rental business was after Netflix lead in the streaming side of the business, it decided to change the structure of the model, creating what amounted to an almost 60 percent price increase. After the loss of hundreds of thousands of customers and a sharp decline in its share price the CEO admitted that he had slid into arrogance based upon past success.

The other story around Apple’s antenna issues with the iPhone 4 was Steve Jobs’ “high-ground maneuver” that some say is destined to become a new public relations standard. When the issue first came up Steve Jobs was defensive, believing that Apple’s competitors were behind the media circus. After the mention of the perception that Apple was arrogant and perhaps he should be more humble, Jobs’ reaction was one of hurt. The next day his attitude shifted to that of trying to get to the bottom of it.

After reviewing the call data it was clear there was an issue, although more minor than the press was making it out to be. After laying out the facts, the question of “what to do about it” was the next question. His public relations guru urged him to lay out the truth they found in the data, utilizing a firm and confident demeanor that didn’t appear arrogant.

Although others suggested alternatives, Jobs followed the advice of his public relations guru but in a way only he could have pulled off. He didn’t apologize but defused the problem by demonstrating that Apple understood the issue and would try to make it right. His next statements changed the context of the discussion—“We’re not perfect. Phones are not perfect. We all know that. But we want to make our users happy.” He then said if they were unhappy they could return the phone or get a free bumper case from Apple.

He totally changed the context of the conversation from the iPhone 4 to all smartphones.

—R.R.