Updated: April 14, 2023 - 5 min read
People often cringe at the mere mention of the term soft skills. This is because far too often the importance of these traits are thrown to the wayside and perceived as non-quantifiable characteristics that are useless in driving results.
The truth about soft skills is that they can be the make-or-break factor for a business. Much of this is largely due to the fact that internal politics exist in almost all companies. Yet while a political climate is nearly always a factor, soft skills determine which way these politics shape a product, strategy, or the entire direction of a company.
Before we break into examples of how these abilities determine the outcome of a business, it is important to highlight what some of the most important soft skills actually are:
Whether it is navigating the turbulent waters of company turmoil, or being the factor that shapes department culture, being adept with these skills can be just as impactful as being technically capable.
Although it is easy to simply state the importance of such expertise, there are plenty of real-world examples of companies that are floundering – or have crashed and burned – because of the lack of one or more of these characteristics. Below are a list of some of the most famous cases to date.
The Plunge of Enron
The Enron scandal is known as one of the most dramatic collapses the business world has ever seen. With its stock at one point soaring to a peak of nearly $91 per share and subsequently plummeting to just over a quarter of a dollar, there was clearly a litany of issues.
Yet, despite the fact that this disastrous situation was caused by a broad spectrum of factors, some of the most apparent problems were attributed to communication, leadership, and relationship management.
More specifically, Enron is guilty of deceiving stakeholders regarding the value of the business. This deception was infused into the culture of the company from poor management coming from the top down. In this specific case, the use of non-technical capabilities was completely ignored.
While difficult to say whether soft skills would have completely saved Enron, it is a certainty that they would have been helpful for creating a less problematic outcome. Competent leadership from execs in conjunction with honest communication with stakeholders is widely seen as a strategy that could have steadied the ship, or at least softened the demise of the former “Wall Street Darling”.
Strategy Sinks Nokia
There is a very high probability that you at one point had a Nokia mobile phone. For a little over ten years, Nokia was the industry juggernaut in the industry.
How did such a powerful business fail to keep their hold as top-dog? Many reports say the blame falls on strategic planning and relationship management.
More specifically, Nokia has seen its profits evaporate due to internal debates on where the company should prioritize their efforts. More specifically, these internal fractions have been deciding between the direction of investment towards smart or pushing their “bread and butter” dumb phones.
Clearly, they chose wrong as Nokia continues its plummeting path downwards.
Finding a better example of a company that could benefit from the soft skills of strategic input and organizational understanding is hugely difficult. Had someone with these skills been ready at the helm, it is highly plausible that it would be Apple chasing Nokia for the largest slice of market share.
The Theranos debacle is all the rage right now. And for a good reason! Anytime a company commits fraud is a big deal, but when a business is deceiving investors to the tune of 9 BILLION DOLLARS, well, the issue becomes monumental.
Amidst the deception, scheming, and outright lying, one of the fatal flaws responsible for exposing Theranos was the lack of empathy from Founder Elizabeth Holmes and the employees drinking the company Kool-aid.
It is one thing to “fake it until you make it” with technology, but to utilize this tech-era adage into healthcare places customers’ lives on the line. Elizabeth Holmes and her army of PMs, engineers, and other employees are not only guilty of doing this, but profiting from it as well. Far from demonstrating just a lack of empathy, these individuals lack the entire aforementioned list of soft skills.
While there were noble people working hard to truly revolutionize the world of medicine, the individuals perpetrating the malice caused widespread harm.
If Elizabeth Holmes was a person holding a high standard of customer care, empathy, self-awareness, or a modicum of true leadership, maybe she and the PMs who surrounded her could have had a different fate.
The fall of Theranos could have been avoided with honesty—by owning all ineffective outcomes of their blood-testing technology before it was too late. For sure, they shouldn’t have said they achieved something they never did. Would they have ended up as revolutionary visionaries who changed healthcare as we know it if they had been aware of soft skills? We believe so!
The Tangible Possibilities
All of these examples may seem like a preachy case against corrupt CEOs and individuals in leadership positions. The reality, however, is that the importance of possessing these soft skills effects the entire chain of command – especially PMs.
It is not difficult to imagine a Junior, Mid-level, or Senior PM staring down a similar situation. Product Managers are at the crux of major decisions, and these decisions don’t only affect the product, but the strategy, culture, and the entire company as well.
Thoughts on the importance of soft skills within a company? Have an example of when one of these abilities was a critical moment in defining a business? Let us know! Drop us a line on our Slack Channel.
Updated: April 14, 2023