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9.03.2009

Unavoidably bad decisions

When I was a jet setting management consultant two decades ago, I noticed a pattern that made no sense to me at the time. When a business enterprise began to show signs of failing, the leadership started making one bad decision after another. It appeared the top executives sought to hasten the demise of their enterprise, while claiming to do everything to ensure it's survival. The kinds of bad decisions I witnessed repeatedly include the following:
  • Driving out or terminating those with the most talent, domain expertise and smarts essential to success
  • Rewarding and recruiting agreeable sorts without a clue how to solve the problems and keep the customers satisfied
  • Dismissing bad news passed on first hand from customers as acts of betrayal by the messenger, not important messages
  • Throwing money at bad investments, showy improvements and futile endeavors while neglecting the core of the enterprise
While there are always a smattering of bad decisions being made as up-and-comers get more experience with their set of challenges, at some point the pattern emerges. The quantity and quality of bad decisions becomes pronounced. I believe this pattern has begun to reveal itself in print and broadcast journalism.

Since I first noticed the pattern of bad decisions, I've researched how it can happen to consistently, why it's so alluring to those caught up in it and what makes it so difficult to avoid. Here's a few dimensions of what I've learned:
  • When our minds are making decisions about dangers, threats or enemies, we skew the evidence, over-react to provocations and cling to legacy practices out of desperation.
  • When situations are stirring up a lot of anxiety, guilt feelings, and self-incrimination, we uncontrollably take our frustrations out on others regardless of the consequences.
  • When we're afraid of going out of business, our fears serve as self-fulfilling prophesies as we become blinded to alternatives, wary of creativity and opposed to nuanced assessments.
  • When we feel we are under siege from critics, whistle blowers and nay sayers, we stick to our own kind, find fault with those who disagree and blame others for our problems.
These "cognitive mechanisms" suggest we don't have a chance of escaping our own downfall once we lock into it's perceptions. The decisions we make will be bad for the business, changing situations and the trust others have invested in us. We lose revenue, direction and our following in very short order.

2 comments:

  1. What you witnessed, I have lived through. It happened exactly as you described - driving out talent; rewarding & recruiting agreeable sorts; dismissing bad news; throwing money at bad investments.

    There may be a PhD thesis or a book in all this.

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  2. Thanks for adding a comment here, Harold. it's great to know you've sighted the same pattern. Your thoughts about this becoming a PhD or book got me thinking it might even work better as a Wiki where lots of people could add their anecdotes that matched different facets of the pattern. The contributors could also critique the conclusions I've reached from my research about explanations for the unavoidable nature and persistent reoccurrences of the patterns.

    Thanks again!

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