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« Do You Suffer From Any of These Energy Drains? | Leading Blog Main Page | Managing Brand You: It’s No Accident » 09.22.08
Why Do Seemingly Smart People and Companies Make Such Blunders?In business, don’t we have structures in place that are designed to bring in a variety of expertise when making major decisions and ensure that no one person can send the business in the wrong direction? Don’t we do our due diligence?As a species we are not as rational as we would like to think. We tend to be overconfident, too quick to come to a conclusion and not inclined to learn from our mistakes. In the well-executed Billion-Dollar Lessons, Paul Carroll and Chunka Mui write that “humans are hardwired to come up with bad strategies.” Doing due diligence is extremely difficult because of these natural tendencies:
Inertia too, is a big contributor to poor strategy. The hoops that one has to jump through and layers of bureaucracy that have to be appeased “make it hard to derail a strategy once it has reached a certain point. It’s just too painful to go back and start over.” The authors say it is not enough to be aware of these issues. If we are to learn from our mistakes, there has to be some incentive to do so. ![]()
Posted by Michael McKinney at 12:39 PM
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Comments
to err is human. True for smart people also for they are human. Hence it is required that many people put their heads together to minimize the possibility of error. However in a pyramid structure it is difficult to have it as the communication remains unidirectional. It flows from top to bottom like water. Will a group leadership be better ?
Posted by: sambit | September 22, 2008 03:02 PM
Group leadership offers no guarantee. Our research shows that groups have their own issues, the predominant one being the danger of "group think." Whatever the management model, we think the key is to enable process and cultural shifts to give license of robust debate. And, in the end, it is important to get truly independent perspectives on major decisions. We've made a chapter from our book related to this issue free on our website:
http://www.billiondollarlessons.com/89
We'd love to the reactions from readers of Michael's blog on this chapter, and the book in general.
Regards,
Chunka Mui
--
http://www.billiondollarlessons.com
Posted by: Chunka Mui | September 26, 2008 01:27 PM
I recently wrote the following:
Leadership defines success
Success manages failure
Failure is merely a result
Actions lead to results
You can't ever have improvement without learning to make mistakes, as well as, learning from your mistakes. Unfortunately, we live in a world that wants to delude itself with a zero defect mentality.
Great musicians can play a perfect piece of music. The audience hears nothing but error free music, however, the trained musician will recognize instantly where his notes were off and how much more he can improve.
Finally, in corporate america, I have often found a paradox of sorts. Things really are going well when you begin to see so called glaring mistakes. I often ask people to imagine your looking at a white wall with just a few ink spots. It is clear to the eye where they are and it easy the mistake and seek improvement, but imagine a wall that is bespeckled everywhere and dark, and tell me now where the mistake is actually. Its when you can begin to see the blatant mistakes or errors that you really should recognize how well someone is doing, not how poorly. Often in the morass of today's world, we focus negatively on the wrong idea. You might want to keep your eye more on the people who suppossedly are not making mistakes and ask yourself, why is that. Mistakes are often a sign of real effort, whereas no mistakes can be a sign of someone who has learned how not to make mistakes only or worse how not to let anyone see them. Those are often the mistakes that can take down an entire company when they are finally realized. Managers need to focus more on encouraging people to share their mistakes. Can you imagine rewarding people for owning up to mistakes or finding the defects before they go out the door or the problems with the company's processes. That might actually make a difference and save a life or save a company.
Posted by: Matthew Laos | September 27, 2008 12:26 AM