Why Smart Managers Make Stupid Decisions

Ever find yourself on a team or in an organization that’s struggling because of a leader’s poor decision? Citizens clamor about such crippling effects by their politicians routinely. You sit back and reflect on the leader personally and wonder why a savvy, experienced, and ordinarily capable person could make such a stupid decision or policy—one that wrecks a project or destroys the morale of so many people.

The leader himself or herself may actually be scratching their head wondering the same thing:  Where did I go wrong? Where did I miss the signs that this decision would sink the ship so fast?

Analyze such situations—from the typical week’s projects in your organization to the huge scandals in  the news––and you’ll find these common causes:

• “Been There, Done That” Syndrome
• Self-Interest Above the Common Good
• Power

“Seen-It-All” Syndrome  

When faced with new situations, leaders sometimes inadvertently shortcut their decision-making skills by shoving the issue into the same category as previous problems. But they have faulty memories. The situation isn’t the same.

Eastman Kodak comes to mind. When faced with photography moving to the digital world, their leadership team at Kodak refused to believe it really was a new technology—that the industry really would change so dramatically. They thought they’d lick the competition like they had so many other times before.

Some leaders continue to think every new challenge is simply a new version of an old challenge they’ve overcome. Result: The problem swallows them—and sometimes their entire organization––before they realize it.

I recently discussed a pervasive problem with a senior leader, and suggested that he survey representatives of the various departments to get feedback on the situation—a decision he’d made that frankly was being widely ignored or circumvented throughout the organization. His response:  “Look, I already know what they’ll say. Anyway, you only get negative feedback on a survey.”

Currently, he has done nothing to right the ship and the organization has largely ignored his directive. The ship is taking on water fast; he’s climbing to a higher deck, and pretending not to notice.

Self-Preservation Above the Common Good 

Some savvy managers look out for the team, department, or organization—up to a point. But when the common good clashes with what’s best for them personally, the tide turns. Of course, to a degree, everyone has their self-interest in mind. Otherwise, they’d never ask the salary when they accept a job, underprice their services or product as a seller, and never expect a raise or promotion.

At question here is inappropriate self-interests: Lying, withholding information that sabotages a project, blaming others, refusing to own up to mistakes, or taking credit for others’ work or ideas.

Unbridled Power

A management position, however gained, grants power.  And power feeds ego. Leaders begin to believe their own “press”—that they are actually the smartest person in the room.  Many managers surround themselves with people who continually reinforce that concept. Their information comes to them filtered through sycophants. Before long, these leaders lose touch with reality.  So obviously, the decisions they make may or may not reflect the reality of a situation.

A few years ago, a general manager (call him Jeff) bragged of his resignation from an organization:  “Although I’m leaving for a better opportunity, in some ways I feel bad about going. So many people are upset at my resignation. I look for several of them to resign because I’m leaving.”  Reality check:  Nobody resigned. The CEO reports that the company has continued to grow without that general manager.

Perceptions become distorted when leaders hear only from those they choose to surround themselves with as supporters.

3 Ways Managers Can Course-Correct After a Dumb Decision

• Accept responsibility for the flawed decision. Own up. Nothing starts you on the road to recovering trust like admitting a lapse in judgment.  It’s the failure to do so that infuriates others and compels them to keep pointing out the poor decision and the consequences. Confession is not only good for the soul—but for clearing the record and refilling the trust account.

• Hear from the team regularly.  To stay grounded, you need information from all sources.  You have to ask difficult questions—questions that may generate troubling answers.  You have to deal with perceptions.  You have to understand the impact your actions, your words, and your silences have on other people.  Information enlightens.

• Find a trusted advisor who can tell you the truth.  Find someone who does not report to you or depend on you for a paycheck—an internal or external coach, mentor, spouse, friend. This person can help you stay grounded to take on the tough challenges of leadership.

Smart decisions come from smart managers committed to communicate with those up, down, and laterally to stay grounded in reality.