I’m delighting in thinking about the background as to how intelligent people make stupid mistakes.
Yes, I have another course to develop content for… this time strategic thinking and in particular UN-strategic thinking of Brexit, of Nokia and of Boeing 737Max amongst others. All were avoidable disasters that weren’t avoided: why?
In reviewing the most spectacular failures three key factors result in the kind of expensive, embarrassing, late-stage collapse that is the hallmark of a these cases. They were:
Illusion. A a strategic disaster starts with the decision maker’s belief that a goal is much easier to attain than it actually is. The expectation that two car companies with different languages and different cultures would merge together flawlessly, as the architects of the doomed Daimler-Chrysler merger apparently believed? The Bush Administration’s estimate that the invasion and reconstruction of Iraq would take no more than a few months and $60 billion? Such naive thinking is the prelude of tragic proportions.
Impatience. A misguided idea alone does not produce a disaster. The idea also needs a champion determined to shove it along, usually over the objections of more-knowledgeable underlings. Sergey Brin’s reported insistence on introducing Google Glass to the public against its engineers’ wishes turned a potentially groundbreaking piece of technology into a stupid-looking joke. Teresa May’s insistence on her deal or no deal or no Brexit is the precursor to interminable and damaging intransigence over Britain and the EU.
Incompetence. When errors of information and timing meet blatantly stupid decisions originated by people who should know better, disaster tends to ensue. Bear Stearns wasn’t the sole cause of the global financial crisis, of course, but former CEO Jimmy Cayne’s decision to spend 10 days of the 2007 subprime mortgage loan meltdown playing at a bridge tournament without phone or email access contributed to the firm’s collapse—and to the worldwide disaster that followed.
All three of these failings share a common root: people in power who don’t (or won’t) acknowledge the realities of their environment, and who don’t push themselves to confront what they don’t know. Nobody likes to spoil the heady euphoria of an exciting new project by discussing the possibility of failure. The problem is, if potentially bad outcomes aren’t addressed pre-launch, they are more likely to surface afterward, when the reckoning is public and expensive.
The antidote to such disasters is a simple tool I readily recommend, that engenders a willingness to confront the possibility of failure and disappointment in a positive way and enable such an outcome to be considered in every new venture, and to plan accordingly.
I utilise a decision-making tactic recommended by Nobel Prize-winning economist Daniel Kahneman (who in turn credits it to psychologist Gary Klein). Before a big decision, teams should undertake a “pre-mortem.” The assignment to imagine a future in which the project is an unmitigated failure then brainstorm the detailed causes of the project’s failure (if a major project it could outline the steps and decisions that led to each outcome). Imagining failure and thinking backwards to its causes helps groups identify the strengths and weaknesses of their current plans, and adjust accordingly. Each failure is then positively addressed to Ensure it does not occur. It also produces a feeling of relief when the team’s unrecognized fears and anxieties are surfaced and addressed
People make better decisions and are more committed to them when they look into the future and they imagine that they already failed, and they tell a story about what happened. With better planning, it won’t be a story that has to be bleeped out.