Why Smart Leaders Make Dumb Decisions

Like many of you, I spend a good bit of my time thinking about and/or interacting with organizational leaders and wondering what the hell makes them tick.

Or, to put it another way: Why do smart leaders make really dumb decisions? Because when it comes right down to it, leaders are only as effective as the decisions they make.

The truth of this slapped me upside the head the other day while speaking with an acquaintance about his company culture. This gentleman reported that morale is dreadfully low, and most of that has to do with the head honcho. (Let’s call him Frank.)

“On the face of it” this gentleman said, “These issues have nothing to do with Frank. But when you start connecting the dots, everything leads back to a decision Frank made about this or that.”

Wow. What a simple but powerful reminder that decisions don’t have to be legend to have lasting and profound impact.

Caution! Watch out for these decision-making hazards

In the Harvard Business Review article Why Good Leaders Make Bad Decisions, Campbell, Whitehead, and Finkelstein explore this question: What would cause a smart, savvy business person with access to good, reliable, and plentiful information to make a spectacularly flawed decision?

Campbell and associates tell us these bad decisions are preceded by the presence of:

Inappropriate self-interest;
Distorting attachments (i.e., attachments to people, places, and things that cloud clear thinking)
Misleading memories.

While first reading the article back in 2009, “misleading memories” struck a loud chord because at the time, I was working for a company with many long-term leaders who thought every new problem was some iteration of an old problem they’d already faced and licked.

Unfortunately, they learned the truth the hard way.

Who cares what YOU think?

Forewarned is forearmed, however, and Campbell et al. assure us that leaders can learn to recognize and manage these “red flags” before they impede good decision-making.

(You might want to read the entire article, as it’s definitely worth your time.)

Why else might a good leader make a foolish decision? Once again, the HBR has an answer.

In Becoming Powerful Makes You Less Empathetic, Lou Solomon references studies showing that powerful people “suffer deficits in empathy, the ability to read emotions, and the ability to adapt behaviors to other people” and that power may actually alter how the brain works. Golly, that explains a lot.

As Solomon points out, most leaders don’t fail by committing fraud or some other big no-no but by abusing their power in less dramatic but appreciable ways that build over time.

A lesson from the pulpit?

Several years ago, I flew out of state to witness my old pastor get installed at his new church.

During the ceremony, we were asked to pray for the pastor, because pastors face particular temptations.

(Now, I know every TLNT reader doesn’t believe in the existence of a supernatural higher power, but the parallel I’m about to make holds, regardless, so please stay with me for a bit.)

Here’s the idea: If you’ve been called to devote your life to spreading the news about THAT guy, then you better be on the lookout for the tricks of THAT OTHER guy, because he would like nothing better than to stop you in your tracks, ala this guy and this guy.

It’s not that different for corporate leaders.

If you’ve got power, it’s important to be on the lookout for the particular temptations that befall powerful people.

For example, it’s good to remember that “yes men/women” and sycophants are pitfalls, not perks. Ditto for the privilege to shut out feedback and hold your own counsel with impunity.

Solomon cautions that leaders can lose their bearings slowly and then suddenly, and hers is more than a philosophical notion. I’m sure many of you are personally aware (as am I) of an organization somewhere that is leisurely (or perhaps not so leisurely) heading into decline, one “bad mini-choice” at a time.

Leadership 101: Staying grounded

Good leaders are grounded. They regularly and mindfully seek the opinions of others, even while accepting full responsibility for the actions committed under their charge.

A grounded leader cares about his or her effect on others. Unlike unconscionable leaders, whose concern mostly stems from whether certain actions make them look bad, good leaders really DO give a damn.

But staying grounded takes work. It’s natural for leaders to be tempted into dismissing the reality that many around them are dependent on their favor and therefore have strong reason to flatter, acquiesce, and obey regardless of their true feelings.

So if you’re the leader hoping to avoid the lure of believing your own hype, what can you do?

How leaders can stay grounded

Here are three (3) tips, courtesy of Solomon:

Let others in. Ask hard questions about your conduct and impact on others
Take a “daring” self-inventory. Correct course if it reveals you’ve been breaking promises, seeking privileges, ignoring the opinions of others, failing to accept blame for your mistakes, and so on.
Find a trusted advisor, confidante, mentor, or coach.

Ultimately, no one can force someone else to be a better leader. Each leader has to want excellence for himself or herself, as well as for those who depend on the leader and — most importantly — his or her capacity to make sound decisions.