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How Could They Have Been So Stupid?

Vivid EpiphanyWe’ve all witnessed debacles in decision-making, decisions so bad that we on the outside knew at first blush how bad they would turn out to be the second we saw them.  I’ve always been curious about those kinds of decisions, the one’s where we all knew better, and yet the people making them thought it was a good idea.  (I’m also curious about the converse of that, the one’s that no one thought was a good idea that turned out to be world changing like the iPad. And, we’re not talking about that today.)  Recently, I’ve studied critical decision-making and the latest neuroscience in much more depth so that I can upgrade our Improve Performance NOW!™ Executive Leadership program for 2012, and I can’t resist sharing some of the juicier observations.

There are a few “how could they have been so stupid” instances that came into my world recently.  Summer’s Eve “Hail to the V” campaign has resulted in ads pulled, although they are still persisting with the talking vagina.  I think they’ve pulled the african-american and latino vagina’s of because of accusations of racism.  The women I know cringe when they see these things.  In another offensive-to-women blunder, JC Penney’s sold girls t-shirts this year with the slogan “I’m too pretty to do homework, so my brother has to do it for me.”  And, of course, Netflix decision to separate their vastly inferior streaming business from their DVD business and then hike prices by 60% during  the largest recession this generation.

When executives  examine the decision failures in their organizations, they often attribute these colossally bad moves to lack of intelligence, incompetence, lack of experience,  or a lack of related experience.  When I look at that Netflix decision, I think greed, overconfidence from the CEO, and not knowing the customer.

It seems like there must be a root cause or a scapegoat, and once we get whatever it is fixed, it won’t happen again.  The danger of that approach is that complex decisions get made in complex systems.  Rarely do executives examine the social, emotional, and political dynamics that lead to disastrous decisions.

As brain-based coaches, we’re aware of the many factors that can influence decision-making.  Cognitive biases, how we frame the problem, mental models, social pressure, group think, the organizations ability to constructively manage conflict, the decision-making process (or lack of one), the organizational culture, our ability to rationalize things away, complexity and ambiguity are all at play when organizations have big decisions to make.  Blaming Bob may be expedient, but it won’t do anything to prevent the next disastrous decision.

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