What’s the biggest mistake executives make during challenging times?
Denial — which I define as waiting too log to recognize that the ship is sinking and
you don’t have enough lifeboats.
Recently, I interviewed Jim Farris, President of Energy, Environment and
Systems for Ch2MHill, a veteran executive who has led during good times and
bad. When the market falls out of your business, he observed, most people simply
don’t believe it. “They are in denial. Even when the stock price starts going down
they believe that it will come back up.” Leaders, he finds, wait too long to make
the appropriate changes.
Jim worked in Manhattan during the 60s and 70s in the nuclear industry.
People were simply not prepared when “the industry hit a cliff and dropped off.
Everyone had to scramble to retain their position in the market.”
He saw leaders in denial, who simply did not believe that things were going
down that fast and they waited too long to react. No one believed that an industry
so well funded would face an unknown future. After watching executives fail
during that experience, he began urging leaders to consider the “unk unks,”
meaning to consider what is “unknown that is unknown.” In Denver during the
90s, he saw some leaders making the same mistakes in the telecommunications
industry. They simply failed to see the signs that began with a lack of capital
investment.
My own theory is that they denial is fueled by people problems, executives
who fail to see that they have the wrong people in critical position. When we do
have the right people in the right positions, they will shake us our of our denial.
A recent Fortune Magazine survey entitled “Why CEO’s Fail,” postulated a
similar thesis. The number one reason, of course, was a failure to make enough
money. The number two reason, however, was a failure to deal with people
problems, especially a failure to release their closest advisors and subordinates
who were not doing a good job. And the reason? Conflict avoidance. The failed
executives lacked the ability to face the fact that these people were not doing their
job, even though everyone else in the company recognized their limitations.
If you’re in some kind of challenging time, a useful process is to decide how
many of your leaders are in denial. How many people are simply refusing to
acknowledge that the storm exists and are failing to make the people and strategic
decisions necessary.
Leading Through Denial. Are you?
Copyright © 2002 REV 2008. No part of this material may be reproduced without written permission from Lynne
Eisaguirre, Workplaces That Work, 303-216-1020, Lynne@workplacesthatwork.com,
www.workplacesthatwork.com
