When Your Organization’s Decisions are in the Hands of Devils

Mittwoch, 15. Dezember 2010, 13:02:36 | Larry Prusak

by Laurence Prusak

(Larry Prusak, Brook Manville, and Tom Davenport are at work on a book on judgment and how to cultivate it as an organizational, not just individual, strength. As their research progresses, each is authoring posts in this blog to test-drive ideas and invite input.)

A week ago a friend passed along the new book by Bethany McLean and Joe Nocera, All the Devils are Here. I had felt that I’d had enough reading about our fiscal crisis, and that there wasn’t too much more to know. At the same time, I recognized the two authors to be fine business reporters, and Nocera also business columnist for The New York Times, so I knew they would have had exceptional access to the players.

Well, I read it, of course. And if any of you out there still feel that the subject of organizational judgment is too abstract or ethereal, I would advise looking into it. The book is non partisan and non ideological — government actions vie with business activities for being short sighted, rapacious, and just plain full of it. Choose any chapter of this sad narrative and you’ll find illustrations of how organizations can defy the intelligence of their own people to pursue truly benighted courses of action.

The lessons aren’t so much in the realm of fiscal or policy issues; the authors don’t offer much in that vein. More, they raise the question of what an individual can do when an organization he or she is part of shows spectacularly bad judgment. The book offers the equivalent of a hundred teaching cases on the subject.

I couldn’t help recalling that social science classic, Albert Hirschman’s Exit, Voice, and Loyalty. Hirschman, in brief, observed that there are three options available to you when you find yourself in a bad organizational or national situation. Leave, give voice to your concerns, or keep your head down and hope it will pass.

Since none is an appealing prospect, it would be best of all if there were leading indicators that could alert people in organizations to the likelihood of terrible judgments leading to awful situations. Again, McLean and Nocera come through. Here are the fatal flaws on fullest display:

Massive egotism. It’s a lesson as old as Greek drama: hubris nearly guarantees a fall. Ask yourself: Do you have a boss who is so narcissistic that he or she can’t even fathom being wrong about anything?

Monstrous power. Giving almost unlimited authority or power to any one person in a complex system is another invitation to bad judgment. Trust me on this, or read any good history of the 20th century.

Obsessive competition. Although the existence of competitors in any field leads to higher performance, there exists a golden mean even for these types. If you’ve read the book, you know what I’m getting at here.

Let’s say you spot these conditions brewing in your organization. What should you do? Give voice? Good luck to you. Not one of the featured players in this account — in business or government — showed any interest in listening to an underling, much less acting on that person’s concerns. In fact, they expended considerable effort to silence dissent.

Loyalty? Not an attractive option, either. Even beyond the tremendous hit to your pension, would there be any joy in lingering to turn the lights out at Lehman or Bear Stearns?

This leaves exit. Which is exactly what I would advise if these types of judgment deficit bearers are in charge of your workplace.

Most organizations, whatever their judgment, will reach neither the heights nor the depths of the Lucifers described by Bethany McLean and Joe Nocera. But life is too short to suck it up and stick it out with any organization whose judgment isn’t good, and won’t be getting better anytime soon.
Laurence Prusak consults to enterprises on matters of knowledge management, learning, and organizational development. His most recent book (with Tom Davenport and James Wilson) is What’s the Big Idea? Creating and Capitalizing on the Best Management Thinking.

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