May 2008

Leadership Development
What were you thinking?

The Law of Unintended Consequences rears its nasty head. It’s in the headlines and it’s hurting consumers in their pocketbooks. Biofuels sounded like the answer not that long ago. Now the world is seeing dramatic rises in the costs of corn and other similar commodities resulting in food riots in some parts of the world. Who knew?

The subprime crisis is causing most to lose investments and many to lose their homes. Cheap and available financing, often without the necessary safeguards, drove profits through the roof, until the bubble burst. Bear Stearns is no more and many other financial service companies are wavering. Who knew?

“If there is one thing that seems to underlie each crisis and emergency that fills our headlines, it is the lack of critical thinking skills in the executive suite and in the offices of those who advise them.”

The list goes on demonstrating the lack of common sense in many leaders in all sectors of the economy: political, profit and non-profit. If there is one thing that seems to underlie each crisis and emergency that fills our headlines, it is the lack of critical thinking skills in the executive suite and in the offices of those who advise them.

Executives and managers should have effective critical thinking skills that enable them to objectively evaluate their decisions from a 3600 perspective including the potential consequences that their decisions will generate. Major decisions should be linked with risk-management strategies that evaluate all of the risk factors and identify the possible consequences. In essence, they are asking, “What if?” questions and analyzing the possible results. While not all unintended consequences may be anticipated, most should be.

In most large organizations, executives will rely upon managers to conduct the analysis, while they will review the data and base their decision upon what is presented to them. Care must be taken that this information is not biased and executives must question the underlying assumptions and ensure that the information is not filtered in a way that makes one choice more desirable over another. When the dust settles it is the executive who will be held responsible for his or her decision, not the managers who prepared and biased their analysis.

Problematic decision making is a leadership issue when executives possess effective critical thinking skills and are presented with a solid and objective analysis and then make decisions based upon personal or political agendas. In some instances the consequences of the decision may place the executive into an untenable position. So they make their decisions in a manner that allows them to avoid damaging their personal reputation or pride.

However, faulty decision making becomes an ethical issue when the executive makes decisions based upon their personal gain rather than for the good of the organization. Quite often, greed, personal profit, or political agendas and perspectives motivate these choices.

As heads of learning, you may not have the personal ability to impact decision making above your pay-grade, but you do have the authority to ensure that effective training is applied and reinforced within the organization in critical thinking, leadership and ethics. Managers and executives must be thoroughly schooled in these disciplines and clearly understand the impact that each has upon their decisions and the consequences to their organization.

Those who believe sound decision making is of little importance need to only look at Enron, Arthur Andersen, and Bear Stearns. Faulty decisions cost employees their jobs and often their retirements. In each instance, critical thinking, leadership and ethics (or a lack of these elements) placed the company, shareholders and employees in dire, unfortunate and unnecessary straits.