Judgment Calls. Thomas H. Davenport

Чтение книги онлайн.

СКАЧАТЬ of moves that single-minded enterprises make badly. Missteps occur in every sphere of business and organization—in matters of strategy, innovation, operations, and people—most of which are minor, and some of which have huge consequences.

      Strategy making is probably most rife with poor judgment, though the flawed deliberations behind most dumb decisions never come to light. Sins of omission—roads foolishly not taken—surely outnumber sins of commission. When these do become known, they become sources of acute embarrassment, even to leaders long acknowledged to be great, as Ken Olsen, the cofounder and longtime CEO of Digital Equipment Corporation, found out.

      Olsen guided the company to dominance of the minicomputer category over its first thirty years.⁵ As a testament to his vision, Digital became the second-largest computer company in the world after IBM. But by the mid-1980s, it became obvious to most observers that the world was moving on to personal computers.

      Not to Olsen, however. He doggedly maintained that the mini remained the next big thing. His words are amusing at this point: “Customers don't want a computer that sits on a desk. Customers want computers that sit on the floor.”⁶ Even if they did want computing on their desktops, Olsen argued that “most people in an organization want terminals.”⁷ Olsen also stuck by Digital's proprietary VMS operating system while the rest of the world shifted to Unix and Windows.

      With a leader with his head in the sand, Digital couldn't stay in business for long. By 1998 the company was sold to Compaq for $9.6 billion, well below its peak annual revenues of $14 billion.

      Olsen was surely not the first great industrialist who erred by believing his gut was unimpeachable and his vision reliable. Henry Ford, who built one of the world's largest and most successful car companies, committed his share of bad judgment, though he obviously also made numerous good decisions. He perfected the assembly line, virtually defined vertical integration, and doubled the wages of his workforce to $5 a day, thus making them much more loyal as employees and consumers of his cars. But Ford also made some truly awful decisions. He stopped improving the Model T, declaring it “already correct” and the only car anyone could ever need—and it rapidly lost market share in the 1920s. He decided to build a prefabricated industrial city in the rain forest of Brazil that he called Fordlandia, intending it to be a cheap source of cultivated rubber for tires. But according to historian Greg Grandin, Ford was too distrustful of experts to consult even one on the subject of rubber trees.⁸ It was an agricultural and social disaster, was sold at a $20 million loss, and rotted in the jungle. Worst of all, he allowed his name to be used for anti-Semitic causes and arguments, and met with associates of Hitler from Germany.

      Even the late Steve Jobs of Apple, the contemporary decision maker most acclaimed for his golden touch over the last decade or so, had moments when his judgment failed him. In the 1980s, he hired John Sculley to succeed him as CEO of Apple, and Sculley presided over a period of slow growth and product missteps in the ensuing years. Jobs later commented, “What can I say? I hired the wrong guy. He destroyed everything I spent 10 years working for, starting with me.”⁹ Jobs sold all of his Apple stock when Sculley pushed him out, which cost him billions. Few would call Next Computer, the start-up he founded during his hiatus from Apple, a success. And when he came back as CEO, he allowed the backdating of stock options. Jobs certainly redeemed himself with a string of fantastically successful products from Apple—and as one of the company's founders, he got a bit of slack for a bad call now and then—but he was hardly immune to faulty judgment. One factor that Jobs attributes his good decisions to was greater reliance upon others. In a summary of a 1997 interview, a New York Times article published after he resigned for health reasons in 2011 noted:

      In his early years at Apple, before he was forced out in 1985, Mr. Jobs was notoriously hands-on, meddling with details and berating colleagues. But later, first at Pixar, the computer-animation studio he co-founded, and in his second stint at Apple, he relied more on others, listening more and trusting members of his design and business teams.¹⁰

      Why the Fixation on Great Men?

      Human judgment, it appears, is frail and fettered no matter which humans the judgment comes from. Even the greatest of leaders can't get out of the way of their own egos. Neuroscience and behavioral economics now tell us that all humans fall into a common set of decision traps or cognitive biases—from, for example, anchoring (overreliance on familiar but irrelevant information for a decision) to the zero-risk bias (a penchant to reduce a minor risk to nothing, but missing the opportunity to reduce proportionately instead a much bigger risk).¹¹ A recent article suggests that while leaders may be able to identify the cognitive biases in others' decisions and recommendations, they have virtually no chance of seeing their own.¹²

      Yet no matter how many mistakes are made by individuals, the single leader and decision maker prevails as a paradigm. History still puts the Great Man (or, less common, the Great Woman) on a prominent pedestal. Management theorists still praise the solitary, heroic leader. Indeed, there's a long philosophical tradition behind the Great Man theory.

      Thomas Carlyle, the nineteenth-century Scottish philosopher, began his 1840 book, On Heroes, Hero-Worship, and the Heroic in History, with these words:

      We have undertaken to discourse here for a little on Great Men, their manner of appearance in our world's business, how they have shaped themselves in the world's history, what ideas men formed of them, what work they did.

      Carlyle, who was known earlier in his career as a curmudgeonly and satirical writer, abandoned all pretense of satire when writing about Great Men (we'll continue to capitalize the term in a somewhat satirical fashion). Later in the introduction to the book, he writes worshipfully:

      One comfort is, that Great Men, taken up in any way, are profitable company. We cannot look, however imperfectly, upon a great man, without gaining something by him. He is the living light-fountain, which it is good and pleasant to be near. The light which enlightens, which has enlightened the darkness of the world; and this not as a kindled lamp only, but rather as a natural luminary shining by the gift of Heaven; a flowing light-fountain, as I say, of native original insight, of manhood and heroic nobleness;—in whose radiance all souls feel that it is well with them.¹³

      Carlyle already sounds a bit nutty in his enthusiasm for Great Men, and this is only page 1 of his book. Indeed, Carlyle's views increasingly diverged from those of polite society as he aged. He maintained that democracy was an impossible form of government, and that slavery should never have been abolished. Adolf Hitler found Carlyle's biography of Frederick the Great (a generous gift from Joseph Goebbels) inspiring and comforting in his last days in the Berlin bunker.

      Fortunately, most of Carlyle's ideas have been left behind, but not the Great Man notion. It lives on in both theory and practice.

      That is, of course, because it is such a convenient fiction in some ways. In a society that depends on its members' taking initiative and suffers when they indulge in free riding, it helps to hold up role models and dangle the incentive of fame and fortune for individual achievement. As David Ogilvy was fond of saying, “Search your parks in all your cities/You'll find no statues of committees.” There is no denying, too, that most would rather listen to a good yarn about a maverick taking on the world and beating the odds. As much as we might revere a studiously deliberative body—like the Supreme Court—there tends to be little romance in its triumphs.

      Thus we see publishers shelling out huge advances to leaders willing to tell their tales—as GE's former CEO Jack Welch did in Jack: Straight from the Gut and, more recently, George W. Bush did in Decision Points. But it isn't only the public at large that hangs on such words; many a leadership scholar has written almost as worshipfully as Carlyle about the charismatic power and decision-making genius СКАЧАТЬ