CHAPTER
4

WHY BLINDSPOTS ARE AN EVER-PRESENT CHALLENGE

Blindspots are often found in close proximity to a leader's strengths. As a result, they can reappear over time as a leader does what he or she does best. This pattern is evident in the life of Michael Bloomberg. He is one of the wealthiest people in the world, with an estimated worth of $25 billion. In his business, public sector, and philanthropic endeavors, he is known for being decisive, determined, and successful. Early in his career he was let go from an investment firm after it was acquired. With his severance pay, he founded the company that would make his fortune. He noted years later that “when I got fired from Salomon Brothers nobody offered me a job and I was too pig-headed to go look for one, so starting a business was a relatively simple idea. I'd love to romanticize and tell you God appeared and said ‘Start a company!’ but that wasn't quite the real world. I'm not one of those people who go in for self-analysis. I made the decision to do it and I don't remember having any regrets.”¹

Bloomberg, looking for new challenges after his company became a success, entered public life and was elected mayor of New York City, an office he held for three terms. Toward the end of his tenure, the city was confronted with the impact of tropical storm Sandy. The once-in-a-century hurricane came ashore just south of New York City and caused unprecedented damage across the region. It flooded neighborhoods, knocked out power to thousands of homes, and closed airports, roads, and subways. Bloomberg was praised for his leadership in organizing the city's response to the storm and working tirelessly to prevent the loss of human life.

After the storm passed, Bloomberg had to decide whether to go forward with the New York City Marathon. This was not a minor consideration as the race is the largest in the world, with over forty-five thousand runners, thousands of volunteers, and an elite group of corporate sponsors. Bloomberg felt the race would be a symbolic victory for the city and a real boost to its economy (bringing in over $350 million in race-related spending). He noted that the man he replaced as mayor of the city, Rudy Giuliani, made the right decision in 2001 when he held the marathon just two months after the 9/11 terrorist attacks. The race served to pull people together and show the city's gritty determination to move forward in the face of a tragedy. Bloomberg believed the same would be true after Hurricane Sandy.

Bloomberg, however, was soon reading newspaper headlines criticizing his decision to push ahead with the race—including, “With Can-Do Stance on Marathon, Mayor Misreads NYC.” He was faulted for dedicating resources to an athletic event just one week after the most severe storm in the city's history. Bloomberg argued that the race would not divert any of the support going to storm victims. Still, resistance to the race only increased. One storm survivor said about Bloomberg, “He feels like we should carry on with our lives, even though people have lost everything.”² Another observed that the bodies of those killed in the storm were still being found on Staten Island where the marathon would begin. Social media also came alive with negative messages, increasing from ten thousand to fifty thousand in the week before the race. One person noted sarcastically, “Worst storm ever. No electricity. No gas. No subways. Hey, let's host a marathon!!!!”³ Soon, runners were dropping out of the race because they felt it was wrong to run with so much suffering around them. Some volunteers and sanitation workers went public with their desire to help storm victims rather than work on the marathon.

Bloomberg was comfortable taking positions that others opposed. He prospered in business, in part, because of his tenacity. As mayor, he had shown the same resolve across a range of issues. A visible example was evident in his appointment of a new chancellor for the New York City school system. Bloomberg was investing much of his own political capital in revitalizing the city's educational system and wanted bold leadership. His candidate, Cathleen Black, had no experience in leading educational institutions but, instead, came from the private sector, where she was a successful magazine executive. Bloomberg believed that, like himself, she would effectively manage the transition into the public sector and bring needed capabilities to her role. He went ahead with the appointment despite objections from many in the educational profession and parents with children in the city's schools. Bloomberg's new school chancellor, in her first weeks on the job, made a number of controversial public statements that showed a lack of awareness of the political landmines that exist for those in leadership positions in New York City. Her support in the community, already at historical lows, eroded further. After only three months, Bloomberg removed her from the position and appointed a new leader, one with extensive educational experience. Bloomberg took responsibility for his failed appointment and said, as was his way, that it was now time to move forward.

Bloomberg took a similarly aggressive approach to the marathon in pushing ahead with what he believed was in the city's best interests. However, in a surprise announcement, he canceled the marathon just a day before the race. Bloomberg stated that the event had become divisive and a distraction from the city's important storm recovery efforts. His initial inability to see the downsides of staging the marathon is understandable in light of his leadership approach. He had little patience for people who, in his mind, were stuck in the present. This belief was closely tied to the story of his own life, as he had focused time and again on pushing forward. Bloomberg's can-do approach served him well, but it also had a downside that resulted in his making mistakes as mayor that could have been prevented. He is a case study of a leader whose reoccurring blindspot was closely linked to his towering strength. For this reason, he repeated the same mistake in a variety of situations as he replicated what had worked so well for him in the past. Bloomberg's story also illustrates the important interplay between a leader's blindspot and the demands of a particular leadership role. That is, each leader has a unique set of attributes and experiences that produce blindspots in relation to a particular set of demands placed on that leader. Bloomberg's reoccurring blindspot was an inability to empathize with others—he knew the best path forward and trusted his own judgment. He would force his will on them to achieve what he believed was needed. This was generally not a problem in his business; in fact, it was a strength. It became an issue once he became the mayor of a city that operated by a different set of rules.

THE TENACITY OF BLINDSPOTS

Michael Bloomberg, as with many of the cases in this book, illustrates how even the best leaders have tenacious blindspots. This chapter describes the factors that give rise to blindspots and make them an ongoing challenge:

• Experience gaps
• Information overload
• Emotional bias
• Cognitive dissonance
• Misaligned incentives
• Hierarchical distortions
• Overconfidence

Experience Gaps

A leader's history is often missing particular experiences that make blindspots more likely in specific areas or situations. In this case, leaders don't see, or fully understand, what they have never experienced. More specifically, past experiences result in leaders’ extrapolating from what they have experienced in the past to what is needed in new situations, particularly when they or their firms have achieved successes using a particular approach. In so doing, they assume that they are now facing a similar situation when, in fact, the demands are quite different. Take the leader who has worked only in the United States; he or she will have difficulty understanding, at a deep level, the way some other areas of the world operate. This is particularly true in regard to markets that are very different (for instance, in China, where a number of US firms have stumbled). When a leader recognizes the gap in experience, he or she will not jump to the assumption that other markets operate in a manner similar to US markets. Different functional backgrounds can have a similar effect, as leaders grow up in a particular group and then find themselves, as they are promoted, leading a wider variety of people and groups. I worked with a leader who was trained as an engineer and then promoted into general manager positions. He was initially frustrated by what he saw as inefficiency in some of the new functional groups that now reported to him (such as sales, marketing, and R&D). After several months, he realized that he was the one with the problem in that his engineering mindset and approach were preventing him from understanding other functions and their models of operating. He recognized, in particular, that bringing an engineering mentality to the development of marketing strategies was not particularly helpful. He took time to learn how these other functions operated and, ultimately, came to look at his business less as an engineer and more as a business leader.

Another example of experiential gaps was evident in my interactions with an executive who worked for decades in a large technology firm. He then moved into a leadership role in a much smaller, faster-growing start-up technology firm. He assumed that because both firms were in the same industry, the similarities in their business models would be high. In reality, there were major differences in how each operated. This leader was soon encountering resistance in his new firm as he applied big-tech approaches to the start-up. In particular, he was sure that his resource-rich, staff-heavy approach to growing the business was needed in the new firm (which he saw as operating in a chaotic and unprofessional manner). He eventually saw the limitations of his past experiences in relation to his new environment and became savvier as he learned the difference between a mature technology firm and one that was in a rapid start-up mode.

Information Overload

A second factor in the persistence of blindspots is the tendency of people to simplify an overly complex world in order to focus on tasks that require their full attention. The total amount of cognitive energy we have is limited, and it is adaptive to pay attention to some issues while ignoring others. In so doing, people automate or make habitual many of the decisions they make because the energy required to pay attention to everything going on around them would soon overwhelm them. A famous study documented the impact of focusing on the achievement of an important task in relation to a more general awareness of one's environment. Researchers in this study asked people to observe a video of two teams of people passing a basketball. In one version of the study, those watching the video were asked to keep track of the number of passes made by one team to the other. The video, however, contained a surprise. A person wearing a gorilla suit walked into and out of the area where the teams were passing the basketballs. Afterward, people reported their tallies and then were asked if they had noticed anything out of the ordinary in the video. In most groups, 50 percent of the people did not report seeing the gorilla at all. The failure to see the gorilla was attributed to people's failure to attend to extraneous factors while engaged in a challenging task (an omission that is sometimes called inattentional blindness).⁴ Applying these findings to leadership, it is easy to see why a leader may lack awareness of potential threats or weaknesses as he or she focuses on more immediate and often more important tasks or goals. This is particularly true when a leader is facing time pressures to complete a task or achieve a difficult objective.

A related approach that people use to manage information overload is to look for information that confirms their existing beliefs and to ignore or discount that which does not. Psychologists call this confirmation bias. This occurs when you search for and pay attention to information that supports what you already hold to be true. This is not simply being passively receptive to that which confirms your view but actively searching for such information. For instance, research has shown that people buy books that confirm their view of a particular political leader (positive or negative). In this regard, they were seeking out, among all the books available, those that confirmed their beliefs about that leader.⁵ The same happens across a range of situations in business, particularly when people are confronted with data that is ambiguous or contradictory.

Emotional Bias

A third factor to consider is how an emotional investment in a particular outcome can influence how an individual views a situation, with the “facts” being slanted to support a preferred outcome. Sydney Finkelstein gives an example of this pitfall in describing the decline of Wang Laboratories.⁶ An Wang founded his company in 1951, and it was one of the top computer companies in the world by the 1980s. The company, benefiting from its founder's technological brilliance, was first to market in a number of technical areas, with the most successful being the firm's word processor. Unlike a typewriter, Wang's device allowed users to store and edit text, and soon displaced typewriters across the United States.

An Wang then made a series of poor decisions that eventually destroyed his company. He refused to develop a personal computer even though it was within the reach of his company to do so. In addition, he would not support the operating system that IBM was establishing as the industry standard (and instead developed his own closed system). Wang's refusal was due, in part, to his belief that he had been cheated by IBM in the past over a technology licensing arrangement. His son noted that his father despised IBM and refused to collaborate with a company that he viewed as unethical. His emotional feelings about IBM, and his personal attachment to his own technological creations, blinded him to the realities of how the marketplace was evolving.

Another case of emotional bias is evident in how some investors viewed Bernie Madoff and the investment gains they believed he was producing. Max Bazerman and Ann Tenbrunsel, in their book on moral blindness, discuss how Madoff, whose deceit cost his investors billions of dollars, was operating in a manner that indicated he was perpetuating a massive fraud.⁷ The managers of some of the feeder funds that invested money with Madoff were warned that Madoff's financial results were suspect. But many of these fund managers, despite clear warnings, didn't want to see the evidence in front of them. They were making money, and their clients were happy with the returns they thought they were earning. They felt privileged to be able to invest with Madoff. In one tragic case, in which an investment manager was warned about Madoff, he didn't believe what he was being told and invested huge sums of his own as well as his friends’ money. Two weeks after Madoff was arrested, this individual killed himself in his New York office.

Cognitive Dissonance

Social psychologists have studied what occurs when one holds two conflicting views, particularly when those views are related to one's self-image. The term they use to describe this uncomfortable state is cognitive dissonance. The conflict is resolved through rationalizing one's beliefs or actions in a manner that sustains one's positive self-image. Consider the individual who views himself as an honest person but then engages in acts that could be seen as dishonest or unethical. This creates a conflict for the individual (“I'm a good person but I am acting unethically”). He or she will then change how he or she views the situation in order to uphold a positive self-image. This was the case with Lance Armstrong, who came to believe that he was not cheating by taking performance-enhancing drugs because a large majority of riders were doing the same. He also rationalized his behavior by coming to believe that his cancer had left him at a disadvantage over his competition, and thus he was leveling the playing field by taking performance-enhancing substances. He resolved the conflict between his own view that he was an honest individual and his behavior that indicated otherwise.

Recently, the CEO of the generic drug maker Mylan was discovered using his firm's company airplane to attend the concerts of his son, who was building a career as a singer. His firm had authorized the use of the airplane for the CEO's personal trips but the resulting publicity portrayed it as another case of a CEO abusing company perks. The Wall Street Journal ran a front-page article chronicling the various trips that the CEO had made using the company plane for himself and his son. We can't know what Mylan's CEO was thinking, but given the research on cognitive dissonance which suggests that people modify their interpretation of events in order to sustain a positive self-view, this CEO may easily have thought that the firm had done well under his leadership and he deserved to use to the plane to attend his son's concerts, given the value he had created for the company and its shareholders.⁸

The other point to draw from this story is that blindspots are self-reinforcing, as people start down a path and then feel they need to justify their actions. In essence, they become more committed to actions that may be suspect, or simply wrong, because of the need to justify what they did in the past. This occurs particularly when an issue is important, because it then has more impact on a leader's self-image as well as how he or she is viewed by others. Take, for instance, the leader who makes a bad acquisition and then continues to pour time and money into making it a success even though it is clear that a mistake was made and the best course of action is to shut it down. The research on cognitive dissonance suggests that this realization becomes even more difficult as the size of the deal and the personal investment of the leader increase.⁹

Misaligned Incentives

Compensation systems are designed to focus attention and effort within an organization, with the result being that people focus more on some areas than on others. For instance, a company may reward the achievement of quarterly sales targets and the aggressive management of budgets. However, it may have no formal metric for assessing customer views of the company and the products or services it provides. The result can be blindspots in particular areas. A vivid example of how reward systems can distort one's perspective is found in the famous Ford Pinto case. The Pinto, manufactured in the 1970s, was at one time the best-selling subcompact in the United States. The car was designed to compete against the Volkswagen Beetle and Chevrolet Vega in the growing small-car market. The company knew it had a problem due to a design that raised the likelihood of the gas tank exploding in a collision, even when the vehicle was hit at a relatively low speed. The emphasis in the company was on keeping costs down, and the fix would have resulted in the company's spending more money than it had determined would be needed to pay any legal suits that might arise. A different design would also have resulted in less trunk space, and trunk space was important in marketing the car. Safety was not viewed at that time in the firm's history as an important factor because, in a comment attributed to Ford's leader at the time, “safety doesn't sell.” Pinto's production design book, called the green book within the company, focused on factors such as cost, appearance, and comfort and put less emphasis on safety. A journalist who profiled what happened at Ford wrote:

Ford later agreed to recall 1.5 million Pintos and discontinued the car completely after ten years on the market. Over one hundred lawsuits were filed against the company. A number of factors contributed to the Pinto disaster, and Ford was not the only car company with safety issues. But one central element was the emphasis on sales over other considerations. We can assume that the reward system in the company at that time compensated leaders primarily on achieving those factors that were viewed as driving sales (cost, comfort, and so forth). In this case, the rewards, reflecting the larger culture, focused attention on factors other than safety. In regard to blindspots, some have argued that the leadership at Ford made a rational decision in regard to the costs versus benefits of changing the design of the car's fuel tank. Leaders allegedly knew that problems existed but did not respond. However, blindspots are often a case of not seeing the broader implications of the decisions being made and, in particular, the long-term consequences of those decisions. The cost in lives lost and resulting damage to Ford's reputation was far more extreme than anything its executives had anticipated.

Hierarchical Distortions

As an individual rises in a firm, the information that he or she receives is sometimes incomplete, distorted, or even false. This is because of a number of factors. First, leaders can become detached from the lower levels of their organizations, as time is consumed by corporate-level meetings and the needs of stakeholders (industry groups, investors, media, and the like). As a result, senior leaders rely more and more on secondhand information gained through a variety of people and systems (which will be explored in more detail in the following chapter). As we saw with Jamie Dimon in the London Whale fiasco, this presents risks for those in positions of power.

Second, some people defer to those in positions of authority and offer little or no challenge to the leader's beliefs and plans. Thus, a leader with blindspots may not receive contrary feedback because others are afraid of the consequences if they come forward with a contrary point of view. In some cases, this fear is warranted. I worked, with a senior executive who had a favorite team member whom he protected from criticism. If this individual failed to deliver expected results, he would rationalize the shortcomings. When other team members raised concerns to the leader, they were told they should stop criticizing him and instead offer support. The poor performance of this individual became an “undiscussable” with the team's leader.

Third, more powerful people generally pay less attention to less powerful people. Several psychological studies indicate that those with higher rank are less vigilant (than lower-ranking people) in monitoring what is occurring with others if those individuals are of a lower rank or status, and are less engaged when interacting with others of lower status.¹¹ One study found that higher-status individuals were more distracted when conversing with others, less likely to focus their gaze on them, and less likely to affirm them through nonverbal actions such as nodding one's head in agreement.¹² In short, these findings suggest that the more power and status people have, the less likely they are to pay attention to those below them and the less empathic they will be. In seeking to explain these findings, researchers suggest that having power makes one less dependent on others and thus less inclined to focus on them. The implication, in regard to blindspots, is that some leaders are less aware of how people below them are responding to them as leaders and, more generally, less aware of what is occurring in their teams and organizations.

Overconfidence

Perhaps the most important factor to consider regarding the persistence of blindspots is the tendency of people to overestimate their own capabilities. Psychologist David Dunning notes that a wide range of findings over numerous studies suggest that overconfidence is the norm in most people: “On average, people tend to hold overly favorable views of themselves. They overestimate their skill, their knowledge, their moral character and their place on the social ladder…. [T]hey even overestimate their ability to provide veridical and unbiased judgments about themselves.”¹³ One study found that 70 percent of the students surveyed in a large, nationwide poll said they were above the median in leadership ability. Only 2 percent rated themselves lower than the median.¹⁴ Another study, involving executives who had completed a 360 assessment survey, found that high-level individuals were more likely to have inflated views of themselves than those at lower levels were. In particular, those higher in the organization rated themselves higher on their level of self-awareness than did those who reported to them.¹⁵ The results from these studies suggest that most people have inflated views of themselves, and this proclivity becomes even more pronounced as one moves up in an organization's hierarchy.

Self-assured leaders can easily come to believe that their skills are the primary factor producing positive outcomes (rather than the contributions of many others, or even luck). These leaders can also believe their skills are applicable to a wide range of challenges, some beyond what they have experienced in the past. The risk is that they come to trust their own judgment, their intuition, to an unhealthy degree.¹⁶ This is particularly likely if they have not experienced failure in the past and have risen quickly into higher levels of authority. They gain confidence by following their instincts and proving their critics wrong. Such leaders can come to value their own beliefs over the views held by others, particularly those who hold views contrary to their own. Michael Maccoby describes a CEO he knew who was given feedback that he needed to be a better listener. He said that he saw no need to change his behavior—that he did not become a CEO by listening to others.¹⁷

One of the risks of arrogance is evident when leaders believe they are immune from traps into which others have fallen. Bill Gates notes, “Success is a lousy teacher. It seduces smart people into thinking they can't lose.”¹⁸ This can result in decisions or behaviors that are misguided or worse. Some will take risks, on a personal and professional level, that look foolish in retrospect. This type of behavior is evident in David Petraeus, who recently resigned as head of the US Central Intelligence Agency. Petraeus was viewed by many as the best and brightest general in the US Army during his time in service. His landmark work in counterinsurgency techniques was superior to anything being done by his counterparts and was largely successful when used by the United States in the Iraq war. He was also very savvy in how he courted the press and managed the political complexities of Washington, DC. After leadership stints in Iraq and Afghanistan, he was promoted to become head of the CIA.

Less than one year into this role, it was discovered through an unusual chain of events that Petraeus was having an affair with the woman who authored his biography. The evidence of overconfidence, from a blindspots perspective, is twofold. First, Petraeus assumed that his affair would not be uncovered, despite intense public scrutiny of government leaders by the press and political operatives. He had to know of other leaders who were caught in similar situations. Second, he frequently communicated with his mistress, Pamela Broadwell, using a popular e-mail service. In fact, he thought he was being cautious by creating e-mail messages but not sending them. Instead, he saved them to his e-mail account folder, which Broadwell would then access and respond to. This naïve attempt at deception was being orchestrated by the most senior intelligence officer in the US government—someone who should have known the risks he was taking in an electronic age where files, once created, are almost always retrievable. One commentator described him as the “spy who trusted gmail.”¹⁹ The easy answer to the question of how Petraeus, a very smart and accomplished individual, could be so foolish is that his passions overruled his rational capabilities. This may be partially true, but it is likely that other factors, most notably a belief in his infallibility and a sense of entitlement, were at play.

A risk faced by arrogant leaders is that they may stop testing their own assumptions against objective data and cease listening to the thoughts of those who hold contrary points of view. Author Malcolm Gladwell describes this as a failure to believe that reality will not conform to one's expectations.²⁰ The more successful leaders become, the higher they rise, the more they are at risk of believing that they can bend reality to fit their beliefs or desires. In particular, they are often better than others at convincing themselves that they are correct even when they are not.²¹ The irony is that their intelligence can prevent them from seeing reality as it exists.

Blindspots sometimes have a more subtle but important impact in reinforcing a negative view of a particular leader—that is, these blindspots may not derail a leader and may even be trivial, but they can become symbolic of a leader's more general weaknesses. An example of this type of blindspot was displayed by Marissa Mayer in her early years at Google. Having spent time teaching at Stanford before entering the private sector, she adopted the practice of holding office hours as an efficient way to create time for those who needed to see her. Mayer requested that her colleagues sign up in advance, and she would see them on a first-come, first-served basis—meeting, given her fast pace, with as many as fifteen people in a ninety-minute period. She reportedly used this process not only for those in her own group but also with her peers. As you might imagine, some of those peers, who had as much experience and status in the company as Mayer, didn't appreciate waiting outside her office with ten other people in order to see her.²² She viewed office hours as a useful, even innovative, technique and didn't see the problem she was creating with her peers. Some inside the firm saw her approach as symbolic of a larger and more important issue—namely, they viewed her as putting herself above others and failing to work in a collaborative manner across groups.

WILLFUL BLINDNESS

Blindspots, as noted previously, are not deliberate attempts to hide from weaknesses or threats. Linda Ham of NASA was not seeking to avoid accountability by failing to look further into the foam strike on the Columbia shuttle. She failed to obtain necessary information, but there was nothing self-serving in her actions. However, there are cases in which a leader deliberately avoids obtaining information that could be potentially damaging to him or her. This occurs when a leader acts in a manner that suggests, “I don't know what is going on, and I don't want to know what is going on.” Willful blindness is not the focus of this book, but it deserves some attention in order to differentiate it from other forms of blindness. Events at Rutgers University in 2013 may be a case of willful blindness. We don't know what went on behind the scenes and thus can't draw absolute conclusions. But here is what we do know. The university's basketball coach was videotaped abusing his players during team practices, including throwing balls at them and shoving them when they didn't meet his expectations. He was also prone to using various slurs in an attempt to motivate them. Videotapes of the practices clearly documented the abuse. The coach's boss, the Rutgers athletic director, viewed the tapes and recommended to the university's newly appointed president that the coach be severely reprimanded. The decision was made, with input from a number of sources including legal counsel, to retain the coach but suspend him, including a loss of pay. Months later the practice tapes became public, resulting in widespread outrage. The university president reviewed the tapes and decided after only five minutes that the coach must be terminated. Several days later, the athletic director resigned.

The president was asked why he didn't review the tapes when first notified of the severity of the problem (several months before he watched the tapes). He stated that he was new and on a steep learning curve—he said he could barely find his way around campus. He also said it was a mistake, in retrospect, not to have viewed the tapes but could not explain his oversight other than to say he was consumed with other tasks. Some cynical observers noted that Rutgers was at the time negotiating to enter a new athletic division, the Big Ten, which would result in millions of dollars going to the university. They suggested that the president and athletic director didn't want a controversy during the negotiations on entering the division and thus didn't fire the coach (or make the tapes public) at that time. Critics also suggested that the president didn't initially view the tapes because he didn't want to be forced to be held accountable if he didn't fire the coach after viewing them. As in many of these situations, we don't know what the president was thinking other than what he has said publically about his own intentions. To date, no one has indicated that he made statements to them in private that implicate him in any deliberate deception or ethical wrongdoing. However, we need to question, at the very least, why he didn't look more deeply into an issue that had the potential for significant repercussions.²³

OVERCOMING BLINDSPOTS

The following chapters offer pragmatic advice on gaining self-knowledge in overcoming the factors that produce blindspots. The best leaders develop a range of compensating mechanisms that fit their personalities and the company cultures in which they work. In many cases these leaders don't fundamentally change the way they think, but instead develop warning systems that surface important weaknesses and threats. Here is an overview of the five mechanisms that are explored in detail in the next section of the book:

1. See it for yourself. One of the pitfalls facing leaders in large organizations is losing touch with customers and employees as they rise to higher levels of authority. As a result, leaders can easily make assumptions that are inaccurate owing to the distance between their day-to-day experiences and what is really going on in the firm. There is a popular TV show called Undercover Boss that places CEOs, in disguise, into lower-level jobs in their own companies so they can better understand what is really going on in their firms. The premise of the show is that the CEOs being profiled are always surprised, usually in a negative manner, by what they find. In particular, they often find that senior management and company polices are getting in the way of employees doing a good job. While the show is somewhat contrived for dramatic effect, the concept of senior leaders getting out of their offices and working directly with the customers and employees has merit. Leaders should strive to have ongoing direct contact with customers, frontline employees, and even competitors.
2. Seek out disconfirming data. Leaders will sometimes seek out data that confirm their own beliefs and will discount or ignore contradictory data. They are best served by establishing metrics and review processes that will refute their erroneous beliefs and help them avoid the trap of being overly optimistic. For instance, I find that many firms track budget performance but are much less likely to track market share performance or other key metrics that assess success in relation to the competition. Leaders who meet their budgets can incorrectly believe they are successful when, in fact, they are in decline in relation to competitors who are taking market share either in core areas or in adjacent areas that will become more important over time.
3. Develop peripheral vision. I use the term peripheral vision to refer to the ability of a leader to surface and prioritize otherwise weak blindspot warning signs—those pieces of data or points of view that would in most cases fail to warrant attention. Savvy leaders have an ability to recognize subtle or contradictory data and to understand which items are worthy of their attention and follow-up. This soft skill is among the hardest to master, particularly for hard-charging leaders—and one of the most important in surfacing potential blindspots. It requires reading between the lines in what people say, or don't say, in meetings and understanding the gaps or issues in the data presented by those reporting to the leader. Part of this skill is learning what questions to ask and when to ask them. A case in point was the situation with the space shuttle Columbia, where there were subtle trouble signals that Linda Ham, the program manager, failed to detect. Specifically, she didn't follow up with those closest to the foam strike assessment to determine if they had concerns; instead, she assumed that they would surface their concerns in meetings. The problem with this assumption was that NASA meetings were run in a formal and hierarchical manner that discouraged dissent. While Linda Ham's assumption that lower-level engineers would speak up if they had concerns was logical, it was a poor reading of NASA's culture and its impact on restricting the flow of information upward. Ham was part of that culture and didn't understand how strongly it silenced concerns from those at lower levels of the agency's ranks.
4. Find trusted advisors. The recognition that blindspots are the norm means that leaders need others to provide them with ongoing feedback. Part of the skill in addressing blindspots is to develop a trusted cohort of people who can offer specific feedback to a leader. Most senior leaders need a few savvy internal or external people to provide feedback on the strategy they are advancing. Similarly, the leader needs a few people who can know what is occurring within his or her organization in regard to a range of issues from progress on particular initiatives to views of a new strategy coming from the CEO's office. The best CEOs use their boards as resources to help think through challenges and as sources of ideas. Steve Jobs, for instance, took the advice of Mickey Drexler, Apple board member and ex-CEO of the Gap, to build a prototype of the retail store he was planning before he moved forward with his retail initiative. Less effective leaders want to keep their boards at arm's length; they want a group designed to rubber-stamp what the CEO wants to do. While having an engaged board is not always easy, it does provide a means of ensuring that the CEO or the management team is not behaving in self-defeating ways. The best leaders cultivate these relationships, and ask for feedback on a regular basis. They may not act on the feedback, but they do want to understand the views of others in relation to their own impact as leaders and the vulnerabilities they face.
5. Promote productive fights. The philosopher David Hume observed that “truth springs from arguments among friends.” Leaders need to test their ideas and discuss emerging threats with a diverse team of individuals who respect each other's experience and abilities but are also willing to push each other to reach the best outcomes on the truly critical issues. These are the vital few issues that will have a significant impact on the success of an enterprise. In many situations, people focus on less important issues, in part because they are easier to deal with. I also see many teams where people haven't learned how to have a good fight (one that focuses on the best outcomes and stays clear of personal agendas and egos). A leader should also strive to create a team of diverse views—if everyone thinks alike, there are few areas for disagreement or debate. The skillful leader staffs his or her team with superior talent and then creates a team culture in which differences can be productively explored.