Blindsided - How to Avoid Making Bad Decisions
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21 Febuary 2012
'Blindsided'
examines some of the most dramatic crises of recent times and tells you
how to avoid the next big disaster that will invariably head your way.
It will be interesting to see if the worlds financial markets
view the 130 billion euro (£110 billion) Greek bailout as a
'significant step' towards resolving the eurozone crisis in a deal that
will see the country reduce its debts from 160 per cent of GDP to
around 120 per cent by 2020.
You would hope that as management thinking is about seeking to
rationalize the business process, informed by decisions based on proven
facts and data to reduce risk and improve profitability, that success
would be likely. However, if this model works so well how come we were ‘Blindsided’
and didn’t see the huge banking collapse coming in the first place?
I Didn’t See That Coming
In his new book, ‘Blindsided,’ Jonathan
Gifford takes a compelling look at some of the most dramatic business,
social and economic crises of recent years: from the Dot-Com Bubble to
the Credit Crunch, from the collapse of Enron to worldwide riots and
revolutions.
As a businessman, historian and author, Gifford is well placed
to analyse the human aspects of leadership and management. In ‘Blindsided’
he demonstrates that organisations and governments are far from
rational, often unpredictable and make decisions where logic is
replaced by emotion, split-second calculations and meaningless context.
We then rationalise these decisions to suit, and as a result can be ‘Blindsided’
with tragic consequences. Examples include the rash Dot-Com investments
of the 1990s, to the madness of unregulated derivatives of
mind-boggling complexity in the American sub-prime market that led to
the current global economic downturn.
Man Made Disasters
Due to the human capacity for self-delusion, Gifford explains
how we are caught up in booms and then ruefully contemplate the
aftermath. We develop theories about free markets and social systems
and are amazed when these turn out to be flawed. Unexpected
consequences have included the Arab Spring turmoil in North Africa, to
current unrest in Greece.
It is even more depressing when you consider our frailties
from an historical perspective: from the Oklahoma land rushes of the
late nineteenth century, the ‘Dust Bowl’ ecological disaster of
America’s Great Plains in the 1930s, several flu epidemics and more
cases of civil unrest than I care to mention. You end up shaking your
head and muttering ‘will we ever learn.’
Disaster Management
Gifford argues that to succeed we need to plan for the
unexpected, allow customers to act irrationally and build human
tolerance into business plans. History has taught us that sane and
successful people can be swept up by euphoria, are prone to mass
delusion and can succumb to greed. In fact many G-20 policies continue
to ignore the reality of changing weather patterns and dwindling
resources.
The book’s conclusion is challenging and claims that we may be
‘hardwired to fail’ citing recent developments in psychology and
neuroscience to confirm that our decision-making process is a long way
from the model of calm and rational thought that we fondly believe it
be. Certainly when reading ‘Blindsided’ I
remembered that Winston Churchill once said ‘those who fail to learn
from history, are doomed to repeat it.’ Unfortunately, due to human
nature and that economies move in cycles of boom and bust, I doubt this
will change.
About the Author
Keith Appleton JP, BA(Hons),
N.Dip.M, MInstLM has over 15 years experience within the public and
third sector developing high performing teams in a managerial and
strategic leadership role. This is underpinned by his academic
experience as a visiting lecturer and membership of the UK Institute of
Leadership & Management. Article original
published on Suite101.
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Article Published/Sorted/Amended on Scopulus 2012-03-06 11:17:20 in Personal Articles
