Tuesday, April 13, 2010

Denial

"Denial: Why Business Leaders Fail to Look Facts in the Face -- and What to Do About It" is the title of Richard Tedlow's new book. Last, night I had the pleasure of hearing Professor Tedlow speak about his book. He divided his book into to parts: those who got it wrong (e.g., Henry Ford continuing to make one model car and only in black) and those who got it right (e.g., James Burke, then CEO of J&J during the Tylenol poisonings - remember that?). He discussed the man who tried to point out the error in Henry Ford's thinking (after 8 pages of groveling). That man was fired. He also discussed how Andy Grove, then #2 at Intel, suggested to Gordon Moore, then CEO and Chairman of Intel, that Intel exit its MAIN business, memory, in the late 1980's. It's no surprise that organizations full of "yes-men" don't thrive, and it's also a rarity to have such organizations.

I had the pleasure of hearing Jamie Dimon speak about the advice he received from a CEO shortly before Jamie assumed the CEO role at BankOne. The other CEO said, "If you have ten guys reporting to you, make sure that one of them will always tell you the truth, no matter what." Jamie's response was, "If I only have one guy who will tell me the truth, I am going to fire the nine other guys and find nine others who will tell me the truth."

This all seems like common sense, but it is so... uncommon.

I am looking forward to devouring "Denial" even though I am sure that parts of it will be disturbing.

3 comments:

Karil said...

As a CEO ...finding those with a sense of reality and wisdom is key ..send them my way

mikelanza said...

Back in 1991, I worked as a contractor at GO Corporation, a huge Kleiner/Doerr startup with a pen-based operating system. On my second day there, I got to use one of their demo units. I was appalled. It was totally obvious to me that the device + OS was unusable. Still, Kleiner/Doerr and AT&T pissed away more than 50% of the total investment in GO after that. Either they had never tried to use a GO-powered device, or they were in denial. There's no way anyone who used one of those things could imagine someone wanting to buy one.

Still, in his book on the saga of GO called "Startup," founder Jerry Kaplan blames IBM. Sad...

terraterwilliger said...

My husband, the Marxist, introduced me to the Iron Law of Oligarchy. It says everything you need to know about denial and groupthink.

He gave this to me after I spent some time at Microsoft trying to build an online service, to set the context.

http://en.wikipedia.org/wiki/Iron_law_of_oligarchy