This is an interesting article and interview with Tedlow, the author of “Denial: Why Business Leaders Fail to Look Facts in the Face-and What to Do About It.” The author talks about the impact of denial which controls CEO’s minds and actions, though they don’t admit it, on their organizations and companies. He defines denial as “the unwillingness to acknowledge and deal with reality, or “knowing with not knowing” or “seeing but not seeing”. No matter how he defines it, Tedlow argues that the problem is “ubiquitous” in today’s business environment. He discussed cases of denial from the US economy and history such as GM, Ford and A&P.
In Jim Collins best-selling book ‘How the Mighty Fall‘, he concluded that the denial exists as a step towards falling, and was part of the five stage of the ‘Mighty Fall’; it is the Denial of Risks and Perils. Once executives stop listening, become arrogant, and wholeheartedly blinded with ego, deaf by waves of appreciation and intensive press lights and statements, they stop comprehending and deny reality checks. The reality checks that would save them and their organizations from damages, that are most-likely, long-lasting for ages!
One of the insightful parts of this discussion is the following, while you can read the full article at HBS here:
“Q: How can managers without executive authority spot the warning signs of denial and help reverse the process before it’s too late?
A: It is often middle managers who are best acquainted with new realities. As Andy Grove has noted, these are the people who are out on the front lines while top management is ensconced at the home office, cushioned from the daily reality of the rough-and-tumble of the marketplace. “Snow,” he wrote in Only the Paranoid Survive, “melts first at the periphery.” Problems, in other words, appear initially at the borders.
Unfortunately, when middle managers actually raise these problems—especially those that contradict the firm’s prevailing assumptions and conventional wisdom—they are often ignored, or worse. Henry Ford, for example, fired the executive who dared “speak truth to power” about Ford’s Model T myopia—and this man, Ernest Kanzler, was his relative! (He was the brother-in-law of Ford’s only child, Edsel.)
A firm that deals with bad news by literally or figuratively dismissing the person who bears it is both in denial and in trouble. Not only will that news go unheard but potential truth-tellers will quickly learn to keep quiet. Or get out.”
Mouaz Aref Al-Zayyat