Business Daily from THE HINDU group of publications
Monday, Nov 23, 2009
ePaper | Mobile/PDA Version | Audio | Blogs

The New Manager
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

The New Manager - Books
Columns - Manage Mentor
Blinkered leaders can be ignorant


As a leader, scanning the environment is necessary but insufficient; you should be able to make sense of the signs, says Michael Jarrett in Changeability: Why some companies are ready for change – and others aren’t ( www.landmarkonthenet.com).

While the detection of new trends and subtleties in the environment is often a stimulus for change, those at the top must have the ability to interpret the information they pick up in corporate corridors or through industry networks and grapevines, Jarrett insists.

He cites experiments conducted by Nobel economist, Daniel Kahneman and Amos Tversky, on how far people are willing to explore ideas outside of their personal mindsets.

“When presented with puzzles to stretch their critical thinking, most subjects tended to choose options that confirmed their ‘natural’ or untested bias rather than those that offered disconfirming information. It seems we naturally operate with blinkers on most of the time.”

The majority of leadership teams fail to recognise or remove these blinkers, the author rues. “They remain trapped by their collective mental models and psychological anchors; they encounter the problems of bounded rationality, where knee-jerk reactions lead to poor decision-making.”

(For starters, Wikipedia informs that in game theory, ‘bounded rationality’ is a concept based on the fact that the rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions.)

An example, Jarrett mentions, is of the iconic IT company, the elephant! “IBM’s arrogant view that no one got fired for buying Big Blue led to its downturn in the 1990s as the PC world took over mainframes. It took years for the company to recover.”

Recommended read for managers.

D. Murali

BookPeek.blogspot.com

More Stories on : Books | Management | Manage Mentor

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Why becoming obsolete should be part of core strategy


Learning from the Indian experience
Blinkered leaders can be ignorant




The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line