Some of what you think that you know is fine, but some isn’t. Here’s the rub. You don’t know which is which! In a rapidly changing high stakes world this simple truth holds the key to your fate.
Leadership and The Illusion of Knowledge
Stephen Hawking puts it very well. “The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.” In the business world the data to support that insight are compelling. Recent research by Booz & Company reported in Strategy + Business found that 80% of the loss of shareholder value is the result of a single cause, mismanagement of strategic risk. More anecdotally, Jay Goltz writes in The New York Times, “it’s simply a matter of denial or of not knowing what you don’t know.”
It all boils down to the same thing. The pitfalls that are most likely to undermine your success are failures in knowledge, and you should have seen them coming!
First and foremost a leader’s job is to make the strategic decisions that carry an organization successfully into the future through what are often treacherous waters. But decisions can be no better than the knowledge upon which they are based. Bad knowledge leads to bad decisions, and bad decisions have bad consequences.
When disaster strikes it is usually because someone in charge didn’t recognize that the light at the end of the tunnel was in fact the headlight of the oncoming train.
Psychologists and Stephen Hawking might talk about “The Illusion of Knowledge,” but that is far too polite a term for this brutal truth. Let me put it more bluntly.
Some of what you think that you know is reliable, but some is nothing but a W.A.G. – a Wild Ass Guess. Your fate depends on your ability to tell which is which.
Confirmation Bias Reinforces Poor Knowledge
As if the illusion of knowledge weren’t enough, to make matters worse we hold onto our W.A.G.s with everything we’ve got. We are quick to notice things that seem to confirm our ideas, but are more than happy to overlook or rationalize away those inconvenient indications that we might be wrong.
I’m not being judgmental. Confirmation bias and the illusion of knowledge are wired into your brain; they are as natural as breathing. But in the business world they are a one-two punch.
Most of the time we only find out about a wild ass guess when we trip over it while running at full speed. We rely on something that we think that we know but it lets us down just when it matters most. By then it is too late.
W.A.G.s are the Worst Enemy You’ve Got
Once you know where to look for W.A.G.s they aren’t that hard to recognize. Some W.A.G.s are nothing more than assumptions that we make without even realizing it. Others are a part of the landscape, slipping unnoticed into our minds as groupthink, corporate culture, or the zeitgeist of our business or industry.
Still other W.A.G.s come from wishful thinking or perhaps the appeal of an easy solution that we should have known was too good to be true. And then there is complacency. If it worked that way last year, surely it will work that way again this year? Right? Right?
The list goes on, but regardless of the guises they wear in one respect all W.A.G.s are the same. W.A.G.s can fool you into believing things that just aren’t true. Restating that earlier statistic, four out of five failed businesses fell victim to their own W.A.G.s.
Whether you are a small entrepreneur or a Fortune 500 CEO, W.A.G.s are the worst enemies you’ve got. The good news is that it doesn’t have to be that way… but that’s a topic for another article!
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Dr. Jeff Hester is an internationally known astrophysicist, and was a key player in the repair of the Hubble Space Telescope. One of his images was recently selected by Time Magazine as one of the 100 most influential photographs in history. Dr. Hester has spent his career with one foot on the boundary of our knowledge of the Universe, and the other foot in the nuts and bolts of making complex projects work. These days he is working with companies and organizations who are up to the challenging of looking reality squarely in the face.
For more information visit: www.jeff-hester.com