I have been thinking for a while why smart managers make dumb decisions. After a lot of reading on this topic and going through real experiences with different managers, this is what i think it comes down to from a broader view:

  • Managers out of touch with customers.
  • Employees not telling them the whole truth.
  • The bosses have to answer to their own bosses who are just as illogical.

I’ll say there are five warning signs of organisations in trouble:

  1. Disorganised thinking at the leadership level. Strategy and processes are all over the place. It comes across as leadership with Tourette’s Syndrome.
  2. Delusional mindsets. Managers and leaders have views. of the market, customers, investors, suppliers and regulators that are completely out of whack with reality.
  3. Internal fragmentation. Different parts of the organisation are not talking to each other. They are also not passing on information and even sabotaging each other.Whistleblowers and people who ask the hard questions are sacked or sidelined.
  4. The organisation is completely unaware of its delusional and fragmenting stake.
  5. The organisation has trouble dealing with the demands of the market, customers, suppliers and regulators.

What do you guys think ?