3 Costly Traps for The CEO
Today’s article is certainly not exhaustive. There are innumerable issues or as we are identifying them today, traps that a Chief Executive can get snared into. Regardless of the amount of time your tenure lasts at the top, you will encounter many situations which will test your current abilities. Today, I am going to primarily focus on three areas that can present traps which are of a cognitive nature.
Hopefully, with these thoughts in mind, you can practice and develop yourself in some of these areas. Of course, I am always available to discuss these and other situations you feel may be affecting your performance or even hindering it.
This is such a massive topic in regard to people in important positions that it should be its own entire subject and we shall do that at some point. For now, let’s just say that it entails not seeing things as clearly as you should be. There is a double-edged sword to deal with here. If you see things better than they are, you may be often disappointed as reality pounds away at you. If you see things worse than they are, you may get hopeless and have your faith sucked out of you.
For CEOs and other high-level executives, this often plays out in taking things at face value primarily with direct reports. If they tell you things are good or the situation is normal and you just accept that without being curious or doing any verification, you can often get some very bad surprises. Maybe even on some level, you suspect things are not quite as good as they are reporting, but it’s just easier to take their word for it. You don’t ask more probing questions; you don’t talk to any people in their division of the organization or make any site visits.
This can also happen with your own leadership. You have been doing things the same way for quite some time and your results are acceptable or perhaps even slightly exceeding, so you are content to maintain the status quo. Your blind spots do not afford you the opportunity to see what is bubbling below the surface with your team or even with yourself. Just know that your singular viewpoint is often unreliable and it’s never a bad idea to have an objective third party helping you look for things you are not seeing.
2. Getting Too Excited About an Outward Opportunity
Market opportunities are exciting. We are always at the top of the masts of our ships with our telescopes on the lookout for those wonderful sightings which can mean future success. An especially dangerous place to be is when we’ve been on a long winning streak and everything we have ventured into thus far has turned into gold for our organizations. We fall victim to this trap because the real value of many things is uncertain. There are so many variables to come into play. Another complication is, plenty of other competitors are also looking for these opportunities and the more interested parties there are, the greater the likelihood of a gold rush toward them.
We also want to outdo our competitors. We don’t want to get beat on a possible opportunity. This occurs even when the winner will be likely to lose money! But at least we were the first ones to lose money! Madness for sure. Perhaps you have heard the old question, what would you pay for a $100 bill? Imagine you and an opponent are invited to take part in an auction for the $100 bill. Whoever makes the highest offer gets the $100 bill and when this happens, both bidders have to pay their final offer.
How high will you go? When you consider the deal, you think it makes sense to offer to pay $20, $30 or even $40. Your opponent does the same. Even $99 seems like it would work. Now, your competitor offers $100. If this deal closes, he will come away breaking even and you will pay $99. So, you keep bidding. At $110, you have a guaranteed loss of $10, but your opponent will have to pay $109 (his last bid). So, not wanting to lose, he keeps bidding. When will you stop? When will they stop? Try this out with your friends and see what happens. Often, the fear of losing out on something, especially if we perceive it as a great opportunity, is powerful. If you don’t want to lose money at an auction, it’s best not to attend.
3. Being Too Insulated
CEOs and other high-level executives are constantly battling the issue of time. There doesn’t seem to be enough of it, and so, what do we do? We become protective of it and consequently, of ourselves also. This can lead to the illusion of attention. This means that we are confident that we are on top of everything that takes place in front of us. The reality is, we often only see what we are focusing on. This is a problem because of our previous decision to be protective of our time.
Unexpected and often unnoticed items, some minuscule but some very vital, can pass before our area of accountability and we will never notice their occurrence. They may be of the utmost importance and urgency and they really need to be addressed by us, but nobody knows about it! Whatever we fail to notice may go, and remain, unheeded. We must be careful to embrace the thought that if anything is urgent or important, we will notice it. Some of these “elephants in the room” stomp around us every day and we hardly even grunt at them.
Confront all possible and seemingly impossible scenarios. Expect the unexpected as best you can. Plan for the likely and the unlikely. There is a great benefit to thinking through even slight chance scenarios. What is lurking behind the burning issues? Remember, just because you are a high-ranking executive does not mean only you are susceptible to these traps. They are common to all humans no matter the position or title. Pay attention to silence as much as squeaking wheels. Check the edges not just the center. Think about the unthinkable.