Why making quick decisions in the face of failure almost guarantees it will all happen again
 

Whens things go wrong, the natural tendency is to respond in a hurry, basing your decisions on the lessons you have just learned. After all, you’ve just discovered the hard way various flaws in your past actions. It’s only natural to want to make sure, if you can, that they don’t trip you up again. The trouble is that formulating ‘rules’ in haste, based on the most recent and painful occurrence, is almost certainly the best way to store up future problems.

Yet, if you don’t allow yourself enough time to stand back, think the problems through and decide whether what you’ve just experienced is a short-term nastiness, or a symptom of a long-term malaise, you’re in serious danger of locking in a ‘solution’ that is going to be worse that the problem ever was.

We’ve seen in recent months how people from individual financiers to the US government rushed into ‘solutions’ for our financial woes, each time claiming that what they proposed was going to solve all the difficulties. None of them have. The reason is less the incompetence or bias of those involved than the simple point that, since the true scope and nature of the difficulties took some time to become clear (if it even has yet), all quick solutions had to be based on a flawed and partial understanding of what needed to be solved.

Instant answers are the most risky of all

Organizations build up ‘scar tissue’ from past, often botched, attempts to deal with mistakes. When something hurts, they want it to go away and never come back, so they first look for simple, instant ‘cures’, then institutionalize these in rules aimed at preventing the pain from recurring.

In time, there are so many rules and procedures around from all these past hurts that the organization becomes stiff and rigid. It’s nearly impossible to sweep all the unnecessary rules away either, because there are two powerful—and linked—groups of people who work hard to retain them: conformists and authoritarians. Conformists feel safe being told what to do. Authoritarians feel in control when they can do the telling. And when things go wrong, these groups come together to try to ‘solve’ their pain through imposing new rules as quickly as possible.

That’s why banks shifted from being far too ready to lend money to anyone who asked (trusting too much) to refusing credit to almost everyone (trusting too little). Having ‘solved’ their need to make quick profits by ridiculously lax lending, they are now trying to ‘solve’ their debt pain by setting up rules that virtually prohibit any lending at all. As a result, credit is likely going to be hard to come by for months or years to come. The rules designed in haste to deal with an epidemic of poor lending decisions are almost bound to be too strict for normal times.

The authoritarians in positions of power want to protect themselves by laying down rules that, they hope, will prevent those beneath them from putting the bosses’ positions and salaries at risk. The managers below—or, at least, many of them—will accept the imposition of such draconian rules because they substitute compliance for the necessity to accept personal responsibility.

Both parties will act in haste. Both will probably come to regret it later. Together they will hinder the emergence from current problems, just as their past hasty choices, taken when everything seemed to be capable of being turned into quick profits, caused the crisis in the first place.

The answer is to foster doubt at every level

We all need doubt. It’s the driving force behind change, creativity, and independence of thought. Authoritarians and conformists—no surprises here—much prefer faith in fixed dogmas, including those of management: all the “truths” taught in MBA programs and hallowed by years of mindless repetition. Yet, if we truly want to prevent future problems as far as we can, doubt should be fostered and nurtured wherever it can be found.

The worst place to look for doubt, questioning, creativity and new ideas is at the top of the organization. Those who have made it that far typically have no doubt about the value of preserving the current system. After all, it brought them to the top, didn’t it? It must be good. The best place to look for creativity is in the usually despised and neglected ranks of middle managers. These good people are not yet heavily invested in any system. They are much closer to the real needs of the organization. They haven’t given up their doubts about what is done today (nor about the supposed infallible wisdom of their boss’s way of doing things). Best of all, they have enough experience to see what needs to be done and direct their creativity to the right spots.

We are suffering from past styles of leadership that focused only on what is cheap, quick, and generates most short-term profit. Because of the emphasis on doing things quickly, and never sparing the time to think anything through properly, our organizations are now partly crippled by a build-up of ill-thought-out, hastily-imposed rules, dreamed up in a hurry when things went wrong. Management ranks are too often dominated by authoritarians and conformists, each group needing the other to operate.

A good part of the solution is to encourage doubt and cherish creative middle managers, who are not yet tainted with obedience to the current regime’s ways of doing things. The rest is to acknowledge that decisions made in haste are usually bad ones, just like hasty legislation and hasty marriages. Repentance at leisure is never going to compensate anyone for the pain such choices inflict. Let’s hope it’s not too late for us all to learn this message at least.

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