Wednesday, March 18, 2015

Magical Thinking

Remember that TV commercial where a wide-eyed guy's favorite football team scores every time he goes into his basement to get more beer, so he concludes he has "cracked the code," leaves his friends and goes down into the scary basement one more time "for the win"? That spot depicted a form of magical thinking, which according to psychologists Leonard Zusne and Warren Jones in Anomalistic Psychology: A Study of Magical Thinking involves believing "that one's thoughts, words, or actions can achieve specific physical effects in a manner not governed by the principles of ordinary transmission of energy or information."

Magical thinking is a normal dimension of thinking in young children, of course. Toddlers routinely make illogical and unsound decisions--they just don't have enough information about the world yet to form more reasonable conclusions (more on that topic here.) At around age seven or eight most children begin to think logically and are better able to grasp cause and effect relationships, so they move away from magical thinking.

Yet magical thinking lives on in many adults--sports fans, athletes, coaches, gamblers, sailors, politicians and even business executives. Think of all the people you know who regularly engage in superstitious rituals-- following lucky routines, wearing lucky items of clothing, carefully avoiding any behavior or circumstance that might curse or jinx an undertaking or outcome. While such rituals might be irrational, they are not generally harmful and some experts even consider them to be potentially beneficial. Perhaps that's why the tagline for the beer commercial described earlier offered viewers this subtle reassurance:
“It's Only Weird if it Doesn't Work”
O course there is a darker side of magical thinking that can be problematic, particularly in business. It has roots in narcissism and can involve delusional thinking fueled by an unrealistic or underdeveloped understanding of causes and effects. Unfortunately, since experts believe we're "more likely to find a narcissist in the C-Suite than on the street" it follows that we're also more likely to find magical thinking in the C-Suite.

Here's the problem: a business leader with even mild narcissistic tendencies can be a compelling and disruptive leadership force even when he or she hasn't the slightest knowledge or understanding of the dynamics, the causes and effects, that shape a particular situation. Such leaders come across as supremely certain, energetic, decisive, strategic, visionary--even charming and charismatic in the short term. But they have a big blind spot: when they are in unfamiliar territory, they are incapable of recognizing and acknowledging their own ignorance or lack of understanding. They are confident, but not competent. Sadly, when they don't have the requisite information (or understanding, or knowledge) to make logical and sound decisions, they fall back into magical thinking--just like toddlers do. So their decisions are informed and driven by biases, superstitions, fantasies and faulty logic rather than by facts and evidence-based thinking.

I worked with a CEO years ago who was, among other things, a rip-roaring magical thinker. One of his more peculiar blind spots involved strategy. He categorically refused to even discuss the topic (he called it the S-word) and he would behave even more scornfully and abusively than he normally did if someone dared to bring it up. He made his magic belief mindset clear--if people just did their jobs, the company would flourish, so it was foolish to waste time thinking or talking or worrying about something as unimportant as the S-word.

I was reminded of that CEO (let's call him S-word CEO) the other day while listening to an HBR Ideacast featuring Harvard Business School professor Frank Cespedes, author of Putting Sales at the Center of Strategy. He was describing how companies often have a vision, or a mission, but they don't have a coherent strategy--because they have failed to make "explicit choices" about markets, customers, value propositions and competitive differentiators. Why is that important? Professor Cespedes:
"’s obviously difficult, if not impossible, for people to execute a strategy that doesn’t exist or that they don’t understand."
Cespedes went on to say that once a coherent strategy has been developed, it's vital for company leadership to ensure that the tasks and behaviors (plans and activities) performed by different company segments (Cespedes talked about Sales, but I took his comments to apply equally to all segments of a company) are focused on delivering value and helping to implement the strategy effectively. In other words, strategy should define the critical tasks and behaviors, not vice versa. Nothing very magical about that.

Well, that S-word CEO struggled with his biases and his fuzzy logic. He made more than his share of dubious decisions, and he caused some degree of harm and collateral damage in the process, but he was tenacious and persistent and he completed a multi-year run as CEO. As he walked out the door on his last day, I'm sure he was pleased with himself, and proud of how well he had steered the company during his tenure. What about his struggles, his setbacks, his ill-advised decisions, and the collateral damage he had caused? Not his problem. He accepted no accountability for anything that didn't work out well, since in his mind someone else was always to blame.

I've worked with many magical thinkers, but S-word CEO probably provided as vivid a demonstration as any I've ever seen of the power, and the wonder, of magical thinking in business. Maybe the beer commercial was spot on--maybe magical thinking is only weird if it doesn't work--and while it may not have worked for others within S-word CEO's sphere of influence, it sure worked for him!

Dean K. Harring, CPCU, CIC is a retired insurance executive who now spends his time as an advisor, board member, educator and watercolor artist.  He can be reached at or through LinkedIn or Twitter or Harring Watercolors.

No comments:

Post a Comment