Guiding Quote

“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” Einstein

Sunday, April 7, 2013

OODA Loop Orientate Step: Denial is not a river in Egypt

One of the elements in the Orientate step is the genetic makeup of yourself and your opponent. This includes the various mindsets, biases, and filters that we use as part of our personality. Denial of facts, evidence that contradicts our worldview is a common failing and it is not only infects individuals it also applies to groups. It is not a condition that only affects the poorly educated; in fact the smarter you think you are the more likely you are to fall for this condition.

This week we witnessed in the UK a prime example in the world, or should I say the alternate universe, of finance.

In 2008/9 the large UK bank HBOS failed with nearly £50 billion in losses. At the time it had £200 billion more in loans than it had in deposits. It was so out of control that a bank that in 2000 did not have one person who owed it more that £1 million had by 2008 9 people who owed it a £1 billion each!

This, to quote its own finance director in 2004, was "an accident waiting to happen". Its failure would have happened without the 2008 financial crisis: That event only accelerated the day of reckoning.

Now you would think that the men in charge of this disaster would have realized the errors of their ways, said a few mea culpas, uttered some apologies, donned sackcloth and ashes. Far from it. To this day they still don't see what they did wrong. It was events that undid them. Their bank was sound.

Last week, in unusually trenchant language, a British parliamentary commission said, "We are shocked and surprised that, even after the ship has run aground, so many of those who where on the bridge still seem so keen to congratulate themselves on their collective navigation skills. It said of the board of HBOS that "It represents a model of self delusion, or the triumph of process over purpose.

So if so called smart people at the top of a major financial institution can exhibit denial then it is safe to say it is rampant where ever we look or work. In fact the higher up the management chain the greater the prevalence.

So what does this mean for a project manager who discovers he is prone to this? Well the first thing is to always be observing the situation, processing new information, and incorporating it into your plans. To sound like one of those self-improvement con men you need to be rooted in reality, dreams are what happen when you are a sleep, not when youre working.

What happens if your management is in denial? Doesn't want to hear the truth. Well the bad news is that people who tell the emperor that he is without clothes usually get fired: Sad and not fair, but a true statement. The only way is to tell the truth and immediately start searching for new job, youre going to be out of one before long anyway. Denial doesn't hold off reality forever. 

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