INTRODUCTION

An executive I know believes that leadership, when all is said and done, is simply making better decisions than your competition. When asked how people can best develop this capability, he smiles and says, “Make a lot of bad decisions that don’t kill you.” The fact that good judgment is built on bad judgment means that you learn primarily as result of your experiences—particularly your mistakes. Over time, you develop better judgment as you live with the outcomes of your choices. You also observe other leaders and extract lessons from their decision-making process. The full truth, however, is that experience is no panacea. You may not make the same mistakes twice and will most likely make fewer mistakes as your career progresses—but you will make mistakes. Even the most talented and best-prepared leaders learn on the job—facing complex, ever-changing, and often unexpected challenges.

It is equally true that mistakes become more costly as you move up in a company. Take the case of Ron Johnson at JCPenney. Johnson was appointed CEO based on his stellar performance at Target and later at Apple, where he created a retail division that became one of most profitable in the world. Some viewed him as a retail genius. The board of JCPenney believed that Johnson’s innovative leadership was needed to revitalize the firm. He would determine how to rebrand the company and bring in new customers. Soon after being hired, he pushed forward with his bold vision for the century-old retailer. He moved the company away from its historical roots as a retailer offering bargains on heavily discounted and private-label merchandise. The company would now offer a range of branded products at “everyday low prices.” Johnson implemented his changes quickly, despite warnings that he was moving too fast in a company and marketplace that he didn’t fully understand. Extremely confident, some would say arrogant in the mold of his former Apple colleagues, he saw no need to pilot test his ideas before pulling the switch on a massive and risky undertaking. It was soon apparent that his vision was ill-conceived and even more poorly executed. Many of the firm’s traditional customers, without the lure of steep discounts, stopped shopping at JCPenney, resulting in a loss of $1 billion in the first year after Johnson took charge. A business school professor noted that “Penney had been run into a ditch when he took it over. But, rather than getting it back on the road, he’s essentially set it on fire.”1

Mistakes, of course, occur for a variety of reasons. In some cases, the information available to a leader is incomplete or flawed. In other cases, the analysis, while rigorous, is inconclusive on the best path forward, and the leader simply makes the wrong choice. Not all bets are winning bets. Ron Johnson’s mistakes, however, were not rational mistakes. They were the types of mistakes of which others say, some before and many after the fact, “What was he thinking?” Johnson was handed a company in far worse shape than anything he had experienced at Target or Apple. He also had little experience with the middle market of fashion retailing—which is quite different from selling iPhones in a sleek Apple store. Despite these differences, he was convinced that the management techniques that had worked so well for him at Target and Apple would also work at JCPenney.2 He didn’t need market research to tell him what would work. He didn’t need to hear other points of view on the best path forward. He simply charged ahead, as he had in the past, based on his gut instinct. Even after his strategy was failing, after he had set the company “on fire,” Johnson claimed that he would not have changed his approach.3 Eventually, Johnson accepted that mistakes were made and tried to salvage his plan—but by then it was too late to save his job.

In this book, I use the term blindspot to refer to an unrecognized weakness or threat that has the potential to undermine a leader’s success. This definition of blindspots is distinct from two related concepts. First, some failures are the result of so-called black swan events: events that are unpredictable, uncontrollable, and rare—and also largely outside of the ability of a leader to anticipate or influence. Nassim Taleb, who introduced the concept of occurrences as improbable as a black swan, cites the Internet as an example of something that could not have been foreseen but that, once in place, changed the nature of society, including how business is conducted.4 A more recent example is the development of hydraulic fracturing and horizontal drilling, which will have a major impact on the US economy and potentially the world economy. The best a leader can do to prepare for black swan events is to consider a range of potential disrupting events and how to respond if they do occur. Blindspots, however, are different from black swan events in being much more common and potentially recognizable—that is, existing information allows a leader to see and address a weakness or threat if he or she understands how to view it properly. They are potentially knowable and actionable.

Second, failures sometimes result from what can be called situational blindness, where the environment makes recognition of a weakness or threat almost impossible. These situations are not as extreme as black swan events but have the effect of blocking awareness. Time is needed for events to unfold, for new data to surface, in order for a leader to gain a clear line of sight regarding the situation he or she faces. Let me use an analogy to illustrate this point. I have a colleague who lives in New York City. His son takes a bus to a school located in a different part of the city. Each weekday, they look out the window in their high-rise building with binoculars to spot the bus as it makes its way uptown; the son then goes down to the street to meet it. However, on some days the fog rolls into Manhattan and binoculars are of no use. On these days, my colleague’s son leaves early and waits for the bus to arrive. Making a decision in a company is similar in that some conditions of blindness are not the fault of the leader but, instead, arise from the situation.5 A leader, for example, may push her firm to launch a new product that has no equivalent in the market. While prelaunch analyses can be helpful, the product needs to be in the market before data become available to fully inform the leader’s decisions on how to best promote it. Leaders are flying blind when they don’t have access to the information they need because the situation makes it impossible to obtain that information. In contrast, blindspots are recognizable if one looks for them.

This book doesn’t focus on black swan events or cases of situational blindness. Instead, it investigates irrational errors of some significance—those that cause harm when leaders fail to see what is right in front of them. The most visible of these blindspots is typically a leader’s lack of awareness of his or her impact on others. This is the executive who ostensibly believes in empowering her team members but then makes all the key decisions herself, forcing others to comply with what she wants. She may tell a next-level manager, for instance, that he can hire the members of his own team but then selects the best candidates to fill open positions. Her team members feel, justifiably, that she is micromanaging them and putting constraints on what they can do with their groups. In this case, however, the overly controlling leader is not being hypocritical. She truly believes that she is acting one way (delegating authority) when in reality she is acting in a very different manner (making decisions for others). She is blind to the reality of how her behavior frustrates those who work with her.

Blindspots, however, are not just cases of failing to see ourselves or our actions accurately. They are evident in the way we view our teams, organizations, and markets. Some leaders, for example, view particular team members as being much more talented than is actually the case. Or they can fail to see the untapped potential in others and don’t give them the opportunity to grow into broader roles within a company. Other leaders hold distorted views of their organizations. An executive may believe that his organization is making steady progress on implementing a reorganization. What he doesn’t see is that some of the old guard in his company are resisting his new design—telling him that things are fine but then standing on the sidelines and not providing the support needed to make the change a success. Still other leaders may have blindspots about their markets, as did Ron Johnson at JCPenney, who failed to see his customers accurately. Blindspots thus operate at multiple levels: how you view yourself and your impact on others, the strengths and weaknesses of your team and company, and the forces operating in the industry and markets in which you compete. A savvy leader knows that he or she may have blindspots at each of these levels.

In the following chapters, I examine how to identify the blindspots in yourself and others. Two surprising qualities of blindspots are worth noting here. First, leadership strengths are often found in close proximity to blindspots. An overpowering strength, in particular, usually has an associated blindspot—one that is sometimes problematic and sometimes not, but always close at hand. Leaders who are deeply passionate, for instance, can believe in their own views to the point of...