When it comes to leading enterprise transformation, everyone knows that the odds of failure are high – most research studies cite 70-80% of them fail. Of all the countless forces that torpedo transformative endeavors, none is more agonizing to watch than poorly thought-out leadership rationalizations. It’s important to foster trust and encourage communication.
We continue our series on habitual rationalizations that grab hold of leaders and undermine their efforts. The rationalization example we are covering this week is: Dismissing the devil you know – Denying the destructive impact of those who need to go.
One rationalization psychology example: She may not be perfect but I can’t afford to lose her now, and it will take six months to replace her. The devil you know is best.
Reality: She’s a major detriment to your success, isn’t performing well, and you are afraid to deal with the fallout of removing her just because she’s the devil you know.
Leadership Rationalizations, Difficult Decisions
As a senior leader, you will face difficult human capital decisions. You will need to ensure that those who are not contributing are let go. You will need to make tough calls when thinning out one function to resource another. You will make organizational structure decisions that lead to many layoffs.
But the most difficult leadership rationalizations to contend with are often letting go of another senior employee with a long tenure who you know is not a good fit for where you are headed. The moment you begin to detect someone may not make it, you must accept the stark truth that “the devil you know” is still the devil.
The rationalizations begin. “She may not be contributing now, but she has been a loyal employee through this transition. Who knows where this place would be if not for her commitment the last 15 years.”
“While he is not a good manager of his team, his organizational knowledge is vast.” “I had to let a number of people go when I started. If I let him go now, I’m pretty sure everyone will think they’re next!” These voices are all typical responses, according to economists.
Be the Leader Your Team Deserves
Even the best leaders have their blindspots. Leadership coaching gives you the big picture.
Influences on Decision-Making
Economists describe two key factors that influence our decision-making – often unconsciously.
One is “sunk cost” which is about the past time, money, energy, or other resource that you have invested into something and thus fear abandoning. The other is “opportunity cost,” which is about the future.
Are your decisions based on what you might lose and how you will be perceived, or are they based on what you have to gain? If it’s the former, your devotion to sunk costs might be costing you the vision you have in mind. The mindset of “the devil you know is best” echoes a known psychological phenomenon. This goes against what should be your leadership goals.
People rationalize past actions when faced with evidence that contradicts their prior choices. This rationalization may lead people to commit further resources to their chosen action despite poor results.
For example, a CEO knows her CFO (whom she hired) is too rigid and risk averse for the future of their company, finds evidence of how one of the CFO’s decisions cut cost and presents it to the board.
Sunk cost begets sunk cost. Focusing on and even sinking more resources into struggling employees is more about you and your public perception than it is the future of the organization. It is self-protection over transformational execution—a psychology rationalization example.
Clear Leadership Rationalization, Visionary Leadership
How then does a leader turn from excessive self-consciousness to the visionary leader required for such urgent times? In order to lead transformation, we must focus on opportunity cost. Change leaders would serve themselves well to focus on people who are already predisposed to achieve the vision they have in mind.
It is far easier to direct those who are behind your cause than it is to turn skeptics into fans. Self-protectant leaders get frustrated that “the devil they know” is making things difficult, but they refuse to make the necessary change.
It does a leader no good to complain about the organizational dams that halt the flow of their momentum – in fact, there is an example of rationalization, for not addressing the issue.
Rather, a leader should get rid of the dams and focus on, and hire, individuals who serve as aqueducts – transporting energy across the organization and giving life to areas that did not previously have it.
Practically, it is important for your leadership rationalization that if you do believe that it is the right thing for someone to leave, it’s better for them and better for the company. You want employees on the team who are fully aligned and committed.
The more acute but temporary pain of a layoff – and the following transition, hiring process, and onboarding – will save you from the chronic pain and frustration of running into the same dam time and time again.
Tips and tricks for improved decision-making and avoiding leadership rationalization:
Identifying Problem Leaders
So how does one identify whether a senior leader should be let go? Be aware of your self-protective biases, trust your gut, and do your homework. Some rationalization psychology examples that may arise are:
- Your leadership rationalization of their underperformance: Defending “the devil you know” may create the perception of an alliance. If others sense that you are protecting yourself or the underperforming leader, they will assume that you do not have the best interest of the company in mind.
There is, perhaps, nothing more dangerous than defending someone who deserves to feel the consequences of their actions. Again, as a rationalization example, notice when you rise to defend someone and observe whether it is appropriate or not.
- Restless peers: When leading organizational change, it is important that top management insists on free, candid, open, and informed conversations – even about personnel. Listening to peers and a leader’s direct reports ensures that you get a perspective greater than your own.
- Coaching has failed: After assessing the required skills of a leader and creating and implementing a plan to increase their capability, you must assess their improvement. If feedback and coaching proves fruitless, this is a sign that you must turn your energies from sinking cost into improving them into the unknown opportunities of replacing them.
- Questioning of your motives: All change initiatives require trust. If a fellow executive is questioning your commitment to the organization or is unsure of your fit, these are a sign of a lack of trust. Without this trust, it will be difficult to move forward.
The “devil you know” is still the devil. When considering our leadership rationalizations, we must admit that all demons are bad. In this admission, we will find the freedom to focus not on the sunk cost, but the opportunity cost – the future rather than the past.