Leadership Behaviors That Are Damaging Companies

In a world of accelerating disruption and staggering uncertainty, transformations lie around every corner. And it will only become more challenging over time as the pace of technological change accelerates and leaders face geopolitical and societal instability, terrorism, and climate change.

Change, fog, and friction can be paralyzing. This phenomenon – long known to leaders and behavioral economists alike – has deep evolutionary origins, leading to the common organizational behavior known as a bias for inaction. As psychologist Daniel Kahneman writes, “organisms that treat threats as more urgent than opportunities have a better chance” of survival.

This is why it is crucial for leaders to lead by example. When leaders do not practice what they preach, they destroy the morale, loyalty, and engagement throughout the organization. There are various behaviors that can lead to destruction within an organization, including micromanagement, indecisiveness, senior level isolation, excessive optimism, arrogance, and a failure to instill two-way accountability and two-way trust throughout an organization.

In our personal and professional lives we naturally prioritize “bad news.” Our fear of failing “to reach a goal is much stronger than the desire to exceed it.” In his Prospect Theory and subsequent study of human biases, Kahneman points to these evolutionary forces to explain why we view potential disadvantages of change more negatively than its advantages. Moreover, he notes, our aversion to losses and failures spikes when stakes are high, and we have stronger emotional reactions to the outcomes produced by our actions than the same outcomes if they result from inaction.

In the presence of uncertainty, all of this makes us innately reluctant to make decisions that could lead to loss or regret. There is never a shortage of perfectly sensible excuses for not making a decision or delaying action, which often compels us to kick the can down the road or resort to uninspired and risk-averse choices. Other factors – such as a lack of strategic vision, diffusion of authority and responsibility, or misaligned incentives – tend to make matters worse. Even when we effectively detect and assess change, our response may be delayed – or even prevented – by a powerful “gravitational force” that favors the “status quo.”

Modern behavioral economics is aligned with Clausewitz’s view that indecision is “native to the human mind,” making inactivity “the rule” and progress “the exception.” Inaction is, of course, antithetical to agility. This is true not only because it hampers effective responses to threats and opportunities, but also because it yields the initiative to others, often putting us on the defensive. To recognize and pre-empt these ills of inaction, President Theodore Roosevelt once observed that “in any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” This statement should be taken with a grain of salt because certain “wrong things” — half-baked decisions driven by gut reactions and unwarranted optimism – can be lethal.

In defining agility, we make an important distinction between a bias for inaction and deliberate inaction based on rigorous decision-making grounded in the understanding of risk. Such well-considered inaction can be invaluable, giving us an opportunity to gather additional intelligence, deepen trust, and improve capabilities and preparedness. Then we can decisively strike when the time is right. From this perspective, deliberate inaction is an integral part of organizational decisiveness.

In addition to inaction and poorly-conceived reactions, fog and friction can lead to other destructive organizational behaviors incompatible with agility. Chief among them is micromanagement. Delegating authority requires confidence in people and tolerance for honest mistakes and failures. When leaders become overly risk-averse in the face of uncertainty, they often excessively centralize decision making and execution authority, which deprives organizations of agility and decimates engagement and trust. This phenomenon can be exacerbated by advances in surveillance and communication technology that create an illusion that the fog of battle can be effectively penetrated from the comfort of an executive office.

Of course, knowing when to act and when to further prepare, assessing how much risk we should take, of what kinds, and formulating a clear strategy reflective of the prevailing environment are formidable challenges – which is precisely why courageous organizational responses to change are so inspiring.

This article is adopted from Leo M. Tilman and General Charles Jacoby’s new book Agility: How to Navigate the Unknown and Seize Opportunity in a World of Disruption