There has been more comment recently on Carillion’s failure – with some observers saying that the senior management team must have had some inkling that all was not well.
We’ve already heard – in the wake of Capita’s profit warning – that had Carillion paid greater attention to pessimistic readings of its predicament, rather than clinging to more upbeat appraisals, it would have survived.
This tendency to hope for the best and refuse to consider the worse is also known as ‘optimism bias’ – originally defined as ‘unrealistic optimism’ in a 1980 study by psychologist Neil Weinstein. And ‘optimism bias’ manifests itself in a host of different ways.
Ignoring difficult, unwelcome or uncomfortable situations isn’t confined to predictions of corporate failure. Our research at the Institute of Leadership & Management frequently reveals how many leaders and managers find it hard to provide negative feedback – and even giving positive feedback is difficult for many.
At the Institute, we highlight Achievement as one of the components of the five dimensions of great leadership. Achieving leaders successfully manage performance, they set clear expectations, monitor results and behaviour and provide regular constructive feedback – good or bad.
Bearing bad tidings
When it comes to the matter of uncomfortable data or research, just like giving feedback, leaders can be similarly reluctant to be the bearer of bad tidings – because they’re wary of the reaction they will trigger.
How often do we hear the phrase, ‘Don’t shoot the messenger’? And what about, ‘It’s not what they said – it’s the way that they said it’? Sometimes however well you deliver feedback, it’s just not welcome, it’s the message that the receiver of the feedback doesn’t like, and calling the tone into question is a great distracter.
It’s not easy to admit we’ve been wrong or made a mistake. And even the practice of recording ‘lessons learned’ after a project might not provide the honest insights it could. Hoping a team member’s performance will improve is more enticing than anticipating it’s going to decline.
Creating an open culture
Ultimately, good leadership means creating a culture in which it’s genuinely okay to convey bad news in a way that’s depersonalised and isn’t a criticism of the person, just an unexpected aberration. An important contributor to this would be communicating, across the organisation, how much better it is to be ready for bad news rather than pretend it’s not happening.
We should look forward with optimism when it’s justified and praise strong performance – making those acknowledgements on a one-to-one basis, so they convey genuine meaning.
For more information about our research, visit our Institute of Leadership & Management website and join us on Twitter @InstituteLM
