Category Archives: Blog

Why Do Companies Make So Many Bad Decisions?

I had the opportunity to spend this past weekend at the Kellogg Miami campus in Coral Gables teaching my class “Executive Perspectives in Leadership” to EMBA 107, a great group of executives who will graduate this December. I really enjoyed spending time with them.

Harry and EMBA 107

One of the topics we discussed was “Why do companies make so many bad decisions?” I find it to be an interesting question on which to reflect.

The immediate response to the question is usually, “Well, the boss simply made a mistake. It just happens because people are human.” However, I don’t think that is the real answer. Why? Well, when the boss was about to make a bad decision, what happened to all of the people on his team? Did they all make the same mistake? Did no one on the team realize this was not the right decision? Was this simply a case of classic “group think”? I don’t think so.

I always tell students and executives that I have very few answers, but MANY opinions. So here’s my opinion:

I think there are two reasons that cause so many companies to make bad decisions. The first reason is a result of how the boss articulates what he wants to do. When the boss says, “Here’s what I want to do”, does he make it clear that is what he wants to do ONLY if is the right decision and makes sense? Does everyone on the team know that the boss wants to be challenged? My experience is that the boss often does not make it clear he wants to be challenged, and in fact, sometimes he truly doesn’t want to be challenged.

But I believe this is only half of the problem. Now let’s look at the second reason companies make bad decisions:

How do the people working for the boss define their jobs? If they define their jobs as “making the boss happy”, no wonder mistakes are made! And let’s not forget the frequent comment made by someone on the team, “Well, it doesn’t seem to make sense, but the boss must know more than we do.”

My experience is the boss often does not know more than his team. In fact, usually the people closest to the action know a lot more. In order to significantly reduce (there is no way to eliminate) the number of bad decisions, two things must happen:

1) the boss needs to make clear that he only wants to make a decision if it makes sense, and he expects his team to challenge him if they don’t think it is the correct decision. He needs to make clear he is not trying to be right and have his way, but rather, he wants to do the right thing with the help of the team.

2) Everyone on the team must understand that their job is not to make the boss happy, but rather to respectfully challenge the boss if they think he is making the wrong decision.

You may be thinking that this should be common sense, and it is…but never forget Mark Twain’s quote: “Common sense ain’t so common!”

Dean Jacobs

I am rarely at a loss for words, but I am this morning, so I will make this short. Dean Don Jacobs passed away yesterday morning. He was my teacher, my mentor, my colleague, and my friend. I first met him when I arrived at Northwestern Kellogg as a student in the Fall of 1977, and I immediately knew that this was a truly amazing leader. His love for the school, the faculty, the students, and the alumni was absolutely contagious. It was clear his focus was to make Kellogg one of the best business schools in the world, and everyone who knew him was convinced it was going to happen under his leadership.

Dean Jacobs and I stayed in touch after I graduated from Kellogg, and I cherished his frequent calls and sage advice during my years at Baxter. He also called often to let me know when he needed me to be a guest speaker or join a Kellogg panel. Once when I told him that if it weren’t for his mentoring and my Kellogg education I never would have been the CEO of Baxter, he responded, “I will never let you forget that.” 😉 True to his word, when he heard I was leaving Baxter in 2005, he immediately called me and said, “I am glad you are leaving Baxter. I now want you to teach.” When I protested, “I run companies, you don’t expect me to have a syllabus and grade papers, do you?” he retorted, “I think you told me that you would do whatever I asked you to do?” When I told him that I didn’t think I could teach finance (my area of academic study and early career) and compete with the brilliant Kellogg finance faculty, he asked me what I wanted to teach instead. Clearly, the idea of not teaching was not an option! 😉  I shared that I would like to focus on leadership, values, and ethics, to which he quickly responded that it was a great idea and instructed me to put a syllabus together right away and get started the very next quarter! The last 12 years of teaching at Kellogg have been the best years of my life, and I hope, God willing, to continue teaching for the next 20 years…and I owe it all to Dean Jacobs.

As one of my colleagues mentioned yesterday, “there is a hole in the universe today.”  Dean Jacobs was clearly a “force of nature.”

Following is  a “Poets & Quants” article that came out yesterday afternoon in tribute to Dean Jacobs. Do check it out:

The Lifeline

I have yet to meet the person whose life is a forever happy, straight line with an uninterrupted positive slope upward from birth to death. After all, life tends to be an assortment of highs (graduating from school, getting a good job, maybe getting married, having children, getting promoted, etc.) and lows (losing a job, the death of a friend, etc.). Macro issues – social, political, environmental – also have a tremendous impact on our lives, contributing to both the peaks and the valleys in our “lifelines.”

In my experience, far too many people neglect to truly reflect on this reality. As such, they find themselves stressed out, constantly worried about something or another. Time and time again, they are surprised by “unexpected outcomes,” many of which they would most likely realize upon self-reflection are not that unexpected, given the choices they’ve made in their lives. I often use the example of a friend I ran into at an airport on a business trip once. I hadn’t seen him in a while and asked him how he was doing. After the usual small talk, he shared that he was surprised to realize that he had no relationship with his two sons. When I asked him if he spent time with his sons, he stated that he did not spend any time at all with them. I found myself wondering: Why was he surprised? I was surprised that he was surprised!

People who are self-reflective are rarely surprised. Think about it for a minute. We may not know when it will happen, but most of us will at some point not receive that promotion we expected, or we may lose our job. Someone we love and cherish will pass away. It is most certainly unfortunate – but it should not be a surprise. This doesn’t mean you adopt a pessimistic world view and not celebrate or enjoy the peaks. It simply means that you take a clear-eyed view of the nature of life, and prepare yourself. Through self-reflection, we can ground ourselves in who we are, what we value, and how we wish to navigate the ups and downs in our lifelines. We can plan ahead and consciously choose how we will react before things happen. If instead we wait until we are already at a low, it is too late. By then, worry, fear, anxiety, pressure and stress have already set in. So why not prepare for these inevitable lows when things are going well (or at a “plateau”)?

As part of my nightly self-reflection, I ask myself questions to prepare for the lows AND the highs. What should and would I do when things are going really well and I am at the top of a peak? And what will I do WHEN (because it is not IF) things don’t go well and I come down off the peak? Through my self-reflection, I reaffirm to myself that no matter what happens (no matter how amazing, bad or unfortunate), I will always try to do two things:

  1. Do the right thing*
  2. Do the best I can do

Now, when I say “do the right thing”, I always put an asterisk after it: What, after all, is the “right thing to do”? Indeed, the “right thing” can mean very different things for different people. For me, the key is to surround myself with people I admire and respect with strong values who will help me “do the right thing” in an uncertain world. Combining that with “do the best I can do” completes the puzzle. Why? Well, I strongly believe that if you can convince yourself that no matter what happens, you will “do the right thing” and “do the best I can do”, then “worry, fear, anxiety, pressure and stress” can be SIGNIFICANTLY REDUCED. Since we are human, they probably cannot be eliminated, but by being reduced they can help us lead a more balanced, healthy life.

Think of the power this gives you over your emotions! Rather than getting anxious or depressed, I can keep things in perspective. As my grandfather used to tell me when I would complain about my job being difficult, “Harry, that’s why they call it work!” And then he would add, “Harry, you should hope there are problems or issues at work tomorrow, or they may not have a job for you!” Yes, a little self-reflection goes a long way!

Through the peaks and the valleys, may your “lifeline” have an overall positive, upward slope 🙂 As always, I look forward to hearing your thoughts and comments!


I Wondered What Our Founding Fathers Would Say…So I Asked Them!

Given the plethora of issues we are facing as a country right now (the list seems to be increasing daily, if not hourly), as part of my daily self reflection, I wondered what America’s Founding Fathers would say about what is going on. So, in my attempt to figure this out, and to “seek to understand before I am understood”, I decided to ask them. “How??!”, you ask? Well, believe it our not, I happened to run into several of them at the Salt Lake City airport two weeks ago. If you don’t believe me, take a look at the picture below 😉

The first topic I wanted to discuss with them given the recent events in Charlottesville was the First Amendment, which, of course, protects our freedom of speech.  I think I understand the concept that in a true democracy an individual should have the opportunity and the right to say what he/she believes, regardless of what others may believe. The fact that others may strongly disagree shouldn’t censor that individual’s view.

George Washington stated:

“If men are to be precluded from offering their sentiments on a matter, which may involve the most serious and alarming consequences that can invite the consideration of mankind, reason is of no use to us; the freedom of speech may be taken away, and dumb and silent we may be led, like sheep, to the slaughter.”

Ben Franklin opined:

“Freedom of speech is a principal pillar of a free government: When this support is taken away, the constitution of a free society is dissolved.”

I firmly believe that people have the right to say what they want, which is maybe why this quote from Evelyn Beatrice Hall’s The Friends of Voltaire (which she wrote under the pseudonym S. G. Tallentyre) resonates so deeply with me:

“I disapprove of what you say, but I will defend to the death your right to say it.”

But, on a practical level, I draw a clear line between speech and action: My belief is, okay, you can say it, and even march if you want. However, do not in any way threaten or physically harm another human being. “Free Speech” does not permit “Free Action” under any circumstances.

Personally, I believe that even though people have the right to say anything, the world would be a much better place if people took the time to first really think about how their words will affect others (there’s that “self reflection” again!). Yes, you have the right to say anything, but do you really need to say it? Are you accomplishing something positive or productive, or are you simply alienating or hurting others for no real benefit? Yes, I do realize my point of view may appear unrealistic and impractical, and I can definitely be accused of being both idealistic and naïve. Nonetheless, being a die-hard optimist, I intend to continue trying to raise this awareness and keep asking people: “Yes, you can say that, but do you really need to say it? What are you trying to accomplish?”

I also raised another emotional topic with the Founding Fathers: the Second Amendment — the right to bear arms — but I will save that discussion for another blog post 😉

Here’s wishing everyone a great week!

Summer Vacation: When the Children Take Control

After 25 years of family vacations, Julie and I have gotten used to being in control of our annual summer trips. Yes, we solicit input from each of our five children, but ultimately, we decide where we go and when. I just assumed this was the way it would always be 🙂

Our trips over the past 25 years have become known as our “Wallyworld” trips. Similar to the Griswalds (see Chevy Chase and the “Vacation” movies), we would load all seven of us (Julie, myself, and our five children) and our luggage into a minivan and head off to the East Coast, West Coast, the National Parks, or Canada. Believe it or not, we usually made no reservations since we wanted to be flexible for whatever came our way. If the children wanted to spend an extra day at Disneyworld or Glacier Park, no problem, we just figured out how that would impact the number of miles we needed to drive the following days in order to make it back home in time for work and the start of the school year.

Well, that process worked well until a few months ago. Maybe I should have realized that since the ages of the children are now 29, 26, 23, 19 and 15, things were due for a change. When I told the children of a few possible “driving trips” for this summer’s vacation, I was told: “Dad, we are not going on a driving trip in the minivan this year. We are going on a rafting trip.” When I inquired “where,” I was told: “Dad, just pack a sleeping bag and a bathing suit. We have arranged everything.”

This was not easy for me to comprehend: I am not involved in the planning???? And rafting sounded a little ominous since I have never done it, and I am not a great swimmer.

Well, it turned out to be an amazing week! We all flew to Denver where, ironically, the kids rented a minivan so we could drive across the state of Colorado to Grand Junction. From there we took a small propeller plane to the Green River in Utah. We then boarded three rafts with two other families and took a 90-mile rafting trip over five days down the canyons of the Green River toward Moab, Utah.

The scenery was gorgeous, and the stars at night were magnificent. In addition to the three rafts, the guides had inflatable “ducky boats”, which were two-man kayaks. The rapids were just crazy enough for Dad to get very nervous about flipping over…just another example of not being in control.

It was a wonderful family time for swimming, rafting, camp fires and story-telling. I am already looking forward to what surprise the children have in mind for next year!!

A Little Self Reflection: Five Days at Camp Makajawan

Who said you couldn’t have fun at a Boy Scout camp with 200 scouts in 55 degree weather in the rain? 😉

First of all, a little background: Camp Makajawan, or as the camp sign says “Ma-Ka-Ja-Wan”, is a Boy Scout camp in northern Wisconsin, about 300 miles north of Chicago, up in “God’s Country” (no, it isn’t all the way to Canada). My youngest son, Daniel, and I have had the opportunity to spend a week there with 200 other Boy Scouts the first week of August for the past four years.

Even though it rained several days, and the temperature was in the 50’s (yes I said 50’s in August! 😉 ), we had a fantastic time with our Wilmette Troop 5. It is a great time to bond with one another and truly enjoy nature: walks in the woods, participating in numerous merit badges, canoeing, and building fires. Daniel also went on a “wilderness survival night” in which the troop heads out into the woods with a knife and three matches and is expected to make it back to camp in the morning (Dad took a pass on this adventure and stayed at camp reading one of his world history books in the tent 😉 ). Daniel and the troop did make it back in one piece.

Some of the gang around one of our campfires

Even though I never had the opportunity to be a Boy Scout myself, I really admire the Boy Scout experience. Camp Makajawan is run by 50 Scout leaders, mostly young men between 16 and 22 years old. The process starts at 7:30am sharp with the raising of the American flag and an announcement to “prepare for prayer according to your custom”. All 200 Scouts, mostly between the ages of 12 and 17 are respectful, diligent, and pay close attention to the direction of the Scout leaders. The troops that are most attentive, dressed in their “Class A Outfits”, and lined up appropriately have the opportunity to eat first. Each day is filled with activities to obtain merit badges and enjoy nature activities. The day ends with the lowering of the flag, “prayers according to your custom,” and dinner, followed by camp fires.

In a world that often questions the next generation, you have to see what occurs with these young people to believe it. The boys helped one another through the exercises and merit badges, listened to one another as they shared experiences and learnings, all in a very respectful manner. I reflected on the fact that many of us adults could learn a lot about listening from these young men, taking the time to truly understand the perspectives of others rather than wasting so much time giving our opinions on what is right and wrong with the world. Spending these five days at Camp Makajawan gives me great hope for the next generation — and maybe some of them will run for office someday!

Here’s wishing you a great weekend!

A Lesson from Children on Values-Based Leadership and Spirituality

I often reflect on how unfortunate it is that people in many situations focus on the differences in our spiritual beliefs rather than focusing on the many things the great majority of us share in common: Treating one another the way we want to be treated (the “golden rule”), giving one another the benefit of the doubt, forgiving one another when we make mistakes, making the world a better place for our children, etc.

However, being an optimist, I believe firmly that we have the capacity to do better, and I believe that heart-warming stories like the following one attest to this fact:

As you may know, today Muslims worldwide celebrated “Eid-ul-Fitr”, the end of the Islamic holy month of Ramadan. During the past month, Muslims fasted during the whole day (as they do every Ramadan) — which means no food or drinks (including water!) between sunrise and sunset — as a way to purify themselves and achieve a higher level of spirituality. For Muslims, Ramadan is intended to help teach self-discipline, self-restraint, and generosity and serves as a reminder of the suffering of the poor, who may rarely get to eat well. Each evening, Muslims break their fast with a meal called “Iftar”, which is a time to give thanks and celebrate with family and friends. Typically, neighbors also share Iftar dishes with each other. The following photo shows the children of a Muslim friend of mine making such an “Iftar delivery” a week or so ago to one of their neighbors in Philadelphia.

But here’s the fantastic part of the story: These neighbors aren’t even Muslim — they’re Jewish!

Notice that there is a poster on the neighbor’s gate that says “Hate has no home here.” The statement is repeated in several languages, including Urdu, Arabic, Spanish, and Hebrew.

My Muslim friend said it best: “My family and I felt it was so nice of our Jewish neighbors to publicly condemn hate that we stopped by and introduced ourselves earlier this year and decided to share an Iftar platter with them this Ramadan. I feel the picture of our children delivering Iftar to this neighbor is so powerful: Two Muslim children delivering Iftar to Jewish neighbors who have made a poignant, public declaration in support of love and humanity.”

I get excited to think of how different the world could be for all of us and our children if we all acted in this way, focusing on what we all share in common rather than exaggerating the differences. We clearly can learn much from such acts of generosity and kindness.

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