Denial is not merely being wrong. Everybody makes mistakes. Denial is falling into a cognitive Bermuda Triangle.
Reviewing a spectacular business failure, we often wonder why the CEO didn't see trouble coming. It was so obvious.
Why didn't Digital Equipment Corp. CEO Kenneth Olsen see the PC as a threat to minicomputers? Did Coca-Cola's Roberto Goizueta really think New Coke was a good idea? How long did Henry Ford think he could keep selling black-only Model Ts?
Henry Ford saw more clearly than most the widespread hunger for inexpensive, motorized transportation. That vision made great successes of him and his company. But eventually, when sales of his breakthrough, no-frills Model T began to flag because car buyers became interested in style, not just functionality, Ford refused to face facts. He denied that the world had moved on. And his once-dominant company paid the price.
Excerpt from Denial: Why Business Leaders Fail to Look Facts in the Face—And What to Do About It
This article was provided with permission from Harvard Business School Working Knowledge.