Why Do Smart People Make Stupid Decisions?

How To Listen to Your Heart and Make Decisions You Will Never Regret

The Worst Decision I Ever Made

When was the last time you made a decision that was all head and no heart? The kind of decision that was based on sound, even irrefutably logical reasoning only to discover it was a really stupid decision?

It was August of 1999 on a warm Sunday evening I sat on the edge of my deck over looking the foothills to the Rocky Mountains and made the worst decision of my life during one phone conversation.

It took many twists and turns and a hundred more choice points but the decision I made that August night put everything in motion. My company was running critically low on cash and we were in the process of launching a $125 million Initial Public Offering. On the Friday before the fateful Sunday our “first choice” for a new Chief Operating Officer took another job. I had seven days to find another candidate.

I have made a lot of stupid decisions in my life but the most stupid ones always appeared rational if not brilliant when I made them. By stupid, I mean decisions where we are not true to ourselves.

Who Do You Trust?

Think of a business person you trust. The landlord, real estate agent or supplier you (and everyone) know will not take advantage of you even when they are in a position to. You trust him because you know he will do the right thing. These people are leaders that follow the spirit of the agreement (written or otherwise) even when it means they will get less.

What guides these leaders to see beyond laws, clauses in agreements, and sound, irrefutably logical arguments? Their decisions are completely aligned with their core values. Staying grounded in our values takes awareness and courage in the midst of managing complicated dilemmas.

Whether we know it or not, when facing a dilemma we are mostly driven by our vulnerabilities. The problems occur when we don’t identify the inner conflict we are experiencing. When I made that bad hire I was scared and scrambling to meet my need for validation – I had to complete that IPO. It is in this vulnerable state that we start lying to ourselves and betraying our core values.

Warning Signs

How do you catch yourself lying? Or being driven by a blind spot? Or being a really smart person about to make a really stupid decision?

Use this check list. If any one of the four conditions described below is present you are making a decision driven by your head – aka your ego. You are disconnected from a deeper truth and ignoring one or more of your core values.

1. I am absolutely right! You are convinced beyond a doubt you are right (and, if there is another party involved, they are total wrong) and are a bit defensive. “I am miserable at this company, doing things that challenge my morals, but my options fully vest in less than 24 months – I can’t walk away from $1.5 million, that would not be the right thing to do to my family.”
2. I don’t find anything funny about this. You are heavy, serious, angry, resentful, vengeful, or emotionally shut down while you are contemplating the decision. “I just feel awful suing these guys but hey this is a business decision.”
3. I don’t feel so good. You feel queasy in your stomach, tired, you have a stiff neck or back, or you can’t sleep well. Your body is primal, can’t play mind games and is talking to you.
4. I feel happy, so happy. You feel ungrounded, tending toward over-celebration. There is a difference between excitement and peace. “We are going to beat those evil guys. I am so happy I could gloat and party for days.”

In my case the worst decision was to hire a key executive who would later cause insurmountable financial and cultural damage to my company. I let myself and my team be overly influenced by bankers. I hired a big company executive whose values were very different than my co-founders and I. We wanted that IPO so badly we forgot to ask enough questions in our interviews and overlooked missing leadership qualitities in our candidate. As a result the spirit and life of the organization drained, the top team moved too slowly and spent money ineffectively. If I had paid attention to these indicators, I might have averted the resulting disaster.

When you experience the warning signs mentioned above, stop what you are doing, breath deeply three times and take the time you need to connect with your heart/gut/spirit. Your deeper wisdom will tell you what to do.

If you still don’t know what to do about your dilemma, envision that you are explaining your decision to a group of ten year olds. Picture them asking something like, “How do you think the other person felt when you did that?”

We are naturally compassionate, yet our intellect gets in the way. You may be surprised that once you stop and listen in this way you never make decisions in the same way again. You will quickly become one of those people that others say “does the right thing.” Even more valuable is the peace you find inside.

Invite Brian to give the keynote at your next leadership event. Brian is hitting the road doing more speaking engagements. His message is targeted to leaders seeking greater effectiveness in relationships and communication. Senior managers have enjoyed his talk entitled Why Do Smart People Do Stupid Things?: The Top Ten Lies Leaders Tell Themselves. Brian talks about how he made and lost $50 million in one day and what he learned about life and leadership. Contact Brian.