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August 22, 2016 Biz Books

Tips for avoiding tunnel-vision management

“The Power of Noticing: What the Best Leaders See” by Max Bazerman (Simon & Schuster, $16).

At work, most people, and in particular executives, focus on what's in their inbox and develop tunnel vision. They forget that their box doesn't contain all there is to be seen. They forget that information in the inboxes of others will impact their ability to do their jobs. They forget that colleagues can help solve their problems.

Noticing and questioning fit hand-in-glove. By asking questions, especially ones involved in testing hypotheses, people make better-informed decisions. Bazerman points out the 1986 space shuttle Challenger disaster could have been avoided if the NASA engineers had asked a simple question: “What effect would low ambient temperature at launch have on an O-ring's ability to properly seal?”

The lack of noticing also appears in what Bazerman calls “motivated blindness.” When people don't want to deal with information, they ignore it. Rather than confronting the issue, they understate the problem. Much of this blindness stems from the organization's culture.

Case on point: After the numerous fatalities caused by the ignition-switch issue came to light, General Motors was forced to confront the safety issue. Internal documents showed that GM had a dictionary of “words not to use” when describing potential problems and bad news. By downplaying the seriousness of potential problems, people didn't notice them. Problem minimization cost GM billions in recall costs and legal settlements — and reputation.

The road to not noticing may also be paved with good intentions that lead to unforeseen consequences. Homeownership was something touted by both sides of the political aisle. Weakening mortgage-qualification standards to allow more people to own homes (and pay property taxes) was generally workable as long as housing values continued to rise. No one asked the question: “What happens if housing prices decline?”

That's exactly what happened when the economy began tanking in 2007. People lost jobs and couldn't afford to pay their mortgages, while others decided against buying homes. Too many homes and not enough demand created a downward spiral in housing prices. Even those who could afford to pay found their mortgage balance far exceeded their home's value; many walked away. The financial crisis deepened because institutional and private investors who bought mortgage-backed securities suffered losses.

What do these situations have in common? No one thought to think about 'what might happen if … .'

Noticing also involves “The dog that didn't bark.” What didn't happen often goes unnoticed. This leads to errors of omission. People notice the harm of action, while ignoring the harm of inaction. Not doing something always has a price.

From a business view, this often plays out when it comes to cost and price management. Example: Walmart's suppliers “must agree to accept any financial or criminal liability resulting from the sale of their products.” Blitz USA, once a large manufacturer of gas cans, had a contract with Walmart. To minimize gas can explosions, it proposed adding an arrestor that would prevent a flame from flowing into the can. Its cost was estimated at about $1 per can. Walmart rejected the design change on the basis of the price increase. To keep its contract with Walmart, Blitz didn't add a common-sense safety feature. It ultimately went bankrupt because of product-liability suits.

Bazerman's message: “Organizational systems affect what their employees will pay attention to — and what they will overlook.” If leaders want to increase noticing across the board, they need to encourage people to ask questions that drive to the why of what's happening and test assumptions about what could happen.

Jim Pawlak is a nationally syndicated book reviewer.

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