Wednesday, December 31, 2008

Why Do Smart People Make Dumb Business Decisions?

Blindspots. That's the answer according to author and clinical psychologist Madeleine L. Van Hecke. Her new book is entitled Blind Spots: Why Smart People Do Dumb Things, and it addresses a list of 10 mental glitches or blind spots that make very intelligent people do very unintelligent things.

Some of these include "Not stopping to think," "Not noticing," "Jumping to conclusions" and "Missing the big picture."

This makes me think of companies like Ford and Chrysler who built all those cars, when they knew they wouldn't be able to sell them. Or those financial executives at Washington Mutual and Wachovia who authorized all those subprime mortgage loans to families they knew couldn't afford the homes.

Or even those of us who invest a lot of money into our ideas without doing market research. Or those of us who fall victim to some service that guarantees results that we know are too good to be true.

In her book, Van Hecke reveals that EVERYONE HAS BLINDSPOTS and encourages people to embrace and understand their weaknesses to improve personal and professional relationships.

I haven't read the whole book yet, but so far its really good and it's getting a lot of five star reviews on One person said that its "a good book for business groups, or anyone wishing they didn't stumble over their own forehead-smacking blunders."

I'd have to agree; It's a must read. Add this to your collection.


  1. Sounds like what happened when i got married.

  2. You talk of the car companies as if they really saw it coming. There's been research on this and they didn't. They couldn't get their heads stuck from the sand. Not being able to see something is a blindspot, ignoring an oncoming car isn't.

    And those Wamu execs didn't care whether those people could pay their mortgages. They lent the money and then sold a bunch of other fools the bad loan. That's a blindspot.

    For a somewhat historical analysis of blindspots check out Ed Tanner in "why things bite back: technology and the revenge of unintended consequences."