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Hubris makes smart people look dumb

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Hubris—that false sense of superiority—is a funny thing.

It can afflict even highly intelligent leaders who never know they have it because they are afflicted.

But there’s hope. If you attune yourself to hear warnings from below—that is, if you adopt a degree of humility, the opposite of hubris—you may absorb enough warnings to avert disaster.

Two examples will illustrate:

At a meeting shortly after 9/11, FBI Director Robert Mueller explained why the agency hadn’t acted on information it gathered beforehand. The FBI actually had the names of the plotters and where they were. Agents with this intelligence tried to warn their supervisor that an attack was imminent.

And yet the FBI did nothing.

Mueller said the FBI’s culture bars agents from acting on their own information, presumably to avoid having agents run off on wild goose chases. Instead, they must send what they know up the line, through a system built to prevent the FBI from acting on bad tips.

The rub: People at the top of any hierarchy, who we expect to be the most well-informed and wisest in their organizations, tend to look at data from subordinates with condescension.

After all, if something were important, they already would know about it, right?

Another example: More than two years before the onset of the 2008 financial crisis, a slightly disheveled financial wonk named Lewis Ranieri warned a roomful of executives that the subprime mortgage market was about to blow up and would take world markets with it.

Now, why should these leaders in banking, investment, insurance and so forth pay any attention to this guy? Because he was one of the inventors of mortgage-backed securities, a product that was about to explode.

But the executives thought themselves wiser about markets than he was, and they paid a steep price for their superiority.

The lesson: You don’t have to have all the answers. But you do need an open mind.

— Adapted from Common Purpose: How Great Leaders Get Organizations to Achieve the Extraordinary, Joel Kurtzman, Jossey-Bass.

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