The Tuchman Folly Syndrome
There are usually two big reasons why blind spots occur in organizations and leaders.
The first is what I call the "Tuchman Folly" syndrome: a cultural blindness that obtusely acts in ways contrary to their own self interests, especially when other, more reasonable options are available. Every institution, especially those with strong cultures, have a way of seeing things through the same lenses, or "the way we do things here," to use Marvin Bower's definition of organizational culture. The "Johnny One Note" response you hear from financial institutionalists ad nauseam these days is: "Well, in order to keep the best talent, we have to pay them more than our competitors." It's a blind spot that's close to, if not identical to "brainwashing." That of course doesn't explain the egregiously useless expenditures on antique waste baskets and hand painted shower curtains.
The second factor is more of a personality blind spot, a dysfunctional high level of hubris. In general, the people who gravitate toward financial institutions are interested in and smart about making money. When they've enjoyed uninterrupted episodes of success that leads to a reckless sense of entitlement, it leads to the blind spots typical of John Thain and others. It's worked in the past, hasn't it? In "Waiting for Godot," one of the characters says, "Habit is a great deadener." Successful habits are even greater deadeners.
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