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Critical Thinking

Why Smart People Do Dumb Things

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This morning, my wife really got on my case about a decision I made. She was upset that I didn’t listen to her when I should have. Is she right? I don’t know. Probably. Would it have been smart to listen to her? Well, duh. So why didn’t I? Good question.

It’s not that I’m dumb. And I certainly didn’t intend to do anything stupid. But that’s exactly what I did.

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One thing’s for sure. It wasn’t the first time I’ve done something stupid. And it definitely won’t be the last.

We all do dumb things. Usually the impact is minimal. If ticking off your spouse is the worst of it, count yourself lucky. But sometimes, the result of your stupidity can be devastating. It can affect your life, your family, your career. And if you happen to be in a position of power, it can affect thousands, even millions of others.

Over a four-year term, I bet a U.S. president makes hundreds of important decisions that affect us all. And no matter how smart he and his advisors are, some of those decisions are bound to be dumb.

If you lean right, I bet you think nearly all of President Obama’s decisions fit that description. You may even think half the nation is dumb for electing him, not once, but twice. Funny thing is, folks on the left probably feel exactly the same way about George W. Bush and those who voted for him.

No matter which way you lean or how smart you really are, like me, I bet you’ve made some royally dumb decisions.

Just take Hewlett-Packard's (NYSE:HPQ) board of directors, for example. If you read their bios, they’re clearly a bunch of really smart and accomplished people. And yet, the last smart decision they made was to appoint Mark Hurd chief executive way back in 2005. Hurd pulled off a miraculous turnaround and, for five years, everything was hunky dory.

Then came that fateful sexual harassment claim. You know, the one that turned out to be bogus. Well, that seemed to be a turning point. That, to me, was when the board got off the Smart Highway at the Stupid Town exit.

And even though they found the claims against Hurd to be baseless, H-P’s board fired him anyway in what Oracle CEO Larry Ellison called, “the worst personnel decision since the idiots on the Apple board fired Steve Jobs.”

Then the board hired Leo Apotheker as its new CEO, even though he’d been fired by SAP for nearly destroying the software giant. Why in the world, you might ask, would they do something so stupid? Well, two thirds of the board voted for Apotheker without ever having met the guy. And some directors had no idea what had transpired at SAP. Go figure.

Apotheker, of course, made a real mess of things, launching operating systems and tablets with great fanfare, then killing them off a few months later. But the icing on the cake was when he more or less announced that H-P would be getting out of the hardware business to become a second rate software company.

Still, it would be a mistake to let Apotheker take all the credit for that. After all, H-P’s board approved his nutty strategy, including that ill-fated acquisition of Autonomy. Chairman Ray Lane even went on tour with Apotheker to sell the idea to the investment community, but the smart money wasn’t buying it. So the board fired Apotheker after just 11 months on the job.

If you think that was the end of all the nonsense, think again. Instead of doing what it should have done in the first place – initiating a professional search for another Mark Hurd – the hapless board immediately turned right around and appointed Meg Whitman, one of their own directors, as CEO.

Never mind that the former eBay chief had absolutely no enterprise, IT, hardware, software, complex supply chain, or turnaround experience.

And never mind that Whitman had recently demonstrated an unprecedented level of foolishness, spending $144 million of her own money and over $300 million in total in a losing bid to become governor of California. Why, anybody would do something so ridiculous, I have no idea.

Around that time, Tom Perkins, a former H-P director and founder of famed Silicon Valley venture capital firm Kleiner Perkins, said, “[H-P] has got to be the worst board in the history of business.” And yet, at last week’s annual meeting, H-P shareholders voted to keep the board intact, although Lane and two others just barely kept their jobs by a narrow margin.

So, in the case of H-P, one of the world’s biggest technology companies with over 300,000 employees and more than $100 billion in revenue, we’ve had CEOs, board directors, and thousands of shareholders making decisions that few would argue are beyond dumb.

I know it sounds like I’m picking on H-P, but you know they’re not alone. Like I said, we all do dumb things. We all make terrible decisions. And we’ve all shot ourselves in the foot at one time or another. I know I have. Just ask my wife.

So why do we do it? Well, there’s a whole laundry list of reasons why otherwise smart people do dumb things.

Sometimes we choose the path of least resistance, the easy way out. Sometimes we succumb to groupthink or listen to yes-men who sugarcoat the truth. And sometimes we don’t listen to the people we should listen to.

Sometimes we’re overconfident, full of hubris, full of ourselves, and full of our ideals. Sometimes we’re too close to the problem and lack perspective. And sometimes, we’re just in over our heads, something we in the business like to call the Peter Principle.

The point is we all screw up. It happens. A lot.

So here’s what I want you to do. I want you to think about the last time you did something really dumb. Oh yes you did. And I want you to keep that memory close at hand. So the next time you start to pass judgment, before you can even get the words “how can they be so stupid” out of your mouth, I want you to remember that they’re human. Just like you.

What do you think?

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