Bernard Madoff arrives at federal court in New York City on Thursday, March 12, 2009
Denial: Why Business Leaders Fail to Look Facts in the Face--and What to Do About It
By Richard S. Tedlow; Portfolio; 261 pages
It's not hard to understand why Henry Ford loved the Model T just as it was. After all, the sturdy black car had made him rich and famous. But by the 1920s, car buyers were developing a taste for different colors and models. Ford wouldn't budge. As he wrote in 1922, "Any customer can have a car painted any color that he wants as long as it is black." So car buyers fled. By the end of World War II, Ford Motor was near bankruptcy.
How could a visionary like Ford miss the obvious warning signs? Denial, says Tedlow in his smart new book--"the unwillingness to see or admit a truth that ought to be apparent and is in fact apparent to many others." Toyota's management exhibited the same behavior recently in refusing to believe the company could make faulty cars. The author believes that denial "may be the biggest and potentially most ruinous problem that businesses face, from start-ups to mature, powerful corporations."
Tedlow, a professor at the Harvard Business School, presents a lively history of corporate blind spots and blunders, although some may be a tad familiar. Take Akron, Ohio, once the headquarters of the U.S. tire business. Then radials rolled in. The industry ignored the trend, sure that drivers would reject tires from foreign firms. Big mistake. Or take the Coca-Cola Co., where the word Pepsi was never to be used. The company's refusal to acknowledge the aggressive competition led straight to the New Coke fiasco in 1985. And then there is IBM, whose "hidebound culture and leadership" disastrously denied the coming of the personal computer.
But some companies look squarely at hard truths, says Tedlow, and come out winners. A prime example is Johnson & Johnson, whose product Tylenol was tampered with in 1982, resulting in seven deaths from cyanide poisoning. But Johnson & Johnson CEO James E. Burke "never attempted to minimize or sugarcoat the suffering of the victims and their families--or, remarkably, his remorse at his company's role, however innocent, in the tragedy." The brand survived.
The lesson? Tell the truth, says the author. Welcome honest talk, and never forget that "the time to deal with denial is right now, this very day. Don't wait for a crisis. It will be too late."
THE BOTTOM LINE:
Unlike Henry Ford, don't deny what you see coming in the rearview mirror.
Louder Than Words
By Joe Navarro; HarperBusiness; 242 pages
Does it feel like everyone at work is judging you? They are, says behavior expert Navarro, and not just on what you say: "We are being observed to see if we look sharp or dreadful, presentable or dreary, alert or tired, interested or bored, confident or timid." The author, a former FBI agent, believes that nonverbal communication can be the make-or-break factor in business. Thank goodness it's learnable, he says. Maybe someone should have taught the bosses of the Detroit Three about it, he says, before they flew to the capital in private jets to beg for a $25 billion bailout.
THE BOTTOM LINE:
It's like Mom told you: Stand up straight, dress well, keep your office tidy, and pay attention.
No One Would Listen