Your team won’t tell you this
Hi Everyone,
The higher you go in an organization, the less accurate the information you receive. Direct reports filter what they share, meetings tilt toward agreement, and a strong track record builds confidence that may not apply to the next decision you face.
Three biases show up repeatedly in the most expensive leadership failures, and the research shows they get worse as your authority grows.
1. Overconfidence grows with every win
Daniel Kahneman called overconfidence the most significant cognitive bias, because it gives every other bias room to operate. When you trust your judgment too much, you stop questioning your assumptions.
A study of Forbes 500 companies found that overconfident CEOs had 65% higher odds of making acquisitions than their peers, leading to over $220 billion lost for shareholders in merger deals.
Research also shows that CEO power itself increases the probability of overconfidence. Every win reinforces the belief that your instincts are reliable, even when the next decision involves a completely different context.
2. Sunk cost bias gets stronger the more you've invested
Kodak's engineers invented the digital camera in 1975. By 1981, internal research predicted digital would replace film.
Leadership knew and kept investing in chemical processes because walking away meant admitting those investments were wrong.
In 2001, Kodak acquired the photo-sharing site Ofoto and used it to push people toward printing rather than digital sharing. The company went from a $28 billion market cap in 1996 to bankruptcy in 2012.
3. Confirmation bias filters out the information you need most
At Nokia, INSEAD researchers found a "culture of fear" where middle managers sent optimistic progress reports about Symbian even though they knew internally it couldn't compete with iOS.
The information that could have changed the strategy never made it to the top.
Nokia's market share dropped from 41% to near zero between 2007 and 2013.
Two things to try this week
Speak last: When you share your position early in a meeting, the discussion shifts toward agreement with you. Concerns that could change the outcome stay unspoken, and what you hear gets filtered through what people think you want.
In your next meeting where a decision is on the table, stay quiet until everyone else has contributed.
The first few times will feel slow (expect pauses, vague initial answers, people looking at you for a signal). Sit with it. When you do speak, acknowledge the strongest point that goes against your position.
Over a few weeks, the quality of input you receive will change noticeably.
Ask the outsider question: When Andy Grove and Gordon Moore were struggling to exit Intel's memory chip business in 1985, Japanese competitors had taken their market share from over 80% to under 3% – Grove asked Moore a question that broke through the paralysis.
"If we got kicked out and the board brought in a new CEO, what do you think he would do?"
Moore answered immediately: "He would get us out of the memory chip business."
The question strips away emotional attachment, identity, and sunk costs.
It puts you in the position of someone looking at the same facts without any history in the role. Intel pivoted to microprocessors and grew to $55 billion in revenue by 2015.
For one strategic question you're currently wrestling with, try the above exercise and write down the answer.
If it's different from what you're doing now, that gap is worth examining.
Go deeper
👉 McKinsey: The case for behavioral strategy – the research behind why better decision processes improve ROI by 7 percentage points
👉 Harvard Business Review: Before You Make That Big Decision – Kahneman's 12-question checklist for catching bias before a major call
👉 Farnam Street: The Work Required to Have an Opinion – a short read on why strong views need active stress-testing
Coming up tomorrow
Tomorrow's issue is about 1:1s – specifically, five questions that change the whole conversation.
That's it for today. Thanks for reading!
P.S. Have you ever kept a project or strategy going because of what you'd already put into it, rather than because it was still the right call? We're curious how it played out – hit reply and tell us.