“Dan”, (formerly a senior executive with a global firm) and his team were provided a budget and tasked with creating an advanced technology firm. The plan specified this new business to be spun off as an independent organization, with future strategic partnerships established with the parent based on innovations it developed.
Dan is a highly trained, well-respected expert in his technical discipline.
Talking with him, an incredibly common bias soon became apparent…you know: the one where: “if you’re a hammer…”
Nothing I said could convince Dan
computer experts would be disastrous for leadership & management.
We quickly parted ways.
In 2½ years, the new org had run through more than 200% of it’s projected budget,
was bleeding talent, had no viable products in the pipeline, and no customers.
Sometimes you hate to be right.
They had a great idea, but fell in love with a bad approach: that technical geniuses would be able to lead like Steve Jobs.
In my practice, sunk cost fallacies seem the most common kind of decision error senior execs make.