Applied Wisdom: Essential Critical Thinking

In the course of an average day in the company of mediocrity, I feel the need to share a word or two on the subject of wisdom.  The applied knowledge of today’s middle manager reminds me of the story of the drunk pulled over by the police. The officer checking the sobriety of his suspect inquires how many years education the man has, to which the drunk replies, “twenty years; I took the tenth grade twice”.  While the drunk’s arithmetic is technically sound, it’s horribly misapplied. 

In the workplace, such interactions tend to be much less humorous and yet are just as serious as a drunk behind the wheel. Here’s an example. A salesperson that does really well selling widgets in an era of tailwinds may be promoted to a management position. Full of confidence from their success and presented with the opportunity for advancement and increased compensation; the salesperson would rarely turndown the offer.  It would be especially difficult to resist the offer in a corporate culture that does not provide the same accolades for subject matter expertise and craftsmanship as it does to the management career track of the corporate ladder.  The newly minted manager would rarely evaluate their skills as an effective leader to check for areas of improvement let alone consider whether management itself is the best application of their talents. Furthermore, the company would rarely set feedback systems outside of the reporting chain to evaluate the new manager’s skills.  Still in an era of tailwinds without proper benchmarks, the new manager excels on the labor of their direct reports.  As the new manager acclimates to their role, they began to apply what’s always worked for them in the past, the cornerstone of attribution error. They reach into their toolbox of skills, find a lone hammer, and readily apply their myopic view to every problem as if the whole world were a nail.

The new manager, with their limited tools, decidedly micromanages employees rather than selecting appropriate talent and offering the opportunity for failure. They hire new people from known companies because they have not the skill to uncover raw talent on their own terms. They require without the slightest hint on how to inspire. They measure without a tether to the reality of the marketplace. And for all of this poor behavior; they are often richly rewarded so long as the market continues to make them successful despite themselves. Soon new opportunity is upon them. They move up in the company and hire their replacement; the loyalist that never challenged them. Throw in a couple of mergers and now this person is responsible for a large P&L, their tenure lends credibility to their stature, and the mirage becomes perceived reality. Next, the incentive biased search consultant comes a calling and applies his own attribution error by applying the track record of the industry to that of the person sitting in front of him. Now we may call this, once middle manager, CEO.  Thousands of families’ livelihoods depend on this manager that is ignorant of their own weaknesses and that the company’s leadership ranks are filled with his dysfunctional replicates.  A few years ago we called these companies Enron, WorldCom, and Tyco.  One only has to look to today’s headlines and the careers of Lee Abrams and Randy Michaels from the Tribune Company to realize that several leadership ranks are still filled with this cancer.

Applied wisdom requires new leaders to avoid attribution error and man with a hammer syndrome while taking on intense personal evaluation and vast interdisciplinary study to fill their toolboxes with various skills.  Therefore, to ensure leaders have no resemblance to the drunk of this story, we must apply our wisdom with fastidious mental awareness and humility. A leader must think and therefore have command of multiple mental models built upon a framework of resilient confidence and self-awareness. To do so will be going against the grain. The good news is that new leaders have two things going for them.  First, the tide has receded and poor managers are exposed. Secondly, career advancement and pay aren't as they once were, new leaders have much less to lose when challenging the folly of their predecessors!  Warren Buffett and Charlie Munger would be proud if you were to adopt such thinking.


Charlie Munger