CNN Interview
Why it's easy to see no evil, speak no truth at work
By Eliza Ridgeway for CNN
Posted 1st March, 2011

(CNN) -- Bearers of bad news don't get a lot of encouragement in the work world. The whistle blower who exposed Bernard Madoff's Ponzi scheme was ignored for years, as skeptics kept quiet and people counted on profits that really were too good to be true. In a new book, entrepreneur and CEO Margaret Heffernan argues that all of us give in to the dangerous temptation to ignore uncomfortable truths. And by ignoring what's right under our noses, she says, we make bad business decisions. Drawing on cases from history and the business world, she describes how small acts of avoidance can snowball into disasters like last year's Gulf oil spill and multi-billion dollar Ponzi schemes.

Heffernan recently spoke with CNN about her book, "Willful Blindness: Why We Ignore the Obvious at Our Peril." An edited version of the conversation follows.

CNN: Where did the idea of "willful blindness" start for you?

Margaret Heffernan: I read the transcript of the trial of Jeffrey Skilling and Kenneth Lay and in the instructions to the jury, the judge cited the legal concept of willful blindness -- that if there is information that you could have known, and should have known, but somehow managed not to know, the law treats you as though you did know it.

I thought of all the other areas in which willful blindness has a role, both in history and in the present day. Most major accidents, disasters and crimes play out in full public view -- the question is not what's hidden and secret, but how can this happen in public and nobody do anything? To relate it back to Enron, I kept thinking -- how could Ken Lay not know how dishonest his company was?

These things are knowable -- it's just that for a wide variety of reasons, people prefer to look away. The argument of my book is that if we were more prepared to look, we might put ourselves in a very much safer position.

CNN: How does the idea of willful blinding apply to the small stuff -- the everyday decisions we need to make in a business workplace?

MH: It can be the smallest thing that tips the balance -- it can be simply asking questions like "what would we do if it turned out that this data point was wrong?" You're not saying, "I think this is wrong and you're all doomed," just asking a tiny question that opens a window.

Often a lot of really bad decisions aren't taken in a giant leap. It's lots of tiny decisions, not one of which seems to make any big difference, none of them big enough to argue about. You should think hard about asking -- where are these baby steps taking us?

At BP after aggressive mergers and acquisitions they had tons of debt that they needed to reduce, and the decision came down from headquarters that every year they had to cut 25%. And every year, everybody did this blindly. What nobody seems to have done is say, are all cuts equal?

The biggest thing is to question: does the thing you're being asked to do make sense? And if it doesn't make sense, why doesn't it? And talk to some of your colleagues and find out if doesn't make sense to them, either.

CNN: What's an example from your own career of a "blindness" that got in the way of doing good business?

MH: In 2001 I was pitching to Disney that they should have an online presence for digital downloads of movies. What I experienced was that nobody in the film industry was prepared to take the risk-- nobody wanted to be the first, and they all sort of hoped that it wouldn't happen. And then they watch their marketplace disintegrate.

There are a lot of good studies about "organizational silence"-- you have a meeting, everyone knows there's a gigantic elephant in the room, and nobody will discuss it. One example an executive in the packaged drinks industry gave me was that for years, his company knew that vitamin drinks were going to be a huge deal but they didn't have one, and wouldn't talk about it. It went on for years and years, and what happened was that they just got clobbered in the marketplace.

CNN: In the last chapter of your book you offer some personal ways professionals can integrate these ideas into their own lives.

MH: Everybody in the world should go on a negotiating course, because conflict managed well is a negotiation. Develop the negotiating skills you need to be able to surface uncomfortable truths in a way that people can take them onboard.

We can't have functional organizations if people aren't willing to tell the truth. If all they'll do is go along, then we're all going to run into an iceberg. It's fundamental to self preservation -- if the people at Enron had raised questions very much earlier, they might still have an employer.

CNN: How can managers build this environment into their corporate culture without just paying lip-service to wanting to hear the unvarnished truth?

MH: Everybody will say, "I want you to bring me the bad news, my door is always open," but most people won't really mean it. You need to show that you mean it, and you need to reward the people who bring you the bad news.

I believe this more firmly having run organizations myself -- there's always more knowledge inside organizations than is readily available or visible. I would say, having run five companies, that I depended lock, stock and barrel on the people I could count on to always tell me the truth no matter how bad it was -- they saved my bacon on multiple occasions.

You cut that pipeline off at your peril. Many of the organizations I've studied in my book that made catastrophic decisions did so because they were run by imperial-type leaders, who thought they knew everything and learned the hard way that they didn't.