There’s A Disease Eating Away at Many Organisations

Whatever you choose to call this insidious behaviour it’s about not asking too many questions, refusing to know and acknowledge what’s going on around you, whether consciously or unconsciously. In plain terms it’s turning a blind eye to what’s going on,

Wilful blindness has afflicted mankind for centuries. Countless examples exist throughout history. Whether it’s the Trojan Horse, the absurd World War 1 tactics of marching steadily into machine gun fire or the Madoff and Enron scandals.

Nelson gave wilful blindness a memorable and romantic twist at the Battle of Copenhagen. With a telescope at his blind eye he announced he could not see the signal telling him to end the action and retreat. That’s a bit of wilful blindness we tend to praise on the grounds that it worked out fine in the end.

More recently we have witnessed wilful blindness in full sail in the behaviours of senior management at News of the World. “Wilful blindness” and “wilful ignorance” were referred to four times in the MPs’ report into phone hacking and regarded as one of the most damning findings.

The allegation – levelled at Rupert and James Murdoch as well as the directors of News International and its parent News Corporation – was particularly pointed, as it reflected language in the US Foreign and Corrupt Practices Act. When directly confronted with the whole idea of their possible wilful blindness, the Murdochs remained noticeably silent, which says it all.

We have also cringed at the determined blindness of the now resigned head of FIFA who persisted in claiming he’d never seen any evidence of bribery during his watch. Likewise, the two heads of Deutsche Bank who have just resigned, also tried to hide behind an internal report on illegal trader activity which claimed no one at the top knew anything about it.

Within financial services, wilful blindness is alive and well and used with depressing regularity as a form of defence.

For example, the failure of HSBC to uncover money laundering in its Mexico offices, was an acute case of “let’s not go there and find out “. The CCO fell on his sword, essentially for not looking hard enough—for not “seeing” what was going on. .

Similarly, the former head of HSBC’s private banking operation denied any knowledge of tax evasion at its Swiss arm in the mid-2000s and said he did not bear direct responsibility for any illegal activity.

Chris Meares, in charge of the division between 2006 and 2011, blandly told MPs he could not account for the “direct actions of people” at the Geneva subsidiary of HSBC, and that he was “not aware of a tax issue emerging until 2010.”

Mr Meares, gallantly took responsibility for “oversight and control failings” that could have led to tax evasion, but said “I do not take direct responsibility for the direct actions of people in Switzerland”. “None of this was flagged up, sitting to me in London, that we had an issue,” he said. Presumably he expected an envelope to arrive on his desk with detailed descriptions of what was happening under his watch.

Understandably, the chairman of the Public Accounts Committee, responded with incredulity to claims from Meares and non exec director Rona Fairhead, the BBC Trust chair and former head of HSBC’s audit and risk committees, that they were “unaware of any illegal behaviour.” If they were genuinely unaware then neither should be allowed in a position of such authority again.

Sadly, wilful blindness is an all too human problem and not confined to any one place, institution or even country. The causes are psychological, social and structural. But essentially it’s about a willingness to confront the truth, and a readiness to speak up about what’s happening and not ignore it.

Power is a great generator of such blindness. So much so that some leaders manage to almost completely isolate themselves from reality. They turn wilful blindness into an art form.

When Richard Fuld was CEO of Lehman Brothers, he perfected what what one commentator calls “the seamless commute”. A limo drove him to a helicopter which flew him to Manhattan where another limo whisked him to the bank’s offices. Front and lift doors were timed so that Fuld could ascend to his office without encountering a single employee.

Entire institutions not just single CEOs, can suffer from wilful blindness as they pursue policies which, while patently not working, continue to be pursued as if they were.

For example, in a complex yet well researched report The Oaklands Institute has pointed out how the World Bank’s continued policies of ranking countries are clearly impoverishing smallholder farmers.

Even beyond institutions. this disease can flourish across borders, as is happening with climate change. Our collective failure to enact significant climate policy on a global scale can no longer be regarded as an unfortunate omission. The greenhouse effect is 19th century news. It had been discovered by 1824, shown in a laboratory by 1859 and quantified by 1896.

The term “global warming” itself has been around since 1975. The basic science has been settled for decades. Using our atmosphere as a sewer for our carbon emissions is uneconomic, unethical or worse. All seven billion of us — especially the one billion or so high emitters responsible for most of the pollution — are committing errors of commission every single day.

Yet no single person is responsible for any single climate change-related loss of property or loss of life. But collectively we all are. That holds particularly true for elected officials, who have no excuse not to know.

Don’t be accused of wilful blindness

Compliance staff need to be particularly aware of the wilful blindness disease and take active steps to expose it. This means, when faced with possible “red flags,” acting to protect the interests of the company and themselves. How? By asking probing questions when suspicious activity comes to their attention—or even when it doesn’t. 

This does not mean waiting for news to percolate to their desk, as seemed to be the stance of the HSBC director over the Swiss tax evasion scandal.  Instead, it means being highly proactive, checking the operating environment to sniff out potential dangers.

Documentation is also important. So if the responses received continue to raise questions there is tangible and written evidence to put before management or corporate counsel.

A complete and accurate written record of the questions asked, the responses received and steps taken to tie up any loose ends can go a long way to avoiding the charge the company or individuals could have or should have done more to investigate “red flags” or allegations of wrongdoing.

Are you sure it’s wilful blindness?

The lawyers are having a field day with this whole issue of course. In the US a Supreme Court ruling was supposed to have made the whole situation much clearer and extended it from the criminal into the civil field.

In the Global-Tech case involving patents, the Supreme Court developed a uniform definition of wilful blindness for all lower federal courts. It defined a wilfully blind defendant as “one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.”

In practice though,  it seems there are still ambiguities. It is therefore important for even well-informed compliance staff to avoid jumping to conclusions about whether one or more executives they are encountering are actively avoiding facing up to uncomfortable and ultimately reputation damaging  behaviour.

What can we do about it?

Given that wilful blindness is a natural human tendency to self-deceive and we cannot easily avoid it, what can leaders and others do about it?

According to Margaret Heffernan who has studied the phenomenon in depth there are seven basic steps—slightly adapted they are: [message type=”custom” width=”100%” start_color=”#D8D8D8″ end_color=”#D8D8D8″ border=”#BBBBBB” color=”#333333″]

COUNTERING WILFUL BLINDNESS

1. Re-examine Your Life.
   Sounds drastic! Well, we do this a lot when we’re younger, but later we only do it occasionally if at all.Perhaps it gets too draining to keep questioning your life, but doing it can help counter the wilful blindness forces at work.
2. Take in different perspectives.
   This is simply about absorbing several points of view. The CEO who refused to make a decision because everyone in the room agreed with the one proposed was seeking fresh insights and consciously fighting wilful blindness and group think.
3. Recognise the uniformity (homogeneity) of our lives.
   Put more effort into reaching out to those that don’t fit in. Diversity here is less about political correctness and more an insurance against internally generated blindness that leaves leaders and institutions  exposed and out of touch.
4. Know the limits of your cognitive capacity.
   Go home! Working excessive hours takes a mental toll that affects our cognitive ability to think straight.
5. Seek disagreement and hire dissent.
   This is most critical and often the most strongly opposed. Leaders need to create a state in which employees have the courage to do something—to provoke as one of their essential roles.Outsiders—whether you call them Cassandras, devil’s advocates, dissidents, mentors, troublemakers, fools, or coaches—are essential to any leader’s ability to see.
6. Challenge Complexity.
   Encourage people to be sceptical about complexity and perhaps also the power of technology.  Being impenetrable or lack of transparency is sometimes seen as a strength, in fact it’s a terrible weakness and causes blindness. When problems arise it can then be hard to find a way out of them.
7. Endure the Noise.
   Silence—fear of debate becomes self-perpetuating. Without conflict, everyone remains afraid and blind. In an organisation celebrate those who make the noise, however uncomfortable it makes people feel. As Anita Roddick of Body Shop one proclaimed if you want to know the future of your organisation, search out the mavericks.[/message]