We All Need A Fool

The most common root cause of failure in business is:

The failure to act on alarms and indications of problems because they come wrapped in opposition to "The accepted wisdom".

The Accepted Wisdom
This is the company position on something. Usually defined and planned to a degree of accuracy only possible when the White Board is nearly full or there are only 2 sheets of paper left on the flip-chart.

You Need a Fool
In 1995, British Airways appointed Paul Birch as the official BA 'corporate jester'. An entertaining and thought provoking speaker, Birch tells the story of approaching his director of corporate strategy with the idea. His justification was that an official jester might play a useful role in the company, just as medieval name-sakes had done in royal courts. The logic was that the modern board of directors is a bit like a medieval court, where no one questions the king or senior courtiers, because "they have become far too important for anybody to challenge ... as long as they can't possibly be wrong, they can continue doing the wrong things all the time and never know it".

Who Do You Use
If you are really lucky (or a great Leader) as an MD, your team will automatically perform this role for you. You have created a board environment where people feel able to challenge the consensus. People in your team will take it in turns to call for a sanity check - to make sure that your leadership team is not in danger of becoming a stampeding herd heading for the next corporate disaster.

Most organisations will have to work at this. Some will need an external input. In the form of a Board Mentor or Non-Executive Director (NED).

External Catalyst
Use the right external help, with a balanced perspective. And the ability to work alongside your team and to ask the awkward questions. Then your team will make business decisions based on facts and data more often. Relying a lot less on intuition and herd instinct.