HOW BAD DECISIONS SINK ORGANISATIONS

Organisations rise or fall based on the quality of leadership decisions, writes LINUS OKORIE

Leadership is neither about holding a title nor commanding authority. It’s about making smart, strategic choices that drive an organization forward. Every decision a leader makes, from hiring key personnel to entering new markets, sets the trajectory for success or failure. Unfortunately, history is littered with examples of leaders who made catastrophic decisions that led to their organizations’ downfall. The ability to think critically, adapt to new information, and weigh long-term consequences separates competent leaders from reckless ones. So, decision-making for leaders is both an art and a science; those who fail to master it often pay the price.

A single poor decision can trigger a chain reaction that spirals out of control. For example, a misguided expansion strategy can drain financial resources, alienate employees, and damage a brand’s reputation. Poor leadership decisions often manifest in ways that are hard to correct—whether it’s a failure to anticipate industry changes or an inability to recognize internal weaknesses. Nokia, once a dominant force in mobile phone market, serves as a cautionary tale. Its leadership dismissed the rise of smartphones and failed to adapt quickly, leading to a steep decline that allowed competitors like Apple and Samsung to seize the market. Ignoring market trends and consumer demands proved fatal for the once-mighty company.

History has provided us with numerous cautionary tales of leadership failure. Enron is one of the most notorious examples of corporate arrogance and mismanagement. Top executives engaged in fraudulent financial practices to mask the company’s debts, leading to one of the biggest corporate collapses in history. The leadership’s unwillingness to embrace transparency and ethical decision-making bankrupted the company and also destroyed the careers and investments of innocent people. Blockbuster’s downfall followed a different but equally disastrous path. At its peak, it had the opportunity to acquire Netflix for a mere $50 million, but its leadership dismissed the idea, convinced that their traditional business model would remain relevant. Today, Netflix dominates the global streaming industry while Blockbuster has all but vanished.

Ignoring expert advice is a hallmark of poor leadership. Kodak had a working prototype for digital cameras as early as the 1970s but refused to fully embrace the technology, fearing it would cannibalize its film business. Despite internal warnings, their leaders held unto outdated strategies, ultimately leading to the company’s bankruptcy in 2012.

Political leadership offers equally stark examples of disastrous decision-making. The Vietnam War under the 36^th U.S President, Lyndon B. Johnson escalated due to poor intelligence assessments and an unwillingness to listen to dissenting voices within his administration. His belief that increasing military involvement would lead to victory resulted in prolonged conflict, widespread casualties, and damage to the credibility of the U.S. government. Similarly, the fall of the Soviet Union under Mikhail Gorbachev stemmed from economic mismanagement and an inability to control internal political dynamics, leading to the disintegration of the once-powerful state.

One of the deadliest combinations in leadership is arrogance paired with ignorance. Leaders who assume they know everything tend to dismiss alternative perspectives, resist feedback, and make impulsive choices. This overconfidence can blind them to risks that are obvious to others. The failure of Yahoo illustrates this point. Despite multiple opportunities to refine its business model, Yahoo failed to innovate and lost relevance in the digital age. Failing to adapt to market realities is another critical mistake. Markets evolve, consumer preferences shift, and technological advancements disrupt industries. Leaders who ignore these shifts often find themselves leading sinking ships. In contrast, companies like Amazon and Tesla thrive because their leaders anticipate changes and stay ahead of the curve.

There are another set of leaders who surround themselves with individuals who only agree with them. Unknown to them, they are setting themselves up for failure. Healthy disagreement and critical debate lead to better decision-making. When leaders refuse to be challenged, they create echo chambers that reinforce poor strategies. The downfall of Theranos, led by Elizabeth Holmes, is a prime example of a toxic culture where dissent was silenced, and bad decisions went unchallenged. The Nixon administration’s Watergate scandal is another political example of leadership failure fueled by an unwillingness to hear opposing viewpoints. Nixon’s paranoia and reliance on a tight-knit group of loyalists led him to approve unethical tactics, ultimately resulting in his resignation.

Smart leaders don’t make decisions on impulse. They analyze data, consult experts, and weigh potential outcomes before acting. Strategic thinking allows them to foresee challenges and prepare for contingencies. Jeff Bezos built Amazon’s empire by taking calculated risks, testing ideas, and constantly iterating based on feedback. Great leaders never stop learning. Whether through reading, mentorship, or executive training, they seek knowledge that keeps them sharp. Warren Buffett dedicates much of his time to reading and learning, a practice that has helped him make consistently smart investment decisions. Similarly, a strong focus on data-driven decision making, thorough analysis, and a holistic approach to assessing risks and opportunities is a leadership advantage.

A strong leader builds a team that offers diverse perspectives and isn’t afraid to challenge ideas. Satya Nadella’s transformation of Microsoft is another example. He fostered a culture of collaboration and open dialogue, shifting Microsoft from a stagnating tech giant to an industry leader. The right team is not just skilled; it is empowered to speak up and contribute to the decision-making process. In politics, Franklin D. Roosevelt surrounded himself with a diverse group of advisors known as the Brain Trust, ensuring that major policy decisions during the Great Depression and World War II were based on well-rounded perspectives rather than blind loyalty.

Self-aware leaders recognize their strengths and weaknesses. They acknowledge when they lack expertise and seek guidance from those who have it. Ego-driven leaders, on the other hand, refuse to admit their mistakes, doubling down on bad decisions instead of course-correcting. The best leaders understand that failure is a part of growth. Instead of denying mistakes, they embrace them as learning experiences. When Steve Jobs was ousted from Apple in 1985, he spent years refining his leadership approach. When he returned to Apple in 1997, he applied those lessons to build one of the most successful companies in the world. Humility and adaptability were key to his transformation.

To ensure intelligent decision-making, leaders must encourage dissent, rely on data, invest in mentorship, continuously adapt, and develop self-awareness. Creating an environment where employees feel safe to challenge ideas leads to better decision-making. Using facts and insights to guide strategic decisions instead of relying on gut feelings alone ensures that leaders make informed choices. Learning from those who have successfully navigated similar challenges and staying informed about industry trends helps leaders adjust their strategies accordingly. Regularly assessing leadership performance and seeking honest feedback allows leaders to recognize areas for growth.

Leadership is not for the ignorant, the arrogant, or the stubborn. It requires intelligence, adaptability, and the humility to recognize one’s limitations. Organizations rise or fall based on the quality of leadership decisions. Smart leaders embrace strategic thinking, surround themselves with diverse perspectives, and continuously evolve to meet challenges head-on. The question is—will you lead wisely, or will your decisions sink the ship? The choice is yours.

 Okorie MFR is a leadership development expert spanning 30 years in the research, teaching and coaching of leadership in Africa and across the world. He is the CEO of the GOTNI Leadership Centre.