4 Reasons Leaders Make Bad Decisions

Everyone knows that great leaders make great decisions. Right? Not always.

As Bill Gates once said, “Success is often a lousy teacher.” It’s easy for a leader who has experienced a tremendous amount of success in the past to think that whatever they do next will be just as successful. But often that is not the case.

There are many reasons people make bad decisions. Here are four:

1. They decide to stay with what’s working, failing to see that things will inevitably change and they get caught off guard.
2. They don’t study history so they are sure to repeat it.
3. They think that a new idea or strategy is superior to continuing the one that has been working so they change course too often and get out of step with their market.
4. They can’t tell which of the three directives above to follow, so they do nothing and let the market decide their fate.

Many successful leaders leave their organization to try their hand on the next big thing only to fail. Even Steve Jobs of Apple, Inc. had limited success with his new company, NeXT Computer after Apple’s CEO and board forced him out of Apple. The NeXT computer’s intended audience was higher education and business markets. Initially priced at $50,000 it did not attract many buyers.

The good news came later when Apple’s board asked Jobs to return to Apple. What came next for NeXT was Apple agreed to purchase NeXT for $429 million and 1.5 million shares of Apple stock.

Knowing the difference between a great decision and a lousy one is the pure definition of a great leader, and that’s something leaders need to learn how to do.