New business research explains how powerful are blind to risk
- Powerful people don't see constraints/risks when pursuing goals
- High-power leaders focus intensely on goals, tend to 'leap before looking'
- Low-power people are more likely to consider risks, cautions
Not every company has an Iron Man, but many have a Tony Stark – a highly powerful, intensely-focused individual who often ignores risk in order to achieve his or her goals.
That’s usually a good thing – as long as companies make sure to also hire a Pepper Potts to keep their powerful leaders grounded, according to new research co-authored by a BYU business professor.
“Organizations need to anticipate the tendency of their most powerful members to leap without looking,” said study co-author Katie Liljenquist, a professor of organizational leadership at BYU's Marriott School of Management. “The remedy is to surround them with people who can see other angles, or can play a devil’s advocate role to point out risk. Interestingly, it is the low-power members of the organization who are best equipped to do this.”
The study, appearing online ahead of print in the Journal of Experimental Social Psychology, found that powerful people are less likely to see constraints in pursuing their goals. Meanwhile, their low-power counterparts are more aware of the risks around them.
Liljenquist says the phenomenon mirrors the animal kingdom: Predators have evolved to have an extremely narrow eye focus for tracking prey, but this compromises their peripheral vision.. Meanwhile, prey animals sacrifice such visual focus for more sensitive peripheral vision that tracks movement and potential threats in the surrounding environment.
“In business settings you need both,” Liljenquist said. “You need the people with that unfettered confidence and optimism and the willingness to take big risks, but you need those low-power individuals who say, ‘Hey wait a second. Let’s identify the pitfalls.’”
The study included two experiments, the first of which measured how power affects memory for goal-facilitating or goal-constraining information.
In that experiment, participants were given a goal, such as traveling to the Amazon, and were then primed with a set of statements about the new venture. Half the statements were goal-constraining (“You are afraid of some of the native animals”) and half were goal-facilitating (“You have prior experience visiting jungles”).
Researchers found that high-power participants recalled less goal-constraining information than low-power participants.
The second experiment asked participants to finish a fairy tale about a king and his princess daughter. The results showed that powerful people don’t even conceive of threats when they create imaginary narratives.
Donald Trump is a perfect example of a leader whose confidence guides business decisions. During the first season of his reality show, The Apprentice, Trump offered the winner a chance to manage the construction of the Trump Tower in Chicago – even though the tower hadn’t been fully approved yet.
“Trump didn’t even have clearance to build that tower yet,” says study lead author Jennifer Whitson. “It was that incredible confidence. He didn’t have all his ducks in a row yet, but he acted – and it worked out for him.”
Liljenquist said that failure to consider constraints can carry weighty repercussions – such as the housing market crises and bank failures of 2008 that caused the worst economic recession since the 1920s.
“Although blindness to constraints may make the powerful more willing to pursue their goals, their willingness to leap before they look may also sow the seeds of their own fall and the fall of those who depend on them,” she said. “Power often perpetuates itself and can lead to great things, but when powerful people are blind-sided by unexpected challenges, they may crash and burn.”
The 1986 Challenger Space Shuttle disaster is a classic example of how power can be blinding. On that fateful day, powerful individuals doggedly pursued launch while ignoring the low-power employees who tried to be a voice of warning about the possibility of mechanical failures.
The study was led by Whitson, an assistant professor of business at the University of Texas at Austin’s McCombs School of Business. Other contributing researchers are from Columbia University, New York University, Stanford University and the University of Colorado-Boulder.
Liljenquist’s business research, which includes this study on how people are unconsciously more fair and generous when they are in clean-smelling environments, has been featured multiple times by Time and other national outlets.