The Dangers of Leaders Who Don't Know What They Don't Know

The expression "they don't know what they don't know" reflects the challenge of unawareness and overconfidence in leadership. Managers unaware of their limitations risk making ineffective decisions, leading to financial loss and declining morale. When organisations can shift to an enlightened management approach, they engender continuous learning, critical thinking, and ethical decision-making. Ultimately creating resilient and just organisations.

There is an expression I often hear, usually when referring to a colleague who is rampaging through meetings like the proverbial HiPPO: "they don't know what they don't know".

On the face of it, this will seem an odd phrase to some — how can a person not exhibit this failing and know what they don't know? Surely by definition if you do not know something then it is impossible to know you do not know it? But this is to take a very literal approach to the concept of knowledge and commit a category error.

In senior management circles, the problem moves beyond an intellectual exercise as it significantly increases the risk profile of an organisation when leaders don't know what they don't know. But how to combat this deficiency?

The Competence Illusion

I have mused before on the The Perils of Overconfidence and Benefits of Rational Thinking and will not rehash that here, but it is worth revisiting the concept popularised by Donald Rumsfeld of 'unknown unknowns':

Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be the difficult ones.

Donald Rumsfeld

The more classically inclined will already be familiar with this from the Socratic notion that wisdom resides in knowing that one knows nothing. A mindset which draws the clear line between a person who acknowledges the limits of human knowledge and someone who is simply ignorant. This acceptance and acknowledgment of our limits is the cornerstone of intellectual humility — a vital trait for effective leadership.

Managers who are unaware of their own ignorance are primed to suffer from the competence illusion and overestimate what they do know, overemphasise the value of the capabilities they do have, and make decisions based on known knowns rather than acknowledging the limits of their understanding and deferring to experts.

To combat this, and avoid having to face the harsh reality of personal limitations, pseudo-humility increasingly abounds with anyone seeking to demonstrate they are authentic at work and listens to their employees. A phenomenon which usually takes the shape of: "of course I'm not the subject matter expert on this". Only for the individual to then push through their thinking on the subject despite the protestations of experts in the room.

Such overconfidence can be catastrophic in a corporate setting, leading not only to the obvious financial losses, but to declining employee morale, and waste of that most precious resource — time. The ripples from this behaviour can, despite the sheer momentum of large enterprises, cause the collapse of an organisation, financial ruin of shareholders, damage to the wider community, and in more extreme examples weaken the global economy. An essential element in combatting this status quo is enlightened management.

Enlightened Management

Managers, even junior ones, hold positions of authority and responsibility; their decisions impact the lives of staff and shape the future of the organisations they serve. When managers operate without appreciation of their limitations, they increase the risk profile of the organisation by making ineffective and often harmful decisions. This is a form of negligence, which in company officers or board members is arguably a breach of the Corps Act because they have failed to act with care and diligence (s.180) — let alone acted in good faith (s.181).

Returning to the Socratic model and we have a readymade solution to counteract the dangers of uninformed management by fostering a culture of continuous learning, critical thinking, and self-awareness. This not only helps individuals counteract the entropy of ignorance, but by creating an environment which promotes questioning it, also reduces the damaged caused by the more authoritarian types common in management circles. Personalities for whom admission of ignorance is a weakness to be exploited for political benefit.

Perhaps most challenging in a Socratic model for management is that it requires organisational culture shifts to one which demands managers engage in reflective practices, remain open to feedback, and seek diverse perspectives. A process that can help managers better navigate the challenges of their roles, making better informed and more ethical decisions for the organisation.

Ethical decision making may seem at one with the zeitgeist of today's corporate culture, but is less practiced and more challenging than at first it seems. This is because diverse perspectives are not about hearing from people who are different to us but hold similar opinions. Rather, diverse perspectives are about hearing from people who may be fundamentally opposed to our world view. Something that is particularly challenging in organisations where belief has tripped over into ideology.

Ideology is seen as synonymous with belief, or as some kind of subset, but is in fact an evil twin. A belief system seeks to sample across 'reality' and filter for hits or confirmations. An ideology by contrast seeks error, rather than confirmation, and then takes the additional step of attempting to destroy what has been filtered out as 'part of the problem'.

Returning to the ancients for a moment and the notion of eudaimonia (εὐδαιμονία) hoves into view — which loosely means happiness, welfare, or the good life. But it was not happiness in the modern sense of simply feeling good — particularly if feeling good involves unlimited choice and unrestricted personal freedom. That kind of 'happiness' is not at all what philosophers such as Aristotle had in mind when thinking about eudaimonia.

Happiness in classical philosophy is associated with aretē (ἀρετή — 'virtue' or 'excellence') and phronesis (φρόνησις — 'practical or ethical wisdom'). Ethics in this context is quite distinct from morality, encompasing quantitive and qualitative elements. For example, speed in a horse or strength in a bull are considered 'virtues'. In this context activities can have their own set of virtues and our efforts when undertaking those activities can be judged. In an organisational context, measured against a SMART goal.

In management, this classical approach to business ethics reframes 'good' management from being subjective — "I am the expert" — to being objective:

Does someone manifest qualities that promote the application of knowledge?
Does someone exhibit intellectual humility?
Is someone open-minded, willing to revise their beliefs considering new evidence, and do they have a growth mindset.

Linda Zagzebski codified this approach in her work on virtue epistemology and concluded that virtue is the:

deep and enduring acquired excellence of a person, involving a characteristic motivation to produce a certain desired end and reliable success in bringing about that end.

In other words, virtue is not 'innate', and thus fixed, but the result of disposition plus ability. When managers embody a virtuous approach to their work in an organisation, they are more likely to recognise their own ignorance, take steps to address it, and in consequence have awareness of what they don't know.

As their practise of management ripples through their team, it can foster an organisational culture of collective intelligence — the true value and purpose of organising people into workgroups in the first place. When this is combined with discretionary boundary spanning (informal leadership), people at all levels feel empowered and enabled to more effectively share their insights. This collective wisdom can mitigate risks and enable the organisation to be more adaptable.

The journey toward enlightened management is a continuous one and requires a commitment to self-awareness, lifelong learning, and the ethical application of knowledge. By not only recognising the limits of our understanding but striving to expand those limits, we can create more effective, resilient, and just organisations. In doing so, we honour the timeless wisdom that true knowledge begins with the recognition of our own ignorance and in doing so begin to know what we don't know.

Good night, and good luck.