Smart Businesses, Stupid Decisions

Ed Fowkes
Jul 10
5 min read

Why Do Smart Businesses Keep Making Stupid Decisions?

Every few months a story emerges that leaves the business world scratching its head.

We find ourselves asking “How could such an experienced leadership team possibly have approved that?”

The latest example comes from Starbucks.

A marketing campaign in South Korea rapidly descended into controversy after imagery and messaging echoed painful episodes from the country's modern history. Whether the campaign resulted from poor judgement, inadequate oversight or something else entirely is almost beside the point here. What really matters is that a global organisation, employing thousands of talented people and investing heavily in research, marketing and brand management, still found itself making headlines for completely the wrong reasons.

In cases like this, the immediate reaction is almost always the same.

"What were they thinking?"

It's an understandable question, but I suspect it misses a more interesting one.

Large businesses rarely make bad decisions because they employ unintelligent people. More often, they make bad decisions because intelligent people are operating within systems that prevent them from seeing what should have been obvious.

That isn't simply a corporate problem.

It's a founder problem.

It's a leadership problem.

And, if we're honest, it's a very human problem.

The Hidden Architecture

Every business develops an internal picture of reality.

Who its customers are.
What they value.
Why they buy.
How competitors behave.

And this leads to a culture of what success looks like for the business and each employee within.

At first, the ideas themselves are often tentative. They are tested constantly because the business has little choice. A young company survives by learning quickly. Then success brings a different tempo.

As organisations grow, assumptions become embedded in strategy documents, marketing plans, reporting structures and company culture. The very systems that once accelerated learning begin to reinforce certainty instead. Almost the opposite of what the founders needed to strive for at the start. Meetings can become exercises in confirming existing beliefs rather than challenging them.

And this, is how intelligent organisations become context blind.

Each department performs its role competently. Marketing trusts the research. Research trusts historical data. Leadership trusts established processes.

Nobody is deliberately negligent. Everyone is making reasonable decisions based on the information immediately in front of them. Yet somewhere between the customer and the boardroom, reality has shifted.

Perhaps the most dangerous feature of these systems is that they become self-reinforcing.

First, the organisation simply doesn't notice. Then, when everybody shares similar assumptions, dissent starts to feel increasingly uncomfortable. Alternative interpretations are therefore quietly dismissed because they don't fit the existing narrative. The result is not a lack of intelligence. But it is a lack of perspective.

The Real Problem

When businesses fail publicly, we often focus on the decision itself.

The campaign.
The acquisition.
The pricing.
The product launch.

It makes for a great news piece about some conspiracy. Yet these incidentals are usually a symptom of life rather than causes. The real problem began much earlier.

It all begins when curiosity gives way to confidence. Confidence hardens into certainty. And certainty, in turn, gradually replaces observation.

This is why so many business failures seem obvious only in hindsight. Once the outcome is visible, everyone claims they would have seen it coming. In reality, they probably wouldn't. Given the same assumptions and the same information, many of us might well have reached exactly the same conclusion.

As founders, we are particularly vulnerable to this trap. The very instincts that help build a business, like conviction, persistence and belief, can later become liabilities. Success encourages us to trust our judgement and over time, we stop testing it.

I see this repeatedly, not only in global corporations but in owner-managed businesses. A company continues serving customers who no longer exist. It measures performance using numbers that no longer matter (I’ve been guilty of that one). It launches products because they fit the founder's worldview rather than the market's (and that one too).

None of these decisions appear irrational. I don’t even think they often are. And they're perfectly rational within an outdated understanding of reality. And that's why I believe poor judgement is rarely the true cause of business failure. Context blindness is the culprit.

The Season

One of the principles behind our GamePlan framework is that Businesses should not operate at full speed all year round. Nature doesn't. Neither do elite athletes.

Farmers don't harvest every month, and sailors don't leave harbour without first reading the weather. Yet many businesses try to remain permanently in execution mode, believing that constant activity is the same as constant progress.

It isn't.

We guide founders through the seasons in GamePlan.

Summer is where the business sells, executes and gathers live evidence.

Autumn is where that evidence is sorted, understood and turned into better judgement. The season of observation.

The time to ask whether reality still matches the assumptions on which the business is operating.

Are customers behaving as we expected?
Which ideas generated evidence rather than optimism?
What surprised us?
Where have we become certain of our assumptions?

These questions sound deceptively simple, but they are often the difference between adaptation and decline. They create space for evidence to replace opinion before expensive mistakes become embedded in strategy.

A business that skips Autumn enters Winter with old assumptions dressed up as strategy, and plans for last year, or even longer ago.

Reflection is frequently misunderstood as slowing down. In reality, it is the discipline that prevents momentum from carrying us confidently in the wrong direction. Businesses don't need more activity. They need better feedback.

The Starbucks story will eventually disappear from the headlines, just as countless similar stories have before it. Another organisation will make another inexplicable decision, and once again people will ask, "What were they thinking?"

Perhaps the better question is “What had they stopped seeing?”

It's a question worth asking of every business, including our own.

Intelligent people rarely wake up one morning and choose to make foolish decisions. They simply continue acting on assumptions that were once true, but ceased to be without making a noise about it. The businesses that thrive over the long term are not those that avoid mistakes altogether, but the ones that deliberately create moments to step outside their own thinking, to challenge what they believe to be true, and to allow reality, not habit, to shape what comes next.