Imagine working for a hedge fund with a base of just $4 billion that's $100 billion in debt and leveraged to the tune of $1.25 trillion in derivatives. Imagine that the fund's managers, however, share a dogmatic faith that a single mathematical equation has made investing virtually risk-free, even as the fund's assets-to-liquid capital ratio reaches 30 to one. Then, imagine them being gobsmacked when the whole scheme crashes. Your bosses would have to be either boobs or idiots, right?
In fact, this scenario describes the late, lamented Long-Term Capital Management, a firm with a brilliant founder and two Nobel laureates on its board. When it finally collapsed in 1998, it sent shockwaves through the world's markets. And though LTCM represents an extreme example of bright people making dumb decisions, the phenomenon is a common one: Sometimes stupidity looks an awful lot like genius.
"It happens all the time. I call it self-destructive intelligence syndrome," says Mortimer Feinberg, industrial psychologist and coauthor of Why Smart People Do Dumb Things. "The brightest people don't see the gaps in their own knowledge, and that in itself is a pervasive form of dumbness just as dangerous as all the others -- or even more so."
Indeed, stupidity comes in a variety of guises and lurks in every chamber of the business world, from the smallest cubicle to the plushest corner office. When you find it, hold your tongue at your own risk. "Talk to people and take some action," says Harvey Hornstein, author of Brutal Bosses and Their Prey. "If you're working with -- or for -- idiots, your stress levels will go through the roof, as they bring the company down and lose you your job." Still, for the most part, we suffer in silence. According to Professor Elizabeth Morrison, chair of the Management and Organizational Behavior Department at NYU's Stern School of Business, 37.5 percent of the employees she recently studied admitted to remaining silent in the face of perceived incompetence. "People just feel helpless," she says.
Knowing what to do is tricky: Taming a boor requires a different approach than dealing with an airhead. So we talked to experts about how you can recognize and deflect different types of stupidity. Strap in.
1. The ShortSighted
Unlike LTCM's can't-see-the-trees-for-the-forest boneheadedness, An Wang -- Harvard Ph.D., computer pioneer, founder of Wang Labs -- represents the far more common business sin of not seeing the forest for the trees. Wang built a business on his technological acumen. In 1986, though, assuming leadership was easy as long as the hardware was right, he unaccountably went against his board and named his son as his successor. By 1992, the company was bankrupt. The moral is not that the son was incompetent (he wasn't). The point is, "Wang was a great example of people with extraordinary technical gifts who don't necessarily understand other aspects of business, which is common among intelligent, driven people who create companies," says Sydney Finkelstein, author of Why Smart Executives Fail and What You Can Learn from Their Mistakes. Maintaining a computer giant is as much about trendspotting, marketing, and branding as it is about technical brilliance. Wang lost sight of the big picture.
This type of leader "walks into a room where a business team has been meeting all day, listens casually to what the team says, and decides the solution in five minutes," says Finkelstein. "They think of themselves as master craftsmen and believe that everything else is extraneous." They micromanage but seem to have no grasp of context or real leadership. You have no choice but to defer to their expertise. Just remember, your job is not to be "right," but to be effective in the eyes of people who may never respect your skills. During meetings, try to find something useful in their abstruse, apparently pointless technical obsessions that you can tie to a bigger picture. Always frame your questions in terms of the company's interest, not your own: "How will this better position us against Brand X?" And the best way to gain advantage is to ask for advice and display curiosity about shortsighted leaders' fields of expertise, which these people will happily reward in bushels.
2. The ScatterBrained
Unfocused, forgetful, disorganized -- scatterbrained colleagues and bosses often get free passes because they're seen as "eccentric" and "creative." But work with one, and you'll soon realize that stupidity often reveals itself in a pile of incoherent memos, visionary schemes, and forgotten promises. The stories are legion -- as is the wreckage of the ruined businesses left behind.
"I worked for this one guy who was really energetic and founded this great company," says a former VP of business development at a now-defunct software firm. "But it quickly became clear that the whole organization was half-assed. He'd call meetings to schedule other meetings, then -- instead of showing up and leading them -- he'd be out taking flying lessons." Indeed, meetings are often the best place to diagnose and remedy business-wide dumbness. Are they organized? Does anything get accomplished? "Perhaps the most common complaint you hear from people is how poorly meetings are run," says William Torbert, a professor at Boston College's Carroll School of Management.
If you must deal with a supervisor prone to incoherence or inanity, refocus him gently by inquiring rather than accusing: "So, what do we need to accomplish here?" as opposed to "This is a waste of time." Remind him of deadlines subtly but often. Or turn his incompetence to your advantage: Offer to take responsibility for running meetings yourself, then alternate with other colleagues. If done in a supportive way ("We'd be happy to pick up the agenda this week if you're going to be tied up"), you'll be doing him a favor, establishing your own competence, and, most importantly, keeping projects on track and in the black.
Remember, though: A scatterbrain will "Yes" you to death, then do nothing -- or dispense promises not worth a damn. "With this one idiot I worked for, there was always a lot of, 'Do this and you'll get a promotion,' which, of course, never happened," says Danielle, a software program manager, who, like some other jittery sources, doesn't want her last name used in this article. The solution: If you're offered an official incentive, get it in writing. This isn't rude, it's just good business -- if you do it politely.
3. The Unqualified
"We studied a woman who worked at a software company," says Kathleen Lundin, coauthor of When Smart People Work for Dumb Bosses. "She was super bright, but got promoted into a management position too quickly and was in over her head. She was paralyzed with fear and subordinated herself to the people she should have been leading."
At other times, the unqualified boss or colleague will spew jargon like squid ink. "Be wary of anyone who always talks about 'synergy' or the need to be 'proactive,' then never delivers on anything," says one senior manager. "You can recognize unqualified executives because they have a way of making their problems your problems."
With little or no grasp of their own jobs -- or anyone else's -- terminally unprepared bunglers often dump impractical assignments in your lap. The key to dealing with these people? "Always put it back on them," advises the senior manager. "Say: 'If we're going to do this, then you'll have to do X, Y, and Z.'" In extreme cases, if a peer or supervisor's incompetence threatens the company -- and your job -- you may have to go over his head. Ideally, go diagonally, to a colleague of this person's immediate supervisor. Present your complaints in terms of the organization's best interest, not your own personal peeves. Also, offer solutions: "Morale is low, two people on the team have left, and here's what needs to be accomplished."
4. The Boorish
The boor covers up incompetence with bluster and vanity -- then leads an organization down the toilet under the pretense of "tough love." "I credit him with taking down our company," a former marketing director says of a supervisor. "He just degraded the morale of the staff, and, inevitably, the company was sold. By then, most of us were in therapy."
Boors are often narcissists. "At meetings," she says, "he used to go around the table, asking, 'Isn't this the best work you've ever seen?' And it was his own."
And they're often just rude. "The guy told me I was paranoid because I was Jewish," says Danielle of her boss. Whatever his offense, keep in mind: If you're a subordinate, don't respond in the heat of the moment. Focus on the content of his outbursts, not their form. If he's angry about how a report was written, go to him and say, "What can I do about this in the future?" Also, look for time clues. Explains Hornstein, "It's strange but true: These people are often triggered at specific times. It may be mornings, it may be after meetings, it may be early afternoons. Keep track and try to avoid them then."
5. The Just Plain Dumb
Sometimes, stupidity disguises itself. At other times, it announces its existence with a bugle. "At this major business-to-business publisher where I worked," says Anne, a former marketing director, "they hired some guy out of retirement to run web development, and he didn't know how to use an Internet browser."
Or take the lament of a project writer who worked on a team that overhauled the technology at a museum: "Deadlines slipped by, millions of dollars were evaporating, and the guy running the thing had no organizational skills," he says. "A senior executive came to a meeting to check out our progress, and -- even after her face went ashen -- our inept supervisor was saying, 'Hey, let's get some lasers -- that would be cool!'"
If a boss or colleague is clearly in over his head and doesn't realize it, try to move in and take over some duties. The payoff is you'll gain lots of experience for your next job. But make sure you get the credit: When working on a project, e-mail a draft in progress to some colleagues and superiors for feedback, just so they know who's doing all the work.
When gauging idiocy, be sure you're not confusing stupidity with a personality clash or different ways of communicating. Determine whether the problem is with one boss or the entire organization. And try to give your boss the benefit of the doubt. "People have these fantasies that their manager or CEO should know as much about their jobs as they do, or more," says Ronna Lichtenberg, author of It's Not Business, It's Personal: The 9 Relationship Principles That Power Your Career. "Realize it's the other way around. You're there to take care of him and he's really a client of yours. A lot of people don't even know what their supervisors are paid to do." On the other hand, if the culture of a company seems innately stupid or irrational, you need to look at other options. "I thought my boss was just really passionate, then a little erratic," says one former VP. "It turned out he had a major coke habit. When you see that going on, you've got to get out." After all, sometimes the best response to stupidity on the job is a stack of updated resumes, sent out ASAP.
