Why Smart People Make Dumb Decisions? | Prasad Kaipa

Alan Olsen: And what inspired you to write this book?

Prasad Kaipa: The key message was somewhere I had a chance to work with a large number of extraordinarily smart people. I had a chance to work with brilliant engineers, technologists, Nobel laureates and some of them and in that process I found we make some very brilliant, smart decisions and also we make some pretty dumb decisions- pretty wise decisions. I kept looking at what are the conditions under which smart people make wise decisions and so for a period of 10,15, 20 years I observed and I saw some patterns and that’s what led me to write this book.

Alan Olsen: So question now is, why do smart people make dumb decisions?

Prasad Kaipa: You know like as we talk about Mark Zuckerberg is, he’s in the Congress right now giving some testimonials, I think yesterday he worked with Congress and today he’s with the Senate I think. Why do, whether it is Facebook or you can talk about Uber for example. The Uber CEO and the kind of behavior he had and what happened to Uber because of the kind of conversations that he had with the drivers and other people when they showed up on YouTube. So my sense is whether you are a CEO of United who take away a paying passenger, dragged from the plane or Uber or Facebook, I think the key part is to recognize we are smart or we are dumb or we are wise based on how sensitive we are to the context. If I am actually paying attention to you, paying attention to what’s going on paying attention to Aaron, paying attention to what’s going on inside of me, then that sensitivity of connecting to what’s going on outside and inside allows me to tap into the intelligence that I have, but the moment I am on autopilot when I am on, like lights are on but nobody home,I think we make a lot of dumb decisions because we come from the arrogance that I am already there, or I am smart or I’m capable. I think that’s one of the reasons why a lot of smart people make pretty dumb decisions, because they are blind and deaf and dumb thinking that they are at the top and nobody is watching, nobody’s listening.

Alan Olsen: Why is that? In other words, what get’s in the way of doing things right?

Prasad Kaipa: I suppose we get used to doing things in a particular way, we keep following a certain process and we gain competence because of that process. We become extraordinarily good at certain things like you know somebody was mentioning that one week Mark Zuckerberg had gotten coaching in addressing and talking to the congressional panel. Because of that, over a period of time he gained a certain amount of confidence and he gained a certain amount of ability to respond to questions that make him very uncomfortable. The key is to recognize, they make you confident but if you think you got it and you become overconfident, that strength that you developed through conscious practice can also backfire. So the signature strength that you develop can also become you know what we call core incompetence, that’s when we become situationally blind, we think that we got it, we mastered it, I am you know the king of the universe kind of a feeling that comes in, that’s when we fall. I think that’s when we make the biggest set of mistakes because we are no longer seeing what’s going on, we are in our head.

Alan Olsen: How does how does a person go about making the change that they need to make in order to get to the next level?

Prasad Kaipa: I think during the break you mentioned about accountability and responsibility, somewhere when I begin to think I am accountable to something larger than myself. It could be a corporation that I lead or it could be the family that I live with or it could be the community and society that I am accountable for. Somewhere I need to begin to think that I have responsibility, I am a servant of something larger than me. You know in spiritual domain of course that came into leadership language, it’s called servant leadership. When I begin to deal with you as if I am servant of you, then my humility my openness my alertness and attention will make me do better decisions then I would normally do so chances of making dumb decisions or very low when I’m humble, when I’m open when I’m aware, but when I am not feeling that I am accountable, I am on the top of the world, I am better than anybody else, that arrogance, I think that what you might call a certain way in which I feel I am better than anybody for that matter, I think that is the danger point where we make a lot of mistakes.

Alan Olsen: Interesting comments, I had in the past, Ken Blanchard who has authored a book, The One Minute Manager, 17 million books in circulation and when he gave me his business card, his business card- Ken has just nobly five million followers on his Twitter account, so his business card says Chief Spiritual Leader and it was it was that same concept you just outlined about servant leadership, it becomes so important in between inspiring and building those around you versus saying do what I asked you to do. So this book that you wrote, From Smart to Wise, what inspired you to do that?

Prasad Kaipa: There were two things which inspired me because I had a chance to work with a large number of senior executives, c-suite executives, from companies like Boeing to Microsoft or Apple to Disney to a large number of companies I have worked with in addition to entrepreneurial companies, where startup companies CEOs are looking at building you know big companies. Over a period of time I began to see that there is something about wisdom that allows companies to prosper and the leaders to prosper and build innovative and empowering cultures in their startup companies as well as big companies. When they lose that wisdom, when they lose their smartness for their own self-interest, when they lose their wisdom for their own personal benefit, then I found it becomes a lot harder. So in the process of writing it, I realized I’m very good at doing certain things but I’m not necessarily great in doing certain other things and over a period of time I found out there is a gentleman, Navi Radjou, whom I first started mentoring and coaching him but over a period of six months to one year I found out he is extraordinarily well-developed in his writing so we began to write blogs in Harvard Business Review and then I requested him to co-write the book with me and interestingly he helped me to write the book, From Smart to Wise, and if it is any good because he and I worked hand in hand. He brought out the best in me and I helped him to learn that and together we were able to create it.

Alan Olsen: Prasad in the last segments we talked about smart people making dumb decisions and how you implement change in your life to move to the next level, but I want to focus this segment on that life is progression- is all about progression. Just like you climb a ladder or a stairway and in order to get to the next step we can’t just magically say, we want to go up the next step, it’s a process. So when you’re coaching someone and when you’re saying, where are you today and where do you want to be? How do you walk them through the process of change?

Prasad Kaipa: One of the first things I find is, are they really committed to growth because several times young people say, I want that, I want to be a CEO of this large company or I want my startup to be very successful, but when you start talking to them about the kind of sacrifices they need to do, kind of commitment and kind of hard work they need to put in to get there and the patience they need to be able to get there, they’re not ready so first and foremost step is to create a structure that allows them to recognize I want to climb the Everest. That means I need to start walking every day, maybe 5,000 steps, maybe 10,000 steps and then start you know hiking to nearby thousand feet mountains or helix or something else. So like that first step is to create a way in which they are in the process of development themselves on a daily basis. First I need to get that commitment from them that they are going to do every day as if they are on autopilot certain sets of processes and follow certain principles on a daily basis so that sometime three years, five years, ten years down the line, they’ll be able to reach their goal. Some people are open to that, some people say, wait a minute, no I just want to do what is most sexy, exciting, what is more interesting, I don’t want to do the wrote stuff, I don’t want to do the daily discipline. That’s when I know those people are not ready to be coached, they may become very successful, but they are not going to sustain that success over a period of time unless they have a set of self-discipline and a certain set of principles and values that they need to operate on a daily basis.

Alan Olsen: Maslow, who is a famous psychiatrist wrote the hierarchy of needs which he talked about progressive state, saying the highest one is, self-actualization. And when an individual is talking about trying to get to do their best, ultimately if they understand it well, it has to do with how others respond when they’re around that that person, so in the business world, you often look at small companies going from little to big, but in order to do that, it requires the founders to really let go, how do you transition and let processes take over?

Prasad Kaipa: One of the first things they need to do it is, when they are working with their co-founders, sometimes based on the way in which they created relationships with the co-founders, how they share the stock, how they give titles, how they take on different positions, board positions are the chief executive roles when they take on, that tells me a little bit about how they feel about equality, how they are able to empower their co-founders and the early employees. Once I know they are able to empower other people who are early into their startup and they are able to treat them well, they are able to motivate them and bring out their innovation for the benefit of the startup, then I know they’re in the process of doing what is best for the company, not what is good for their own ego, that’s a first step I find. Next step would be how do they hire? Do they hire people who look like them, who think like them, who feel like them, or are they willing to hire people who are completely diverse, who are smarter than them. If they are comfortable in hiring the best people and learning how to manage people who are smarter and better than you, I think that is something that will challenge their ego but that will also allow them to let go of the kind of sense that they have. Similarly, as the company grows from each stage, like you know Series 1, Series EF funding to Series B in mezzanine, whatever they are going through, they have to let go, they have to take off more of the hats that they are wearing and give it to people who are better than them, who are smarter than them and let them guide the founders. So each step of an entrepreneurial startup, if it has to become successful the founders have to let go, one step after another. The key is to recognize, letting go is not giving up, letting go is just for the heck of it, putting it aside and then allowing it to grow by itself without my contribution, my ego. If I can do that, then chances are I will not only grow the company to become a big successful company, I will also grow myself to be a better leader and I can be a servant leader if I can learn to let go much better.

Alan Olsen: I love the way you put that and acknowledging this servant leader concept because it speaks for itself that you know I am here to serve not to control. Prasad, for the listeners here, your background is a Ph.D. in physics, and you moved over to coaching, it’s interesting that transition. I’m going ask the question why, what inspired you to move this other direction.

Prasad Kaipa: When I was working in physics at the University of Utah as a faculty, what I found is somewhere along the path, I’m happy in what I’m doing, but I felt I am a lot more than being a physicist, and my self-awareness, my communication, who I am was not as much in what I do. So the being and doing, there was a gap. And when I was going through some leadership program, it became clear to me that I am actually a people person, not just a technology or a scientist in that respect, I wanted to tap into using who I am as a way of contributing to other people. So somewhere along the path I started looking at what do I do with all of who I am? I think that’s an important question young people have to ask, am I happy with the job, does that give me enough money to put on in a food on the table is one question, second is, am I joyful? Do I even engage myself and do I enjoy every day what I do at work? If the answer is no. Then maybe there is more of who you are can make a contribution to what you do. So figured out how do to explore what else can you do. That led me to connect with the computers so I ended up in Apple computer. And as I was an apple, I was being a tool maker, I was actually facilitating a lot more than what I was able to do as a physicist, but somewhere along the path I realized, developing people, whether it is through leadership programs, whether it is through coaching is where who I am, what I think, what I feel, there was an alignment and that alignment can be brought in through coaching leadership development, that’s how I transition. A twenty year journey, but I have absolutely no regrets and I’m actually everyday when I wake up, I’m grateful and I’m thankful to the god that I was able to make this transition and there was a lack of grace in my life that allowed me to become successful during and after the transition.

Alan Olsen: You know Prasad, I love the way that it in Smart to Wise you introduce spirituality within the workplace, a lot of people are afraid to do that. What’s been your experiences as you work with this.

Prasad Kaipa: When I started out in the 1990’s Alan, there was a difficulty in using the spirituality. I remember using the word, spiritual in Boeing in one of Alan Mulally’s staff meetings when he was building the 777 plane. There was literally a gasp in the room because they didn’t expect people to talk about spirituality. But later Alan was telling me that it actually opened up the whole room and it gave them the freedom they did not even know that they had. But now 20 years later, I’m finding spirituality is essentially the fuel makes companies to be successful and people to be successful. Because the changes are occurring so fast, and it is international, it is a global and the competition is so high, the diversity is so high, if we are not acknowledging the grace that we have in our life then I think we are stupid. Of course, now the business literature also talks about but purpose, purpose driven organizations can hire people like more easily and the millennials are excited about meaning and purpose and sustainability and some of these kinds of things, so my feeling is that the purpose, passion, meaning, connection, growth, servant leadership are all different ways in which spirituality shows up in the business, I think there are more and more business leaders are beginning to acknowledge that they’re not there because of their greatness alone, They are there because the context allowed them, they were in the right place at the right time. Some people call it luck, but most self aware people call it grace and spiritually and they feel grateful for that. I think that’s happening right now.

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This transcript was generated by software and may not accurately reflect exactly what was said.

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

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