Is ignorance really bliss?

Is “I didn’t know about it.” really a credible defence? The case leading to the resignation of Bob Diamond, following the LIBOR rate fixing, has once again raised this difficult question. Well, as with many leadership quandaries, it’s not a simple Yes or No.

The premise that a leader of a major organisation, unit or even function is responsible for knowing everything that goes on within in it, is simply ridiculous. Size, volumes and complexity all prevent this! However, as a leader I would expect that the key issues that might cause major loss (legal, financial or reputational) definitely would come across my desk.

Hence, the real questions I would ask Mr Diamond would be, “Why wasn’t he told? ‘Why did his managers not escalate this information up to a senior level, especially as it was so important, so damaging and very probably against the law?

That second question is tightly bound to your culture and values, which IS your responsibility and something you can be (and should be) influencing. The values that you espouse should clearly define what is important and hence what needs senior management attention.

In the Barclays case, we have to ask, ‘Why didn’t they say anything?’. Were failures seen as weakness, so the issues were not made transparent? Why didn’t the issues make it past the supervisor level?

In a power driven environment, it’s natural to want to be seen to be strong and be ‘dealing with it’. Was failure so feared that people behaved in such an irrational and damaging way? Only those involved will know.

So, how do we use this episode to improve our own performance? Well, when you reflect on your own position, you should ask yourself, ‘What kind of organisation do I want?’ One run on power and fear where people cover over the cracks, or one where errors are highlighted, mistakes are learned from and behaviour clearly outside of the acceptable boundaries, has an unambiguous consequence (e.g. Dismissal, fines and criminal charges).

So the next time one of your team encounters an issue that might be questionable, dangerous or illegal, are they clear what they should do and are you clear whether it would reach you?

For myself, I would want to know. Especially, if it was similar to the issues that we have seen in recent days. How about you?

Finally, Mr Diamond? What would you do differently, if you could do it all again?

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