Admissions of Ignorance
Executives face a lot of tough questions. But the best leaders will confess that they don't have all the answers.
By Jeffrey Pfeffer

(Business 2.0) – According to an old movie, love means never having to say you're sorry. Judging from the bluster that seems to be a prerequisite for executives in government and business today, being a leader means never having to say "I don't know."

Nowadays there's great pressure to come off like a know-it-all. Maybe that's due to the additional scrutiny that comes from living in our media-drenched, blog-happy age. Or maybe it's a result of increasing job insecurity: People think any display of doubt or weakness might cost them their jobs.

Either way, despite the many uncertainties in business, CEOs find themselves projecting quarterly earnings to the penny. Leaders in government often fall into the same trap. Donald Rumsfeld "knows" that he will find weapons of mass destruction in Iraq and how many people it will take to keep order after the invasion. Even managers facing more mundane challenges are encouraged to hide ignorance. One corporate vice president recently told me that, at her previous employer, she had had occasion to drive her boss to a meeting and had gotten lost on the way. When she apologized and admitted what had happened, the boss advised her never to tell anyone that she didn't know what she was doing--even about something as unimportant as finding a travel destination.

But this habit of projecting certainty in uncertain situations can be quite harmful to an organization. Most important, not admitting to yourself and others what you don't know usually precludes asking for help, advice, and relevant information. And when a CEO makes a pronouncement--even one that's largely based on hopes and guesses--employees will use whatever means necessary to make it come true. If earnings are supposed to be $1 a share, they will be, even if it takes some creative accounting. That's one reason Warren Buffett refuses to provide financial guidance at Berkshire Hathaway and why he has encouraged other companies on whose boards he sits, such as Coca-Cola, to give up the practice.

Of course, committing to unknown outcomes can sometimes have positive consequences. When President Kennedy set the goal of putting a man on the moon, people worked hard to make it happen and the country achieved prodigious advances in science and technology. That's what stretch goals are all about. But commitments that are not open to change can leave an organization operating in fantasyland. I once participated in a conference call in which the board of directors of a small software company decided to fire the CEO. A fellow board member remarked that the company's finances and business prospects were not looking good. My take was even more dire: that the CEO had convinced himself that his strategy was the only way to go. No matter what the strategy, that plan usually spells doom. If you become so attached to your course of action that proving it right becomes more important than your overall success, chances are you are not going to succeed. The "certainty" about weapons of mass destruction in Iraq led to unwavering commitment to a strategy that, in hindsight, was probably not the wisest course.

The solution is to put ignorance out there for all to see. Whether consciously or not, the most effective leaders adopt some version of so-called fact-based management--in which managers talk about what they don't know and ask for time and resources to figure it out. That's what good scientists do every day of their lives. One practitioner of the approach, Kent Thiry, CEO of kidney dialysis company DaVita, knows a lot about his business--which boasts $2.2 billion in annual sales and some of the industry's best clinical outcomes. But when I attended a meeting he led with about 400 employees, I heard Thiry answer "I don't know" when he didn't know certain regulatory, medical, and financial details. And he promised to follow up and get the answers.

Such behavior keeps an organization honest--and connected to reality. Of course, there will be times when you don't come off sounding omniscient when you answer questions like "How will you turn the company around?" with "Let's do some research." But if you insist on making things up as you go along simply to convey "leadership" or justify your choices, you might find that answers get even harder to come by as time goes on.