The Price of Arrogance: Why Ignoring Stupidity is Costly

Came across an article titled "Don't Underestimate Stupid" by Scott Galloway , Professor of Marketing 美国纽约大学 - 斯特恩商学院 and thought of writing my own version. Here goes:

Stupidity is like a ninja - it can sneak up on you when you least expect it, and before you know it, you're lying on the ground wondering how you got there. In the professional world, underestimating stupidity can be incredibly costly, and yet it's all too easy to do. Whether it's big stupid decisions, rich stupid behaviour, or plain old self-destructive choices, stupidity can strike at any time, often with hilarious consequences.

Stupidity is often dismissed as harmless or even comical. From ill-advised business decisions to toxic workplace culture, underestimating stupidity can lead to a host of problems that can ultimately hurt an organization's bottom line.

Professor Carlo Cipolla's Basic Laws of Human Stupidity are a useful framework for understanding the many ways that stupidity can manifest itself in the professional world. He breaks it down like this:

1. Everyone underestimates the number of stupid individuals among us. This is because stupid people often disguise themselves as normal, intelligent individuals, making it difficult to identify them.
2. The probability that a certain person is stupid is independent of any other characteristic of that person. The probability of a stupid person causing harm to others is directly proportional to their level of power. This means that the higher someone's position of authority, the more damage they can potentially cause if they make a stupid decision.
3. A stupid person is a person who causes losses to another person while deriving no gain and even possibly incurring losses.
4. Non-stupid people always underestimate the damaging power of stupid individuals and overestimate the power of intelligent individuals. This can lead to complacency and a false sense of security.
5. A stupid person is the most dangerous type of person. there is no way to protect oneself from the harmful effects of stupidity. Even the most intelligent and capable individuals can be brought down by the actions of a stupid person.

With these basic laws in mind, let's take a closer look at some of the different types of stupidity that can be found in the professional world:

Big stupid: Big stupid decisions are those that are so obviously foolish that they defy logic. Examples of this type of stupidity:

• A company making a major investment in a product or service that is clearly outdated or irrelevant
• A CEO publicly making insensitive or offensive comments that alienate customers or employees
• A government enacting a policy that is widely opposed by the public and has no chance of success

Like, in 2011, Netflix tried to spin off its DVD rental business into a separate company called Qwikster, only to reverse the decision a few weeks later due to intense backlash from customers and investors. The move cost the company billions of dollars in lost market value and damaged its reputation as a tech innovator.

Rich stupid: This type of stupidity refers to the tendency of wealthy individuals or organizations to make boneheaded decisions despite having access to vast resources and expertise. For example:

• A billionaire investing heavily in a startup that has no clear path to profitability. Hello, Elon Musk? !!!
• A company spending millions of dollars on a marketing campaign that fails to resonate with consumers
• A government agency wasting taxpayer dollars on a project that is later revealed to be a complete boondoggle

A famous instance of this is the Enron scandal of the early 2000s, where the energy company engaged in widespread accounting fraud to inflate its stock price, despite having some of the most highly-paid executives in the world. The scandal ultimately led to the company's bankruptcy and criminal convictions for several of its top leaders.

Self Stupid: Finally, self stupid refers to the ways in which individuals can make decisions that harm themselves in the long run. Like:

• An employee refusing to take advantage of training opportunities that could help them advance in their career
• A manager failing to delegate tasks effectively, leading to burnout and stress
• A freelancer consistently undercharging for their services, leading to financial instability and frustration

One common form of self-stupid behaviour is procrastination. We've all been guilty of putting off important tasks until the last minute, even when we know that it's not in our best interest. Whether it's a student cramming for an exam or a professional waiting until the day before a deadline to start a project, procrastination can lead to poor performance and unnecessary stress. Lack of self-care is also form of self-stupid behaviour. This might include things like failing to get enough sleep, neglecting to exercise or eat healthily, or not taking time for relaxation and leisure. While it can be tempting to push ourselves to the limit in pursuit of our goals, neglecting our physical and mental well-being can ultimately hurt us in the long run. In real life we can have several times when known famous people did self-stupid:

In 2017, Elon Musk, tweeted that he had secured funding to take Tesla private at $420 per share (we know why he likes that number and it was a joke). This tweet caused Tesla's stock price to surge, but it soon became clear that Musk had not actually secured funding for the deal. As a result, the U.S. Securities and Exchange Commission (SEC) launched an investigation into Musk's tweets and ultimately fined him $20 million for securities fraud.

Musk's behavior in this case could be seen as a form of self-stupid behavior. By tweeting impulsively without first securing funding, Musk put both himself and his companies in a difficult position. Not only did the SEC investigation cause a great deal of negative publicity, but it also led to legal and financial consequences for Musk and Tesla . This incident serves as a reminder that even the most successful and intelligent people can fall prey to self-stupid behavior if they're not careful.

Of course, there are many other kinds of stupid as well. There's short-term thinking, which can lead to decisions that might benefit a company or individual in the short-term, but have negative consequences in the long-term. There's also groupthink, where people become so convinced that they're right that they stop listening to dissenting voices. And there's overconfidence, where people become so sure of their abilities that they don't take the time to consider other viewpoints.

So, why is it important to recognize and acknowledge the various kinds of stupid that exist? Well, for starters, it can help us avoid making these same mistakes ourselves. By understanding the pitfalls of financial illiteracy, desperation, arrogance, and other forms of stupidity, we can make better decisions and avoid costly mistakes. But it's also important to recognize that even the smartest and most successful people are not immune to making stupid decisions. We're all human, after all.

So, Don't underestimate stupid. It's a force that can strike anyone, regardless of their intelligence or success. By recognizing the various forms of stupidity that exist, we can take steps to avoid making these same mistakes ourselves. And who knows, maybe by doing so, we can help make the business world just a little bit less – well....Stupid!

Closer home in India, we've had:

Vijay Mallya, the former billionaire and CEO of Kingfisher Airlines, was found guilty of contempt of court by the Supreme Court of India. Mallya had fled India in 2016 to avoid prosecution for alleged financial crimes related to Kingfisher Airlines, which had defaulted on loans worth over Rs. 9,000 crore ($1.2 billion) from various banks.

Despite being ordered by the court to return to India and face trial, Mallya has remained in the United Kingdom and even fought extradition attempts by the Indian government. Mallya's behavior in this case could be seen as a form of self-stupid. By fleeing India and fighting extradition, he not only faced legal consequences but also damaged his reputation and credibility as a businessman. Mallya's lavish lifestyle and flashy persona had earned him the nickname "King of Good Times," but his fall from grace was swift and dramatic. This incident serves as a cautionary tale for professionals in India and beyond, highlighting the importance of ethical and responsible behaviour in the business world.

Understanding the different types of stupidity that can be found in the professional world is essential for mitigating their harmful effects. By recognizing the basic laws of human stupidity and taking steps to address them, organizations can protect themselves from needless mistakes and ensure long-term success.

So there you have it - the many forms of stupidity that can be found in the professional world. Whether it's a CEO who can't stop putting their foot in their mouth or a government agency that can't seem to spend taxpayer dollars wisely, stupidity is always lurking just around the corner. But fear not - armed with the basic laws of human stupidity and a healthy sense of humour, you too can navigate the treacherous waters of the business world and emerge victorious. And if all else fails, just remember the wise words of Forrest Gump: "Stupid is as stupid does."

Amit ?is a 25-year+ Entrepreneur turned Consultant. He is currently the Director, Practice Growth at?Factoryal , a Boutique Management consultancy helping entrepreneurs in their growth journeys…

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