Larry BloomAfter 30+ years in the pool and spa industry, I retired and began working on a lifelong passion — understanding why otherwise-bright business people (including me) can make bad decisions when they should have known better. 

Nowhere is this problem more clearly observed than in our own industry. While the overall demand has dropped for new pools and spas, and some companies have gone out of business or suffered huge losses, others have experienced growth and success. What is the difference? 

One way to understand success is to study failure, so let’s start there. 

Over the years I have observed bad decisions and business failures in the pool and spa industry from my vantage point as an insider. It seems to me the reasons cited for failure or other significant business problems are frequently off point. If the owners really knew what they were doing wrong, they might have been able to fix the problem. Instead, owners tend to blame sudden problems from the bank, the government, competition, employees, family members or an idiot partner. 

But rarely have I found that a problem developed overnight. Rather, there were gradual negative changes that ultimately resulted in a catastrophic problem that could have been avoided. The two most-common contributors are a failure to anticipate or react to competition, technology, or other changes in the marketplace; and the leader’s attitude, ability to be objective, and willingness to bring in needed help and share power.

The telltale sign of these issues is when a leader exclaims, “What was I thinking when I made that decision?” Most of us have said or felt this at one time or another. The real problem stems from the fact that, just like computers can have bugs, all humans have bugs in the way we think and make decisions.

Rather than using complex psychological terms, I call these Mind-bugs — bugs in the critical internal processes that occur in the five inches between our ears. Mind-bugs can affect fact gathering, analysis, insights, judgments and decisions, and they increase business risk accordingly. And today’s stressful, time-constrained business environment reinforces the problem.  

As part of my five years of research, I screened over 125 recognized problems with thinking and decision-making and created a user-friendly list of the 20 most important business-oriented mind-bugs. You can get a free reference chart on my website that covers all 20, but here are six that most often impact pool dealers. 

1. Informed Leader Fallacy: A belief by a leader that he/she is better informed and has better instincts than others, simply because he/she is the leader.

We deeply want to be led by people who know what they’re doing and who don’t have to think about it too much. So by the time we achieve a leadership position ourselves, we are good at making others feel positive about our judgment, even if there’s no strong basis for that. 

But the amount of success it takes for leaders to become overconfident isn’t terribly large. Some achieve a reputation for successes when all they have done is take chances that happened to work out. The fierce personal confidence that characterizes many leaders serves as a breeding ground for this mind-bug. Most decision-makers will trust their own intuitions because they think they see the situation clearly. Accordingly, they can fall into a trap of believing they are better informed than they really are. 

2. Shooting the Critics: The tendency to marginalize people who disagree with us.

Leaders know that any decision they make is subject to second-guessing. And whether they’re fully aware of it or not, they’re really not in the market to have their decisions, beliefs and choices questioned. Whether we are supervisors or founders, we subconsciously develop the tendency to marginalize people who disagree with us. When this happens people stop telling the truth. They avoid rocking the boat and just quietly stay out of the line of fire. This mind-bug causes intolerance for challenge and acceptance of our beliefs as sufficient, leaving huge gaps in judgment.

3. Outcome Attachment: Being so attached to outcomes that serve our interest that we fail to look for problems in our thinking and decisions.

Subconsciously we are all attached to outcomes that serve our interests, helping us get what we want or what we believe others expect of us. When this mind-bug strikes, the attachment is so strong that we may be willing to manipulate numbers in order to hit quotas, or declare work completed when in fact it isn’t. It seriously affects how we gather information so that we search in a way that supports the outcome to which we are attached. It is a debilitating problem when it affects how we make decisions. Our feelings and emotional reactions tend to validate our thinking while we seek to justify our thoughts, feelings, desires and decisions. We are confident in the truth of our own belief system, however flawed.

4. Closed Mind: The inability to hold and examine two opposing views at the same time and to be closed to other perspectives than ours.

When we are afflicted with this mind-bug, we subconsciously shut down the very thing that can help us examine our own beliefs: evaluation of diverse opinions. In essence, things are the way I see them because that is the way I see them. As perpetrators, we are sometimes not aware of doing this. Other times we may even be proud of it. We make the self-serving assumption that we have figured out the way things are and anything that challenges our point of view becomes “unthinkable.”  

It is not that we shoot the critics or fail to listen. To the contrary, we may spend time demonstrating our listening skills to others to prove we are good listeners, but afflicted as we are, we just don’t hear them. We simply don’t allow ourselves to hold and mindfully examine two opposing views at the same time. We give lots of lip service to others, but true diversity of thought is shut down. Once infected, we feel pretty good until the day of reckoning, when we ask ourselves, “What was I thinking when I made that decision?”

5. Experience Bias: Believing that future events will occur in a specific way based on our prior experience, and not seeing conditions differ.

While it is logical to consider experience, this mind-bug afflicts us with the tendency to believe that events will occur in a specific way based on prior experiences. Our exclusive focus misses that human reasoning is accompanied by various subjective experiences, including our interpretation of our thoughts, feelings, desires and decisions. This has an effect on our recall and our ability to make objective comparisons. Once afflicted, our belief is so strong that we fail to look for contradictory evidence and impute hostile motives to even the most helpful folks who question the relevance of our experience.

6. Status Quo: Creating significant friction that works against new ideas.

Most decisions have a status quo alternative, defined as doing nothing or maintaining our current or previous decision. This mind-bug causes us to disproportionately stick with the status quo and creates significant friction that works against the momentum and traction of new ideas, thinking and options. New evidence that contradicts the status quo is cleverly rejected through the infection of other mind-bugs. Defense mechanisms are triggered and emotions can reach dysfunctional proportions. When the status quo mind-bug is deeply entrenched, companies are at significant risk of being displaced by new technology and novel business models. The business landscape is littered with the bankruptcy remains of those companies.

By sharing some of my research findings, I hope to help people at all levels in the pool and spa marketplace make better decisions, avoid problems, reduce risk, improve outcomes and never have to say, “What was I thinking when I made that decision?”

Recovering CEO Larry J. Bloom helped grow BioLab to a $700+ million dollar company. Bloom also served as Chairman of the Board of NSPI (now APSP). He is the author of The Cure for Corporate Stupidity: Avoid the Mind-Bugs that Cause Smart People to Make Bad Decisions, and co-founder of Swimming Pool Retail Academy, on the web at www.swimmingpoolacademy.com.