TBM 298: Retrospective Rationalization

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One of the huge traps I see leaders falling into in 2024 is retrospective rationalization.

What is retrospective rationalization? Some examples from our personal lives:

I was way too busy to exercise.

No, you just didn't feel like it.

I bought this expensive gadget to improve my productivity! It worked!

No, you like buying the latest/greatest. Look at all your unused gadgets.

Some historical examples:

The financial collapse was unforeseeable! We were following best practices!

No, you were taking excessive risks fueled by short-term profit motives. There is no scenario where housing prices would continue to rise indefinitely.

A ubiquitous, industry-wide example from the 2024 workplace:

A leader forms a narrative that during the period of low interest rates and a better economic outlook, they made calculated decisions around hiring, strategy, allocations, accumulating various types of debt, etc. And now that conditions have changed, they are rationalizing layoffs as a calculated decision to adapt to the "new reality" (or as a purging of poor hiring decisions that they weren't personally responsible for or were somehow duped into making).

No, they got caught up in the moment—intoxicated by charts (and valuations) that seemed to go up and to the right forever. They underestimated the impact of luck and timing. They believed they were stronger at strategy (and their products "sticker") than they were. They were losing touch with their teams and not taking the time to foster organizational resilience.

Remember, none of us are immune to retrospective rationalization! We all do it at some point. I was certainly caught up in the tailwinds of the last couple years! You?

So What?

This raises an interesting question: Can we do anything about it? Should we?

Does retrospective rationalization perhaps form some kind of valuable mechanism that protects us from disconfirming information? Does it benefit someone to rip apart the veneer of the last couple of years? Does it help to engage in self-doubt and hesitancy actively? 

Sure, some people at your company would get energized by an authentic mea culpa and a cozy, fireside "here's where I got caught up in the moment" chat and AMA. But is that a minority? Would most people see that as a sign of weakness or lack of strategic resolve? Would it boost (or hurt) morale?

Or is it best to tend to optics and just let it slide?

In chatting with people across many companies, I notice something else: we're all simultaneously falling into the trap of our own retrospective rationalizations while feeling gaslit by other people's retrospective rationalizations.

No one is immune, making giving advice or guidance difficult.

One tool I use personally is to keep a journal. I dug into this in last week's newsletter. Nothing helps you calibrate more effectively—if that's your thing—than seeing where your head was actually at in the past.

For people caught in the 2024 swirl, it can really pay to invite a friend into your internal monologue and ask them to challenge the ways you might be reconstructing the last couple of years in ways that aren't helpful. Example: My friend Carey reminded me over coffee this morning how I referred to my desire to write in the past rather than the story I was telling myself at the moment. Thanks Carey!

With teams and companies, the task is much harder.

There's the official narrative and then the hallways (or virtual hallway) narrative. Edgar Schein might distinguish this as espoused values vs. "artifacts." Espoused values show up in the official story. The hallway narrative manifests through informal conversations, gossip, and the stories employees share.

Espoused values tend to feel fake. But you may be surprised that the hallway narrative is more diverse than expected.

“Let It Go”

One bit of self-care advice might be to let go of the idea that, somehow, some act of epistemic justice will occur where people will admit their retrospective rationalization of past events. If you look at the current landscape and seek fairness or coherence—especially around recognizing and validating diverse perspectives—you will be looking for a while.

It may not—probably will not—come. Especially in 2024.

This may be an opportunity in disguise to address our personal need for a true North (or South) and foster a community with people who validate diverse perspectives (including yours).