Some of what looks like lack of smartness is actually good for stability of an organization. How does this work?
Organizations that constantly learn are constantly in flux and experiencing ambiguity … and usually, more than a little anxiety and mixed feelings. Constant learning is stressful and constantly adapting to change means constant changes to practices and policies.
“Functional Stupidity” serves the purposes of leaders who value stability over learning and adaptation. As such, it may be rational in the short-run to optimize on stability. Can Functional Stupidity be useful in the long run?
The tradeoff between stability and learning is a classic trade-off between getting a quick, short-run fix, versus crafting a long-run solution.
Good policy (“we optimize on learning”) usually makes you worse, then better. Bad policy (“we optimize on stability”) provides a quick fix…and a longer-term compounding of the larger organizational learning problem.
Read the intriguing paper: A Stupidity-Based Theory of Organizations