Why do managers disregard the signals of an impending crisis?

Failing to act on signals and indicators of oncoming disasters is rather common, and always puzzling when seen retrospectively

Why does that happen?

There is ample evidence that managers and firms fail to anticipate “predictable surprises”, especially when they are unpleasant or when they significantly affect the bottom line of their companies. Based on our published research, we focus here on the three dimensions that push managers and firms to avoid taking action while recovery windows still exist, at the individual, firm, and industry level and explain how they work to induce errors.

We then propose several ideas to overcome the forces that push us to ignore potential disasters and suggest actions that can be taken to avoid making these type of mistakes. 

HEC Paris