Too often I see and hear the impact of leaders not managing what lies in front of them. Rather, they manage what they would like to see or imagine is there. The consequence is usually underperformance. Characteristics accompanying it include crisis management, poor and late decision making.

When leaders manage what they would like to see, they filter and interpret data to support conclusions already made in their own mind. The Iraq war is an obvious case. People from a wide variety of leadership roles, filtered and interpreted data to give the predisposed conclusion required to take their favoured action.

In business, non-profit organisations and government, we do this every day. We begin a project with a view to what we want to achieve. We analyse the data available and search for new data to help support the project. It is rare that a project is aborted during the analysis phase.

Marketers interpret focus groups and quantitative research in its best light to support their pet product introduction, refresh or campaign.

Research groups interpret data favourably to give support to their theory, especially if it is linked to a commercial outcome.

Public policy is often formed under a directive based on an ideal. The interpretation of data collected is made to fit conclusions fitting the ideal.

Sales figures are interpreted in the best light to support the notion that sales are on target. Head office need not worry, and by the way, can leave us alone.

Costs are interpreted within the narrow confines of a sub-cost centre or the overall costs of the organisation, depending on which looks better.

The impact of missing a deadline on a critical path for project delivery timelines are smoothed over. Not because a plan has been developed to get the project back on time, but so as not to give bad news.

Managers take a liking to a particular management theory and interpret all around them within the confines of the theory. The fact that the theory only works in a narrow range of parameters is not taken into account. The desire to make managing unwieldy things like people, simple, takes over.

What creates this inability to see what is in front of us for what it is? What stops us working with reality instead of a norm we want to see?

In my experience in comes down to fear. There are at least two direct sources of fear.

For some people it is the fear of failure. Having set out a plan of action they cannot accept data which shows the plan to be failing.

The fear is personal. It may be reinforced by organisational attitudes to failure, but the driver of the fear is based on personal yardsticks of worth.

To be right is good. To be wrong is bad.

People hold deep seated phobias of failure built from their interactions with family, friends and school at very young ages.

From birth, people are fearless. It only takes a few years of pre-school and school to learn that being "right" gets rewarded positively and being "wrong" gets rewarded negatively in most cases.

For others, it is the fear of not being accepted. The organisation's view of failure is, in this case, the key driver. When failure is not accepted, it is less that people see failure is bad than that they worry about their status. In some circumstances they also worry about their continued employment.

Managers are not likely to highlight shortfalls in their department when doing so is perceived to carry a negative consequence.

Managers hide things or contest findings from audit rather than fix the faults. They pad out sales figures by arranging for a sell-in campaign to distributors rather than accept that sales are poor. Others cling to a theory from a business book they read to assume credibility by association from a well known business identity.

All of the above happens in an effort to be accepted by their superiors, peers and subordinates.

To turn around the tendency of not facing reality requires action from the leaders of the organisation.

The first action is to always face reality oneself. Demonstrating that it is preferable to own up to a mistake and correct it rather than perpetuate it sends a powerful signal to subordinates. A signal they are apt to copy.

The second action is to demonstrate that mistakes are to be learnt from.

The third action is to anticipate that things will go wrong and decisions made in good faith will be seen to be poor in hindsight. Use contingency planning and performance measurements to know when things are going wrong and take corrective action.

The fourth action is to celebrate limited success in difficult circumstances as much or more than good success in easy or fortuitous circumstances.

Leaders who encourage their organisations to face reality squarely will reap the rewards of a candid organisation; high levels of productivity, innovation and morale.