
Why Smart Leaders Still Make Bad Decisions—And How to Avoid Their Mistakes
In 2000, Blockbuster was at its peak. It had over 9,000 stores worldwide, a dominant grip on the home entertainment industry, and an unstoppable $800 million late fee revenue stream.
When a small startup called Netflix approached Blockbuster with an offer to sell for $50 million, Blockbuster’s leadership laughed them out of the room.
Today, there’s one Blockbuster store left. Netflix? A $250 billion giant.
Kodak made an eerily similar mistake. It wasn’t just a leader in photography—it invented the digital camera. But Kodak’s leadership team, fearing the impact on its highly profitable film business, decided to bury the technology. The result? Competitors seized the opportunity, and Kodak filed for bankruptcy in 2012.
Microsoft once had the chance to buy Google for $1 billion in the early 2000s. They passed. Today, Google is worth over $1.7 trillion.
These companies weren’t struggling when they made these decisions.
Each was at the top of its industry. Their leaders were smart, experienced, and had access to incredible resources. Yet they missed the biggest opportunities of their time.
It’s easy to look back and see their mistakes. That’s hindsight bias at work—we assume that their errors were obvious. But at the time, their choices probably seemedlogical, rational, and well-informed.
The real question for today’s leaders is:
👉 Could that be you?
The Hidden Forces That Lead Smart Leaders Astray
These weren’t just bad business calls—they were decision traps at play.
We like to think we make decisions based on logic and data. But in reality, our brains are wired for efficiency, not accuracy. We rely on mental shortcuts that help us make quick judgments, but in complex situations, those shortcuts lead us straight into traps.
Here are three of the biggest decision traps that might have played a role in these famous failures—and that could be sabotaging your leadership today:
1. Status Quo Trap: “What We’re Doing Is Working”
Blockbuster and Kodak both suffered from status quo bias—a natural tendency to prefer stability over change. When you’re at the top of your game, making a radical shift feels unnecessary—even risky.
But the fact that something works today doesn’t mean it will work tomorrow. Markets evolve. Competitors adapt. Technology disrupts. Leaders who get too comfortable with the status quo are often blindsided by change.
2. Frame Blindness: “We’re Asking the Wrong Question”
One of the biggest dangers in decision-making is framing the problem too narrowly—so narrowly that you miss the best solutions.
- Kodak didn’t just ignore digital cameras—it framed the problem as “How do we protect our film business?” rather than “What’s the future of photography?”
- Blockbuster framed Netflix as a DVD rental company, rather than a digital-first company that was redefining consumer behavior.
- Microsoft saw Google as “just another search engine” rather than a company pioneering a new way of organizing and monetizing information.
All of them defined their challenge too narrowly, which led them to overlook broader shifts in their industries. That’s Frame Blindness in action.
3. Overconfidence Trap: “We Know What We’re Doing”
Success breeds confidence, and confidence—unchecked—leads to overconfidence bias.
Blockbuster, Kodak, and Microsoft all assumed they had superior industry knowledge. They were the incumbents. They had the experience, the resources, and the market dominance.
But overconfidence makes leaders dismiss emerging threats. It creates blind spots. When leaders stop questioning their assumptions, they stop adapting—and that’s when disruption happens.
Are These Traps Sabotaging Your Decisions?
It’s easy to assume that we wouldn’t make the same mistakes as Kodak or Blockbuster. But the reality is, decision traps are invisible in the moment.
👉 Have you ever dismissed a new idea from your team because it didn’t fit with how things have always been done?
👉 Have you ever resisted a process change because “what we’re doing works just fine”?
👉 How often do you find yourself making quick decisions based on instinct—only to second-guess them later?
Recognizing these traps is the first step. Avoiding them is another challenge entirely.
That’s why I put together a free guide on the 25+ most common decision traps leaders fall into—and how to avoid them. If you want to make smarter, more strategic decisions, you can download it here.
Let’s make better decisions together.
For further insights into decision-making frameworks and avoiding common decision traps, check out our other blog articles and subscribe to our newsletter.
If you’re interested in more practical strategies for overcoming decision traps, check out my book Enabling Empowerment, where I go deeper into these concepts. It is also available in audiobook format on Audible.
Don’t have time to read the book? Check out this 22-minute pre-recorded webinar on Spotting and Sidestepping Decision Traps.
Still not enough time?!? Ok….here is an awesome interview by Jon Franko of the Manufacturing Employer Podcast that you can listen to in your car!
Chris Seifert is the author of Enabling Empowerment: A Leadership Playbook for Ending Micromanagement and Empowering Decision-Makers. With over two decades of experience in transforming organizations through strategic leadership and decision-making frameworks, Chris has helped teams cut through bottlenecks, optimize capital project budgets, and build cultures of accountability. He is passionate about teaching leaders how to empower their teams to make smarter, faster decisions without sacrificing business value.