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Nissan CEO Carlos Ghosn: Scandal of the Day

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Soon after having my morning coffee, I received a text from my good friend Terri, “Write about it. Nissan’s Carlos Ghosn fired, arrested over alleged income misconduct.”

My initial reaction was, “Here we go again — why do these accomplished, ‘smart’ people make such dumb choices?” Since I study this topic, many of my friends send me links to news articles, as I avoid TV and news. They make me depressed.

I sent her a quick text thanking her for looking out for me to which she replied, “What can I say. The world is lousy with bad decisions.”

When we come across such headlines, our natural reaction is, “Did he really need that money? Didn’t he have enough already?” Or something to that effect. Our question is a rational one. The truth is that these people are not being rational in terms of their behavior; they are being driven by hidden influences that steer them astray.

The Wall Street Journal reported that Carlos Ghosn was one of the most prominent auto industry executives in recent decades. He was the genius behind a highly interconnected set of relationships among Nissan, Renault and Mitsubishi, which now get complicated with his arrest.

As a society, we have always respected and revered those with higher intellectual abilities. We refer them as “the smart ones” and often find them in leadership positions of organizations. In the ’90s, Daniel Goleman, a psychologist and reporter for the New York Times, popularized the term “Emotional Intelligence,” and asserted that it was an even more important determinant of success than IQ.

My thesis is the following: “If IQ and EQ were the main determinants of one’s success, then we should not have any scandals.” It takes someone to have achieved a certain level of success to create a scandal. If a “nobody” does something stupid, it does not qualify to make front-page headlines. On the other hand, those who make the headlines are people of high stature — only those who have attained a certain level of notoriety. These folks tend to have reasonably high cognitive abilities and good people skills, as they need to have great ideas and motivate their people to work hard on their behalf.

Related: Can Science Be Trusted?

Related: You Want To Be Happy but Your Ego Wants to Be Right

So why is it that so many people with high IQs and EQs end up in scandals? There must be a missing element in the “smart” equation. Upon reflection, I labeled it “Judgment.” Our judgment is influenced by many things — a primary set of drives surrounding our primal needs for pleasure and position. Satisfying our greed and desires govern a number of our decisions.

The way to overcome this trap that can derail many distinguished careers is two-fold. We need to have clear values, coupled with the self-awareness to recognize when we are straying from our values and make the necessary course corrections.

Our brains are very good at “manipulating frames of reference, compartmentalizing thoughts and actions, rationalizing, manipulating memories, and otherwise shading perceived reality in  self-serving ways.” — Robert Prentice, University of Texas, McCombs School of Business

When you discuss values with most people, you will soon realize that most of them will list worthy examples and share wonderful intentions. The key is to verify if their behavior matches their intentions. Psychologists refer to this as the Intention-Behavior Gap. We find that the gap can vary within the same individual based on the issue and the context.

Judgment Quotient (JQ) is a measure of the Intention-Behavior Gap. There is no morality attached to this measure, it’s simply the alignment between one’s intentions and actions or the lack thereof.

In my opinion, judgment is a skill and can be improved with disciplined practice. The practice involves becoming extremely clear of our values and goals and getting into the habit of consciously reflecting to check if our actions are aligned with our values.

Over the past two decades since I have been practicing this behavior, I have noticed that it can take years to overcome our conditioning and develop new ways to respond to old triggers. The good news is that it does work and we can improve our Judgment Quotient and not unconsciously fall prey to the damaging tendencies of our being human.

While we will never know the exact reasons why Carlos Ghosn resorted to the financial misconduct that got him arrested, he will soon have to face the consequences and watch the rich legacy he built over years get destroyed.

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