The reality no one wants to acknowledge

How distorted perceptions in management and "managed ignorance" block the potential of SMEs - and how we can expose this.

By Thomas Leitner

Unconscious distorted perceptions in management ("management bias") and institutionalised repression mechanisms ("managed ignorance") lead to important truths being ignored, conflicts avoided and opportunities wasted.

This article is intended to raise awareness of cultural blind spots and structural self-deception. It indicates how SMEs can realise their strengths through their outlook and self-reflection. Particularly in the lift sector, which is balanced between local handicraft firms and global groups, the ability to engage in self-examination will be decisive.

Risk of losing their independence

Recent takeovers of longstanding SMEs by international providers make clear how vital not just caring for but also further developing cultural and structural strengths are. Today, anyone who fails to achieve the balance between proximity, flexibility and professional management runs the risk of losing their independence – not as a result of outside pressure but because their own hesitation plays into the hands of market consolidation.

I would therefore ask my SME colleagues to ask themselves the following three questions:
1. What truths are only whispered behind closed doors in your company?
2. Where is approval rewarded – and objections tolerated?
3. When last was management seriously scrutinized - and what did this lead to?

When good decisions fail to occur

In many companies, where the problem lies is known but hardly anyone talks about it. There is often a gulf between image and reality. Those who are too open disrupt the harmony. The result is cultural blindness towards reality, caused by accustomed patterns, uncertainty and subtle protective mechanisms.

Typical distortions operate in management:
• Only what confirms existing convictions is heard (confirmation bias)
• Changes appear threatening (status quo bias)
• Criticism no longer arrives at the top (hierarchy effect).

As a result: Organisations revolve around themselves although they are convinced they are continuing to develop.

From my earlier experience as a business consultant, I know that there is a tendency to regard declines in sales as exceptions – until a key client jumps ship. Or that reports undergo amendment until they meet plan targets – meaning that when the warning signals are detected, it is too late.

Why changes are often blocked

Austrian Thomas Leitner has been the third managing director of Riedl Aufzüge since the end of 2023. Photo: © Riedl Aufzüge

Change is seldom only a question of logic. It affects identity, self-image and responsibility. Every course correction can be taken as criticism of earlier decisions. Particularly in owner-operated companies, where history and company development are very closely intertwined, this can become an emotional topic.

It is not the contents of the idea that provoke resistance but the feeling that one can no longer trust one’s own judgement.

As a result, good ideas are delayed, diluted or quietly disposed of. Not because they are unworkable but rather because they do not appear to be emotionally compatible.

Managed ignorance - how structures mask reality

This term describes a widespread practice. Reality is selectively perceived, critical language blunted to preserve the organisation's stability, negative signals ignored and figures optimised until they match the image. The problems are known – but no longer visible.

Typical signs:
• Only positive monthly reports
• No official feedback loop
• Linguistic avoidance: "not ideal", "could be improved", "not really an issue"

Yet the truth is long since a reality - it is simply no longer perceived.

Culture decides what can be said

Culture is not revealed in PowerPoint slides but rather in everyday life: in what remains unspoken, in the way mistakes are dealt with and in what one can openly object to.

Many companies have all the tools – mission statements, workshops, feedback processes. But without a matching attitude, all of this remains an empty facade. It requires the courage to be open and trust that openness does not weaken but rather makes strong.

SMEs can do it better

SMEs have strategic advantages: they can alter culture, make quick decisions and scrutinize themselves honestly. Not because everything is perfect – but because proximity, responsibility and the will to create are often more tangible here than elsewhere.

Responsibility does not mean doing everything right - but rather remaining capable of learning.

When trade experience is coupled with structural thinking, the result is entrepreneurial strength. Not by copying group company methods, but rather through the further development of internal principles. Clarity, reflection and a readiness to change.

The future belongs to those who shape responsibility – and SMEs can do precisely this with their strengths better than any other company form.

The author is one of three managing directors at Riedl Aufzüge.

More information: riedl-aufzuege.de