Denying reality: When you can’t see what’s right in front of you
One of the most perplexing phenomena I encounter in transformation work isn't technical complexity or resistance to change, it's the refusal to acknowledge reality. Even when evidence of failure is overwhelming, leaders and teams can become trapped in a state of denial that prevents them from taking corrective action.
"The first principle is that you must not fool yourself—and you are the easiest person to fool." - Richard Feynman
The call centre that couldn't
I see this phenomenon regularly, in everyday behaviour as well as big projects but one that particularly sticks in my mind was a call centre transformation I was asked to review. The initiative seemed straightforward: upgrade telephony systems to route customers to service agents more efficiently, with better context about their inquiries. The project was supposed to take one year. When I arrived, it had been running for three years with no end in sight.
As an outsider reviewing the program, the problems were blindingly obvious: technology integration issues, promised features that didn't exist, and failed trials that hadn't delivered planned results. Yet somehow, these issues had persisted without meaningful intervention. The project team was so deeply invested in their original plan that they couldn't, or wouldn't, see what was right in front of them.
Instead of stepping back to reassess, they kept pushing forward with increasingly desperate attempts to make the original solution work. Objectively, they would have been more likely to succeed by starting fresh. But that reality was too painful to face.
Why we deny reality
This denial of reality isn't just stubbornness, it's driven by powerful psychological forces that affect even the most rational leaders. These forces are well-documented and have shaped some of history's most significant failures.
The planning fallacy: our optimistic delusion
Nobel laureate Daniel Kahneman and Amos Tversky first identified the planning fallacy in 1979, describing our tendency to make optimistic predictions despite knowing that similar projects usually take longer and cost more. This isn't just a minor miscalculation—it's a systematic bias that affects projects of all scales.
Consider Sydney's Opera House. Initially planned to cost $7 million and complete in 1963, it ultimately cost $102 million and opened in 1973. This wasn't because of incompetence; it was the planning fallacy in action. The original estimates focused on the ideal scenario rather than comparable projects, broke down the complex build into deceptively simple components, and failed to account for unknown challenges. Importantly, the government and key stakeholders were more interested in a plan that looked good rather than one that could actually be achieved.
The planning fallacy operates through several mechanisms:
We instinctively adopt an "inside view," focusing on the specifics of our project rather than learning from similar past efforts
We break complex projects into parts and estimate each piece individually, missing how problems cascade through the system
We discount unknown unknowns—those challenges we can't anticipate because we've never encountered them
Most fundamentally, we desperately want to believe we can control the future
The research proves that the planning fallacy is difficult to identify and avoid in the moment but I think the real failure is not amending the plan when it is proved to be flawed.
The sunk cost trap: the money pit of the mind
The sunk cost effect might be the most insidious barrier to facing reality. This cognitive bias, extensively studied by behavioural economists, shows how prior investments make us irrationally committed to failing courses of action.
One example is so famous that the “sunk cost fallacy” is sometime called the “Concorde fallacy” after the project to build a supersonic passenger jet . By 1977, it was clear that the jet would never be commercially viable, but Britain and France continued pouring money into it because they had already invested so much. A textbook example of how sunk costs distort decision-making.
The effect is particularly powerful in transformation work because:
The investments aren't just financial—they include time, reputation, and emotional energy
Teams develop deep personal attachment to solutions they've crafted
Admitting failure feels like admitting that all previous effort was wasted
The longer we persist, the harder it becomes to change course
The ego barrier: the high price of saving face
As leaders, we build trust by keeping our promises. But this admirable trait can become pathological when fear of admitting failure overrides good judgment. Studies in organisational psychology show that leaders often escalate commitment to failing projects to maintain their image of competence.
In transformation work, this manifests as:
Increasingly elaborate justifications for why things aren't working
Shifting definitions of success to match current reality
Avoiding tough conversations with stakeholders
Creating narratives that become increasingly disconnected from facts
Staying grounded: a personal journey
Let me be clear: there are no easy solutions to these challenges. When you're passionate about an initiative and deeply invested in its success, maintaining objectivity is incredibly difficult. I've fallen into these traps myself many times, and I still catch myself doing it.
That said, here are some approaches that have helped me stay more grounded in reality. They're not foolproof, but they've proven valuable:
1. Create reality checkpoints
I've learned to schedule regular sessions specifically designed to challenge current assumptions and plans. The key is making these structural rather than reactive, they should happen regardless of how well things seem to be going.
These work best when they're:
Facilitated by someone outside the immediate team
Structured around specific, measurable criteria
Free from blame or judgment
Focused on future actions rather than past decisions
2. Seek external perspective
Our closeness to initiatives inevitably creates blind spots. I've found it essential to:
Regularly bring in fresh eyes to review progress
Create safe spaces for skeptics to voice concerns
Actively seek out contrary opinions
Compare projects to similar initiatives in other organisations
3. Define clear exit criteria
One practice that's helped me enormously is establishing clear conditions for reassessment before starting any major initiative. These might include:
Missing key milestones by specified margins
Exceeding budget thresholds
Failing to achieve pilot results
Changes in underlying business conditions
4. Practice radical honesty
This is perhaps the most challenging but most crucial approach. It involves:
Modelling vulnerability as a leader
Celebrating when people surface issues early
Reframing "failure" as valuable learning
Separating the person from the problem
The freedom of facing reality
There's a paradoxical benefit to acknowledging reality: it's incredibly liberating. When we finally admit what we privately know to be true, we release ourselves from the constant tension of maintaining denial. This creates space for:
More creative problem-solving
Better relationships with stakeholders
Improved team morale
Faster course corrections
Actually achieving our objectives, even if by a different path
Reality denial in transformation isn't just about missed deadlines or failed projects—it's about our fundamental relationship with truth and our capacity for honest self-assessment. When we let go of our attachment to specific solutions or timelines, we create space for genuine innovation and meaningful change.
The next time you find yourself desperately trying to make something work, pause and ask: Am I facing reality? The answer might be uncomfortable, but it's the first step toward actual success.
Until next Friday, keep failing forward!
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