The New York Times recently reported that Richard F. Syron, the CEO of Freddie Mac, received, back in 2003, a memo from David Andrukonis, the company's chief risk officer warning him, that the firm was financing questionable loans that threatened the financial health of the company. In his memo, Mr. Andrukonis said that those bad loans "would likely pose an enormous financial and reputational risk to the company and the country." The article also revealed that more than two-dozen high-ranking executives said that Mr. Syron simply decided to ignore those warnings.

According to another New York Times' article, UBS, the Swiss bank is under investigation by the SEC for violation of U.S. securities laws in regards to off-shore accounts held by U.S. citizens. The SEC prosecutors suspect that UBS helped their clients evade U.S. Taxes. Yet as early as 2005, some UBS executives had warned the chief the legal counsel of the Bank, Peter Kurer (who is now the Chairman) of those violations. Apparently the Bank did not take the appropriate action to address this issue.

Investigation of a catastrophe often reveals that someone, somewhere, had raised a red flag but no one in authority paid attention.

There were many warning signs of danger for the Jewish community in Germany before WWII, yet comparatively to the Jewish population in Germany at that time, very few saw the threat and left the country.

Warning signs are also critical in matter of health. Paying attention early save lives. An apparently insignificant symptom can be the indicator of pending major health disaster.

Why are warning signs often ignored?

It is probably because we naturally want to believe what is positive and have a tendency not to believe what is, or could be, negative.

How can we overcome this tendency?

Below are four ideas that might help.

- We should first make sure we identify a red flag. Past experiences and other people's experience can help us do that. Norman Cousins once said: "History is a vast early warning system." Consulting with people with experience that we trust may also be wise to do.

- We should honestly ask ourselves whether we are in denial. The worst of all deception is self-deception. By seriously considering that possibility, we may very well become aware that we are indeed in denial.

- We should do a serious cost-benefit analysis, considering the potential cost of ignoring a warning sign. We may come to the conclusion that the benefit is really not worth the risk.

- Maybe the best advice to avoid ignoring a warning sign is that we should have to courage and take the time to not only listen to others but also to ourselves.

As Karl Jung once said:

"Through pride we are ever deceiving ourselves. But deep down below the surface of the average conscience a still, small voice says to us, 'Something is out of tune.'"

If both Richard F. Syron of Freddie Mac and Peter Kurer of UBS had considered those ideas, they possible would not be confronted today with one of the greatest challenges facing their respective careers and companies.