“Why should we bother with organisational change?” -Management
“What’s the point of organisational innovation when things are going well as they are – or sort of well, at least? Sure, every company has its pain points but that’s what the continuous improvement process/CIP is there for, right? We’re working on all that and we’ve come a long way already. Sure, people complain – but when all is said and done, won’t they always? After all there’s no way to satisfy everyone with any organisational model, so why bother at all? We have a long tradition of coming out on top, we have seasoned experts among our ranks and we’ll continue to do things the way that works for us.”
There’s a good chance you recognise some of these sentiments as either your own thoughts or those of your management – they are the fruit of a mindset that I like to call “more of the same” or MOTS and that has evolved after decades of top-down hierarchies in a lot of companies. This mindset is characterised by the dogma that all it takes for success is to push harder in the direction you’re already going. It comes with several thinking traps that block efforts to actually evolve and adapt to market realities:
- Elitism: The belief that somehow your company is better than almost every competitor and will come out on top no matter what because that’s simply where you belong.
This thinking is often rooted in a success story from the early years before the internet era, when the world was a lot smaller and the company actually was (among) the very best of its local ecosystem. In a digital marketplace era where everyone can source globally with no effort, however, such success stories cannot be recreated the same way. Make no mistake: Even if your company has a 200-year-tradition, the development of society and economics in the last 20 years have been far more consequential that the decades or centuries before.
- Defending the fortress: The idea that your company holds a unique advantage over others in the form of know-how, superior management or other assets that must be defended – also called an “economic moat” by Warren Buffet.
While such advantages are obviously real and desirable, defending them often becomes an excuse for not pursuing any further innovations after their establishment and thus embracing stagnation as salvation. Since we live in an era of exponential progress, this kind of thinking will make your products/services obsolete before long: I met a middle manager last year who confessed that his company’s only advantage in a certain area was the ownership of a patent that forced customers to buy from them. What the company will do when that patent expires in 2018 he had no idea – over the years, their manufacturing has become ridiculously inefficient because they had no competition and once they no longer can dictate the price they will probably fail as a supplier of this particular technology.
- Everyone else is incompetent: The conviction that any present shortcomings are the result of others’ incompetence and that everything would be alright if you could just clone yourself and install a copy of your own genius at all crucial points throughout the organisation.
This is called illusory superiority by psychologists and is a very common cognitive bias: For example most drivers consider themselves to be superior drivers in comparison to others. While this is of course statistically impossible, it’s also due to the fact that there are no objectively measurable criteria for “good driving”, much the same as “doing a good job” can mean something very different to different people – but everyone uses their own standards to measure everyone else’s performance by and is blind to alternatives.
In a traditional company this has dangerous results that separate perception and decision making from the actual reality: Workers at the lower and middle levels don’t trust management to make decisions for them so they report upwards in a manner that is likely to result in the outcome they find necessary. Management doesn’t trust workers to do the job the way they’ve envisioned it so they set up even more reporting and control mechanisms which again end up being manipulated by those affected by these seemingly unjust measures. Part of this is known as Goodhart’s law – it states that whenever a certain feature of an economy (or any other system) is named as indicator for how good/bad the system is doing, it ceases to be a good indicator because people will start to game it. Example:
When I was in sales, management decided to impose the rule that every salesperson should make at least X documented calls per day to customers – this was done because frequent phone contact with clients was seen as an indicator of an active sales force. The result was that people started to document every miniscule conversation they had with anyone at a client company to meet the call quota – people took minutes to type out the detailed content of a 20 second call with a secretary just to make the numbers look good. So by predetermining what indicates “doing a good job” in sales, management arguably worsened sales performance because people got caught up in busywork that did nothing to add value.
Theses are just some examples of the MOTS mindset’s negative effects on companies and workers in today’s economy. I’ve touched upon it before as the “do nothing” project and suggested a way to calculate the costs of its negative effects on the workforce. I’m sure many of you have experiences similar to the ones described above – if so, you are more than welcome to share them and we’ll be more than happy to discuss possible ways of transformation!