Very few companies are ever driven out of business by their competitors.
I’ve found that this statement upsets a great many people, all of whom are quick to jump up and start providing examples of companies that were, in fact, driven out of business by their competitors. This is missing the point. Indeed, it’s rather like a detective in a murder mystery concluding that the cause of death was that the victim’s heart stopped. It matters whether the heart stopped due to lead poisoning, for example in the form of a bullet, or due to some other cause. Indeed, understanding exactly what led to that heart stopping moment is a key part of solving the mystery.
Similarly, while it’s not so unusual for a failing company to have the coup de grace administered by a competitor, how they got to that point makes all the difference. Focusing only on the end point provides a very simple, comfortable solution, but not necessarily a particularly useful one.
Robotic Chromosomes, for example, was a company that dominated a particular niche in the bioinformatics market. They were an early entrant into the field and their products were initially the best on the market.
Over the course of several years, though, they developed a view of their clients as idiots. The fact that their clients were all highly educated research scientists did not enter into the equation. If they had trouble using the software, they were idiots. As a result, the company became increasingly less open to feedback from either their clients or from the market. While their market share was increasing faster than the market itself, they could get away with that attitude. Eventually, though, their growth started lagging the growth in the market. Phrases like “law of large numbers” and “temporary aberration” were batted about. When their market share started shrinking, phrases like, “temporary aberration” became even more popular. The view of the clients as insanely stupid for buying competing products also became more common.
Today, they no longer exist. Were they driven out of business by their competitors? Only in the sense that they put themselves in a position to allow their competitors to drive them out of their dominant position in the market. Sure, their competitors may have pushed them over the cliff, but they were the ones who chose to walk to the edge and lean over.
Now, it may reasonably appear from the preceding description that Robotic Chromosomes was taken down by a clearly defined event, that is, viewing clients as idiots. That is not, however, quite correct. While it may appear that way in retrospect, the reality is that Robotic Chromosomes suffered from a series of cascading errors. Each mistake was small, easily overlooked or ignored. Each mistake led to more mistakes until eventually the company was suffering from so many small cuts that it eventually had no strength left to resist when its competitors moved in. So how does a company avoid this death of a thousand knives?
The obvious answer is that they needed better communications. While true, it again misses the point. Communications is where problems show up, but the communications are rarely the problem. Rather, the dysfunctional communications are the symptom of the problem. It’s critical to look beyond the symptoms to identify the real problem. Otherwise, you spend all your time looking at the wrong things, as Robotic Chromosomes so eloquently demonstrated.
Avoiding that fate requires a willingness to accept negative feedback; it means being willing to hear what people are saying about your product, your service, or your management style. If you aren’t willing to listen, or if you structure the way in which you listen to negate the feedback, you’re setting yourself up for failure, one step at a time. For example, creating a culture that mocks and demeans your clients is not a recipe for success, and closes you off from valuable feedback from those clients.
Being willing to accept feedback is only a first step though. You have to create a context in which employees are not afraid to give you that feedback, and in which they believe that providing feedback is worthwhile. If people that they’ll be punished for being critical or regarded as “not a team player,” it’ll be hard to get them to provide feedback.
Next, you need to clearly define your goals and also define how you’ll know whether you’re succeeding or failing. Robotic Chromosomes had very fluid definitions of success, definitions that shifted regularly to avoid facing unpleasant results. It’s important to separate the evaluation of the feedback you’re getting from the testing to see if the criteria for that evaluation are valid. In fact, verifying the validity of your criteria should be done before you then evaluate your feedback: otherwise, it’s too easy to redefine success and give yourself a few more cuts. None of them seem all that bad at the time.
Step by step, over the course of several years, Robotic Chromosomes successfully created an environment where any negative feedback could be ignored because that feedback was always coming from idiots. Their competitors didn’t drive them out of business. They drove themselves out of business; their competitors simply put them out of their misery. How will you avoid the death of a thousand knives?
This is an excerpt from my new book, Organizational Psychology for Managers
When there’s a problem, perhaps a critical deadline was missed or you lost an important client, what could be more fair and just than finding and punishing the person responsible? Surely fixing blame is the best way to make sure such problems don’t happen again! Blame is, after all, a natural response when something goes wrong. It’s what we do in our larger societal culture: after all, if you get a speeding ticket, it’s clearly your fault, right? You did something wrong. You were to blame for going too fast. Or maybe the real blame lies with the unfairly and ridiculously low speed limit, or the cop who just happened to pick you even though other people were obviously going much faster. In any case, though, you’ve learned an important lesson: pay more attention to whether there’s a police car on the road and maybe invest in a good radar detector. What about the speeding? Well, that behavior may change for a short time, but rarely does the occasional ticket produce permanent, lasting change.
This is the problem with blame: it may fix responsibility, but it does not fix the problem. While it can be very satisfying to identify the perpetrator of the disaster that lost the sale or crashed the server, actually solving the problem that led to the lost sale or crashed server is considerably more useful. This requires returning to the concepts we introduced in chapter one, looking at the organization as a system, and understanding how the system is failing. Failure is feedback. If you listen to that feedback and learn to understand what it is telling you, you will identify a weak point in your organizational systems.
At Koloth (once again, the names have been changed), an internet startup, website malfunctions were a regular event. Each time a problem occurred, the person responsible for making the mistake was identified and punished. The problems didn’t go away. Even firing repeat offenders failed to stop the website problems.
What was really going on? Upon investigation, it turned out that several factors were contributing to the problem. First, the company had a very aggressive, eight week development cycle. The aggressiveness of the cycle meant that serious design decisions were constantly put off in favor of short-term, “temporary,” solutions.
Next, the database engineers were chronically overworked, so developers were instructed to not bother them unless it was really important. As a result, developers would roll their own database code, usually copying it from somewhere else. This created numerous subtle problems which the database engineers had to spend their time tracking down, further reducing their availability.
Finally, a particular senior engineering manager was infamous for his last minute demands on his team. It was not unusual for him to walk into someone’s office as they were leaving for lunch, or at 7pm as they were getting ready to go home, and announce that “this component must be completed right now!” When the component failed or was not completed on time, said manager was quick to blame the team member to whom he’d assigned it. Of course, obvious a problem as this may be, it didn’t come out until we investigated to see why there were so many failures. Once we got past the blame, and saw the outlines of the system it became possible to address the actual problems and change the outcome. Along the way, it turned out that the manager in question was secretly running a web-design business out of his office at Koloth: his clever use of blame prevented anyone from noticing for quite some time.
Now, one might argue that Koloth involved actual dishonesty, and that blame is an effective tool when dishonesty is not present. Unfortunately, when people are given an incentive to be dishonest, dishonesty emerges: this is our self-fulfilling prophecy at work. At Double Coil Systems, a bioinformatics company, when someone was found responsible for costing the company a major client, that person was disciplined or fired outright. As shocking as this may sound, it wasn’t long before no one was ever responsible for anything. Each person involved in any problem had some explanation for why it wasn’t their fault. The problem was always due to some other event. When someone did end up taking the blame, it was usually some hapless member of the IT staff. Apparently, the most junior member of the IT department at Double Coil ran the whole business and had complete control of every laptop at all times. Employees at Double Coil had mastered the art of CYA, and so the actual problems were never addressed. Even worse, when employees did notice a problem, they concealed the information lest they be blamed for it (particularly if they had made the mistake!).
The difference between Double Coil and a world class organization is that at the latter they take the time to understand all the components of why they are losing sales, identify the real bottlenecks, and fix them. Blame isn’t the goal; solving the problem is the goal.
In the end, affixing blame only encourages people to conceal problems or pass the buck. No one wants to be the one to take the hit, so they try to avoid it altogether. When the problem finally does come out, it’s far bigger and much uglier than it would have been had it been addressed early. Even worse, your employees are going to be too busy trying to dodge the blame to really concentrate on fixing things.
If you actually want to solve your problems, focus on the organizational system and understand how it may be inadvertently contributing to the problems you are observing.
Balzac combines stories of jujitsu, wheat, gorillas, and the Lord of the Rings with very practical advice and hands-on exercises aimed at anyone who cares about management, leadership, and culture.
Todd Raphael
Editor-in-Chief
ERE Media
Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Steve’s latest book, “Organizational Psychology for Managers,” is due out from Springer in late 2013. For more information, or to sign up for Steve’s monthly newsletter, visit www.7stepsahead.com. You can also contact Steve at 978-298-5189 or steve@7stepsahead.com.
September 26th,2013
Book Excerpt | tags:
Blame,
error correction,
leadership,
problem solving,
speeding |
Comments Off on Blame and the Vortex
As published by the American Management Association
Fans of James Bond movies might recall a scene that goes something like this:
We are looking at an unidentified room. Two people we’ve never seen before are standing in front of a desk. We might be able to see the back of the head of the man who sits behind that desk. A voice rings out:
“You have failed SPECTRE. Number 3, why did you not kill 007 as ordered?”
Number 3 stammers out some response and the voice turns its attention on the other person.
“Number 5, you have also failed SPECTRE…”
Eventually, Number 3 is told everything is forgiven and he can leave. Of course, this is SPECTRE. As soon as he walks out of the room he’s dropped into a tank of piranhas, or the bottom of the elevator turns out to be a trap door and Number 3 learns that Maxwell Elevators really are good to the last drop, or he dies in some other Rube Goldbergesque manner.
SPECTRE, as all Bond fans know, is the villainous organization headed by Ernst Stavro Blofeld, the evil genius who spends most of his time trying unsuccessfully to kill 007. Of course, given his track record, as evil geniuses go, he frequently seems more like Wile E. Coyote.
Blofeld’s problem, of course, is that every time one of his agents makes a mistake that agent dies. Those whom James Bond doesn’t kill are terminated by Blofeld himself. This makes it extremely difficult to conduct any form of on-the-job learning. When every mistake is fatal, the lessons tend to come a little too late to do much good. As learning organizations go, SPECTRE has issues.
Although the consequences are generally not so flashy, businesses do face some similar problems. Granted, most business mistakes don’t make for a good action movie, and dropping people in piranha tanks is generally frowned upon. However, there is still the very real problem of figuring out how to enable people to learn from their mistakes without those mistakes harming the business. James Bond, after all, at least gets a script.
Part of the challenge is that even when leaders are well-trained and highly skilled, there is a big difference between what one learns in most management training classes and the actual experience of leading a team, department, division, or company. That doesn’t mean that the training is useless, but it does mean that the training needs to be appropriate.
In sports, for example, athletes drill constantly: they practice the fundamental skills of their sport until they can execute those skills without thought. Doing that, however, is not enough to make an athlete a successful competitor. Such training is necessary, but it’s not sufficient.
As a soccer-playing friend once commented to me, there’s a big difference between the drill and the game. The drill is controlled and predictable; the game is not. The game is confusing and chaotic, and in the moment of truth all those carefully drilled skills simply vanish away. The problem is that chaos is overwhelming: it takes getting used to in order to navigate it. The Japanese term, “randori,” used to describe Judo competition, means “seizing chaos.”
Athletes practice getting used to chaos by moving past drills and practicing in various free play scenarios: mock games, spring training, practice games, randori, etc. These experiences enable the athlete to experience the chaos in small doses and hence become increasingly comfortable with it. They learn which skills to execute when. The day of the actual tournament, they are ready. When they do make mistakes, they also have something fall back on to improve their skills, as opposed to something to fall into and get eaten.
Business leaders can produce much the same results through the use of predictive scenarios. A predictive scenario is a live-action serious game focused around leadership and negotiation. Like all serious games, it both educates and entertains. Because it is live-action, rather than a computer game, leaders are forced to interact with other people as they would in daily life. Because the game is complex and competitive, participants engage with the game: there is no one right answer. Rather, the situation is chaotic and ambiguous; it’s not possible to predict an optimal solution or a perfect move. Participants are forced to constantly revise and adjust their strategies in order to counter what other players are doing.
Thus, a predictive scenario becomes a powerful practice environment for leaders who want to improve their skills and the skills of their subordinates without risking the financial health of the business. As with athletic training, a mistake is an opportunity to develop new skills or improve existing ones. Surprise outcomes will often indicate someone whose potential is not being developed or recognized: an employee may turn out to be a unexpectedly skilled speaker, be remarkably talented at inspiring and motivating others, display unexpected gifts as a salesman, or reveal themselves to be a masterful problem solver. If that’s not the job they already do, you’ve just been alerted to talent being wasted!
After the game, participants can analyze the action much as an athlete would analyze her performance with her coach. This analysis helps the participant recognize whether problems that arose were the result of a lack of skill or a failure to correctly apply a skill. In either case, you know what to do. There’s no need to guess, no expensive consequences, and no need for piranha tanks.
One of the other advantages of a predictive scenario is that the setting need not be restricted to a pale imitation of the office. Rather, it can be anything imaginable, provided that it forces participants to act as leaders, negotiate with one another, work together, come into conflict, and so forth. You could even be James Bond… or see just how well Mr. Bond would actually do against a Blofeld who knew what he was doing.
