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ANALYSIS PARALYSIS

There's a medium-sized Midwest bank that ended up in desperate financial trouble because, several years earlier, its management invested about a quarter of a billion dollars in a sure thing.

The sure thing was the ill-fated Penn Square project, a badly planned and quickly overextended real estate scheme that sent banking lions like Continental of Illinois whimpering off into the Wall Street jungle like terrified mice. The small bank I'm talking about made a classic error with regard to this scheme.  Instead of sizing up the project for themselves - instead of asking for financial statements and running risk analyses - the managers simply followed the herd, assuming that, if the big guys were in on the deal, it was just naturally going to be a fountain of gold. Ignoring the principles of Pinpointing and Recording and Evaluation, they let the bank industry leaders do their "thinking" for them - and followed those leaders down the tubes.

I call this a classic error because it illustrates with gruesome clarity a kind of thinking that is extremely widespread in business circles today, and that always gets managers into hot water.  There are two, related bonehead notions tied up with this kind of thinking. First, you can get something for nothing - that is, there is a free lunch after all. And second, the people who are now out in front know where that free lunch is.  The conclusion to be drawn is simple: If you want to succeed in what you're doing, let other people tell you what works.

The bank managers I'm talking about didn't fall into this self-destructive mode of "analysis" all by themselves. The path to their investment bungling was laid out for them long ago, by generations and generations of managers whose watchwords were "Don't rock the boat" and "I can get it for you wholesale," and - most disastrous of all - "Follow the leader, he knows where he's going."

It's one of the most distressing features of modern business life that adherence to cliches like these are actually built in to the way managers think. We are amazingly adept at reinforcing the status quo. A young guy comes on board eager to learn and all fired up to perform, and he quickly gets the message from top management that he hasn't been hired to shake things up, he's been hired to keep them in place. Just follow orders. Do it my way. Observe the chain of command. Play it safe. But - and here's the joke of it all - at the same time get your people to perform.

That's as confounding a mixed message as you're ever likely to hear. On the one hand the manager is told that he's supposed to play by the rules, and on the other he's told to get out of his people something that can only be achieved by breaking the rules. We ask our managers to be winners, and we expect them to develop winning teams. But we train them, all along the way, to be wimps. And then we wonder why the quarterly report shows a drop in production or a rise in absenteeism. We wonder why this guy, whom we're training to be a good follower, isn't acting like a leader.

I really believe that the worst thing we do in American business is to manage managers - that is, to train managers to manage people, rather than juggle inventory and overhead. We have lost sight of the one truth that can turn a group of individuals into a winning team - the fact that they are individuals, and need to be motivated as such. We've forgotten Robert Half's wise observation that companies cannot create productivity; only people can.   As a result, we're continuing to motivate people to do exactly what we don't want them to do: to feel and behave like followers. In other words, like losers.

Ironically, we are doing this precisely because we are afraid of losing. We're so afraid of missing out, of being left behind, of making a mistake and being found out for it, that we have built up a whole business culture that is built on the philosophy of "CYA." You know what that stands for. Cover Your Ass.  First, last, and always, be sure that if something goes wrong, somebody else gets the blame. Worry about fixing it later. Much later.  Your first order of business - whether you're on the assembly line or in the office next to the president's - is to keep a low enough profile so that no one will know you've screwed up.  That's the way to succeed.

Crazy, isn't it? But it's part of the culture, all over the place.  Anybody who's been in business for more than two weeks knows it.  This attitude of being afraid to lose is responsible for more losses, I believe, than anything else in business. It's a profoundly
demotivating attitude which gets the minimum level of concentration, and initiative, and innovation out of people, and what you get out of that level is exactly what you should expect.  "The employer gets the employees he deserves." Walter Gilbey said that back in 1901, and it's just as true today as it was then.  You want to train your people not to take chances, fine. But pretty soon you're not going to have any chances to take.

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