Years ago I was hired to help a CEO of a $50 million business determine why his company always seemed to be reacting to one crisis after another rather than finding ways to reduce the number of crisis that kept happening. The CEO defined a “crisis as unexpected problems that cost lots of money and seem to occur over and over”.
It is ironic the CEO defined a “crisis” as unexpected problems that occur over and over. I told the CEO by his definitions it appears as crisis are not unexpected rather expected. He looked at me puzzled and said “If they were expected than our people should be able to prevent them from happening”. My response was “that is the point and if something(s) are happening over and over then a proper analysis of the data should uncover the root causes which then can be prevented from recurring”.
Finding The Root Cause
In 25+ years doing management consulting work I have found three issues consistently true about the root causes of all organizational problems. These are:
- Improper use of data will always lead to the wrong conclusions: Too many organizations measure the wrong things for the wrong reasons and never find any meaning in what they do measure. A lack of experience and understanding of basic statistics leads many organizations to the wrong conclusions about ongoing problems. Wrong conclusions only create more problems from initiation of the wrong actions which waste time, effort and resources..
- Management controls the collection and analysis of the data: This is a serious problem in many organizations. Management considers information part of their power domain and as such they control the collection of operational data and the subsequent analysis. Acting like Gods they dish out their assessment of results and related issues with limited scientific analysis rather with self reinforcing views that further their own self motivated power agendas. Subsequent actions to improve only create rework and diluted data that cannot reveal true trends of underlying root causes.
- No one dares challenge #1 & #2 and candidly speak up against the folly of these practices: In most organizations I have been in the employee’s are aware of problems caused by #1 & #2 but when asked why don’t they suggest a better way the common responses are “the people at the top say they want our suggestions, but what they really want is for people to agree with everything they say and go along with everything they do.”
Unless the organizations culture promotes candor without recourse then no information collected or analyzed can be considered valid and worthy of acting on. Extensive sharing of information is critical to both organizational effectiveness and ethics. That’s why exemplary leaders encourage, and even reward, openness and dissent.
My findings for the CEO who asked me to help him find the root cause of ongoing problems were as predicted, #1, #2 and #3. I presented the findings, backed up with real data, to the CEO and he then asked his management team to join the meeting. Then the CEO presented my report and asked his management team to respond.
- How do you think they responded?
- Dare to guess the subsequent actions if any?
As Jack Welch said “And there’s no need for sugarcoating. Use total candor, which happens, incidentally, to be one of the defining characteristics of effective leaders. ”