Misconceptions of the Analytic Mindset
One reason that organisations with a prevailing Analytic mindset are significantly less effective than their more “Rightshifted” peers lies in the misconceptions these organisations perpetuate, misconceptions that impact these organisations daily.
- Shareholder Value or EVA (Economic Value Added) is the ultimate reason for doing business. Fact is: EVA is not a reason. It is just a result and a necessary side effect of doing business.
- Companies must provide the financial markets with earnings guidance and will be rewarded for this. Fact is: Providing shareholders and analysts with predictions of future results results in a “fixed performance contract” which forces delivery of the promises made at all costs. Companies including UBS, Porsche, Google, Coca Cola, and Citigroup have abandoned this practice.
- Growth and profit are the most important measures of success. Growth can in some cases be a good indicator of superior value creation and competitiveness. Often, however, it is not.
- It is possible to measure the performance of individual employees. Fact is: It is not. Organizations are “living systems” in which performance always depends on interaction between different players.
- It is possible to measure performance objectively. Fact is: Measurement is never objective. It is always based on assumptions previously made either consciously or nconsciously, and is only an indication of actual performance.
- With the right indicators, a good manager can manage the organization. Fact is: Indicators can provide “indications” with regards to performance, but never answers. They are useful if they raise questions in teams and among employees, but can be highly dangerous if interpreted as “objective.
- Performance is over-proportionally influenced by top management Fact is: Heroic management is ineffective in dynamic and complex environments. No longer can those at the top of organisations expect to take effective decisions in constantly changing and highly dynamic environments.
- The reasons for poor performance can be attributed to individual employees. Fact is: It is more important to ask what inhibits a person or team from performing well. We should focus on how changes in the system would enable folks to perform better.
My thanks go to www.betacodex.org for the above list.