Misconceptions of the Analytic Mindset

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

– Bob

5 comments
  1. Do you have any sources, research or other stuff to help document the Analytic vs. rightshifted performance? I’d really find these immensely valuable.

  2. In the software development domain you might like to look at the ISBSG data, some excerpts of which appear on charts in some of my videos. More broadly, Net Promoter Score seems to correlate well.

    – Bob

  3. Are you saying there’s no way to work out if anyone is under performing?

    • Hi Steven,

      Thanks for joining the conversation. I’m saying (in tune with Deming’s 95% rule) that if we accept that 95% of any individual’s performance is a consequence of the system they are working within, and only 5% a consequence of their own efforts, skills, experience, talent, etc., then what chance do we have to separate out the 5% from the inevitable noise and variation in the work? Thus, the whole notion of “under-performing” becomes dysfunctional and disrespectful to the workforce.

      Of course, there will be slackers, disengaged folks, etc. But aside from the sociopaths, psychopaths and other pathological cases, even these characteristics are attributable in large part (e.g. 95%) to the way the work works. To believe otherwise is, as the post asserts, a misconception born of the Analytic mindset.

      – Bob

      • Happy to be part of the conversation! Having not heard about Deming’s 95/5 rule before, I’m naturally sceptical. Some developers are much more productive than others (we seem to hear this a lot lately). Certainly a broken organisation will find it hard to attract and retain suitable talent. An organisation that breaks will find it’s productivity going down due to the rearrangement in the make-up of it’s staff (i.e. brain drain). This is still part of the system though and I grant that it’s not the only factor. I can’t accept that you can simply hire taxi-drivers to be programmers though.

        Since you mention sociopaths/psychopaths, I’m happy to say that toxic management is one sure way to break an organisation. The only thing keeping some companies afloat is the recessionary conditions leaving some folks to consider “it’s better the devil you know” (and remain employed in their toxic workplace).

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