Stop planning for the rationale

Recently Ive been struck by how much repetition exists in blogs, advice and research. How often do you see people and companies make the same mistakes as others before them,  we are repeat offenders…recidivist … and inherently flawed…

One of the major triggers for this was a blog by Benoit Felten – we are good at seeing the future, not at executing on it. Frankly it made me want to be sick.  As early as 1993 AT&T had successfully predicted, and gone as far as advertising its vision for  many of today’s leading products. Yet it failed (like the rest of its industry peers) to get anywhere close to capitalising on it…

How could it have been so inept?

Organisations have known about the Peter Principle “employees tend to rise to their level of incompetence” for decades… look around your workplace… still happens right?

We understand the value of employing good bosses, Xero’s Gary Turner wrote a good blog about Bozo explosions pictorially depicting what we all know,

Hire a B-grade manager, turn your back for a few months and then watch your business, once a shining example of excellence, get over-run by hordes of well meaning incompetents,

Again, take a look around….

Statistics are often interpreted wrongly, yet we hold the interpretations in great esteem…. weathermen anyone?

The majority of share investors are driven more by the heard than by solid decision making, seriously look at the almost daily fluctuations that the crisis in Europe has driven. One day there is hope cos a bunch of bureaucrats meet, the next day there is fear because the same people who’ve met 13 times before cannot find a resolution (theres a hint)… compare this with  Warren Buffet’s approach…

Remember when the financial crisis began, there was plenty of advice about learning from the Great depression, yet we are about too again…

The way we run our companies is apparently flawed. Take a look at that AT&T example again.  Rationally they (we the telco industry) should have done better.  But we didn’t…. look at the timeline… what happened in ’93? Mobile started, voip started… the company dropped the ‘far fetched’ to deal with the near and present challenges. It did this because that is what the leadership thought would appease the shareholder community. At least some are bucking the trend. The rationale was fascinating….

Shareholders’ interests are short-term, looking at the next quarter’s profits. But we believe that decisions made with the long view in mind are better for the business and the company’s bottom line. We think long-term and walking away from venture capital means we keep the freedom to make decisions that way.

Even companies that were demonstrating excellence (at least according to a particular framework created in 1982) have predominantly failed. Look at the performance of the companies used in the book “in the search of excellence”

Aka, the current model is fundamentally flawed.

I do strategy for a living,  constantly urging the business to change.  I do this based on facts, figures, demonstrable benefits, logical analysis and sound arguments.  I can say for a fact, that planning for the rationale almost never happens….

I’m beginning to loose the belief that being rationale even matters… it seems to me that those people and companies that break the rules… do the best. Maybe just maybe the rationale rules we follow have the unintended consequence of normalising us… companies and leaders like Steve Jobs (Apple), Jeff Bezo (Amazon), Lego, Microcredit all do things differently…