In most organizations, dangerous beliefs destroy most
opportunities for 20 times greater accomplishments. In
this article, I will expose some of the worst beliefs to
avoid and explain ways to avoid all dangerous beliefs.
When the CEO Speaks, People Take Action
Management authority Peter Drucker told me that one of the
most dangerous beliefs in organizations is that an increase
in brains comes with being promoted. Here's verification of
that observation: Executive assistants at selected
companies were asked what was the single, most important
thing their CEOs could do better. The aides spoke almost as
one in reporting that anything the CEO said was treated as
gospel. Underlings, for instance, scramble to make changes
even when the CEO was only asking an innocent question. The
CEOs assume that the response would come at little or no
cost from someone who already had the answer. Some
executive assistants estimated that 25 percent of executive
and managerial time in their companies was taken up with
answering such casual inquiries and making changes that
hadn't, in fact, been requested. The assistants wished
someone would advise their CEOs to stop asking casual
questions and making off-hand comments because the rest of
the organization operates on the misconception that these
words are major priorities on which careers will rise and
fall.
I'd Rather Do It Myself
Imagine you are taking a walk and stop to pick up a dime.
While you are focused on that one-tenth of a dollar, a
five-dollar bill floats by. Someone else grabs the
five-dollar bill. Grabbing that dime cost you $4.90.
Ignorant of what they are missing, organizations regularly
incur such large opportunity costs because these lost
profits don't show up on the accounting statements. As
long as an activity ekes out an apparent accounting profit
on its investment that's above the interest rate on U.S.
Treasury notes, corporate financiers are happy. That
misconception keeps many enterprises busy with tasks that
can be much better performed by others, albeit at a higher
out-of-pocket cost. But who cares if the out-of-pocket cost
is higher if the resulting returns are also higher?
Peter Drucker has gone further in observing that
outsourcing should be used to reduce the tasks that
management must do so that more management time can be
spent on the few tasks that add the most value to the firm.
The actual cost of the outsourcing, he has stated, should
be a secondary consideration.
Cutting Costs Can Slash Profits Instead
Cost reduction seems like something you should pursue
whenever possible. But that focus can be a profit-reducing
trap. Minimize costs in one part of a process, and costs
will swell in every other part of the process. For example,
if you run an expensive machine as little as possible, you
may have to pile up inventory in the rest of the production
process to adjust for the sporadic use of the machine.
Equipment used to further process what the machine produces
will also be idle when waiting for more semifinished
materials. The ultimate irony is that organizations
that pride themselves on cost cutting usually show little
or no volume growth. Equal energy put into providing new
offerings that are superior in their benefits might, by
comparison, expand profits by as much as many decades of
normal cost cutting.
"We Use All the Most Up-to-Date Practices": Hardly!
Almost every organization I have ever visited was filled
with people who prided themselves at being the best in the
world at what they were doing. Why were they so confident?
It's pretty simple in most cases. These braggarts had
little idea what anyone else was doing. I've come to
realize that such statements are signs of ignorance,
marking a sizeable misconception stall.
STALLBUSTERS
Encourage Unmasking False Assumptions
A company had assumed for decades that advertising would
work only when demand was highest for its seasonally
consumed food, yet others promoted similarly seasonal foods
all year around. Eventually, an advertising test was run
during the lean part of the year, and sales promptly took
off.
Here are questions to help you avoid making such false
assumptions:
• What are the things that your organization assumes will
almost always work?
• What are the things that your organization assumes will
seldom or never work?
• What are the things that your organization assumes will
probably happen?
• What are the things that your organization assumes will
be unlikely to happen or will never happen?
• On what beliefs are these assumptions based?
• Have those beliefs been checked recently?
• Are those beliefs still true?
Identify the False Assumptions That Need to Be Immediately
Challenged
Some misconceptions require more immediate correction than
others. Here are questions to help you set priorities for
where to turn your attention first:
• Which false assumptions have large potential consequences?
• Where can your organization's actions make the largest
difference in offsetting false assumptions?
• When would you need to act to get the most benefit or
avoid the most harm?
• What is the minimum evidence to indicate that you should
act immediately?
Use Assumptions That Reflect Actual and Critically
Sensitive Conditions
In most cases, no one will know what's going to happen in
advance. In the same way that the Titanic's designers
didn't think about sideswiping an iceberg, no one will
forecast such unusual events. You can only prepare by being
humble in assuming that many things can go wrong and work
on scenarios to prepare for those improbable, but highly
significant, events.
Open your mind to new ways of thinking about a volatile,
unpredictable future with these questions:
• What assumptions have worked best in the past for
organizations that operated in circumstances somewhat like
yours?
• Which of these assumptions fit your organization's values
and style?
• Which of these assumptions would be received
enthusiastically by users of your offering, customers,
employees, partners, suppliers, shareholders, lenders, and
the communities you serve?
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With these new perspectives, you can contain and eliminate
dangerous beliefs that deny you and your organization your
full potential to accomplish 20 times more with the same
time, effort, and resources.
Copyright 2007 Donald W. Mitchell, All Rights Rreserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of six books including The 2,000 Percent Squared
Solution, The 2,000 Percent Solution, and The 2,000 Percent
Solution Workbook. Free advice on accomplishing 20 times
more is available to you by registering at
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