[EAS]It's People, Stupid!
pjk at design.eng.yale.edu
Wed May 22 20:57:54 EDT 2002
Subject: It's People, Stupid!
(from INNOVATION, 22 May 2000)
GOOD COMPANIES RUSHING TO PERDITION
They're falling to the left, they're falling to the right. It's more
than a trend, it's a mad rush. Enron, WorldCom, Global Crossing,
Kmart, Polaroid, Andersen, Xerox, Quest. What's going on? Question:
Why do companies fail? Answer: Managerial error. That's right.
Forget about (or at least put to one side) all those other reasons:
bad economy, market turbulence, blah blah -- all those things
outside management's control. Let's not kid ourselves: failure
isn't impersonal, it has a human face. What undoes companies that
fail "is the familiar stuff of human folly: denial, hubris, ego,
wishful thinking, poor communication lax oversight, greed, deceit,
and other Behind the Music plot conventions. It all adds up to a
failure to execute. This is not an exhaustive list of corporate
sins. But chances are your company is committing one of them right
now." But this rush to failure is not new. A good golden-oldie from
the failure archives is the 1980s NASA, where a "success-oriented"
culture produced the Challenger disaster largely because of the
organization's "mind-numbing complexity and unrealistic performance
goals all mixed up until the violation of standards became the
standard." A more recent example is Cisco, which was lulled into
complacency because it had recorded 40 straight quarters of growth.
(Surely that trend would go on forever!) Boston College sociologist
does a good job explaining why people and companies march off
cliffs, completely incapable of revising their mental models of
reality: "They may puzzle over contradictory evidence, but usually
they succeed in pushing it aside -- until they come across a piece
of evidence too fascinating to ignore, too clear to misperceive,
too painful to deny, which makes vivid still other signals they do
not want to see, forcing them to alter and surrender the world-view
they have so meticulously constructed." (Fortune 27 May 2002)
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