[EAS]It's People, Stupid!

pjk pjk at design.eng.yale.edu
Wed May 22 20:57:54 EDT 2002

Subject:   It's People, Stupid!

(from INNOVATION, 22 May 2000)

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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