Caveat Venditor (Seller Beware)

Over the last 40 or more years, many leadership and management improvement innovations have come and gone. While some may be backed by rigorous scientific or empirical research, as well as good intentions, they can all be considered fads in the sense that they share the inability to solve the persistent problems that plague traditional leadership and management practice. These include:

Every innovator in leadership and management practice over the last 50 years has proceeded to sell their product via consulting or as packaged solutions. While the innovators may have been successful in making a lot of money, temporarily changing corporate culture, or influencing some top leaders for a few years, none can be happy with the overall result in retrospect. Which is to say, results fall well short of expectations — if not transformed in practice into something that caused harm to people — and its impact among high status people was ephemeral.

All of the innovators went forward with their great leadership or management innovation not understanding that these innovations are unnecessary for business success and the much bigger problem they faced: Path dependence and hysteresis.

Path dependence describes how the system’s history — be it the leadership system, which I call the “Institution of Leadership and System of Profound Privilege,” or the management system, which I call “classical management” — shapes its current state and future possibilities. Path dependence is a powerful force in thwarting change because, whether we realize it or not, the past is always present. We may believe our thinking to be unique or situated in present times, but it is actually deeply influenced by the past. Simply put:

What’s next is most likely to be determined by what is.

Douglas Dowd, Sociologist (1919-2017)

And “what is” is largely the product of “what was.” Initial choices or events create a “path” that becomes entrenched due to factors such as sunk costs, learning effects, network effects, established infrastructure, preconceptions, traditions (social norms), aesthetics, and spiritual connection. Individually and more often together, these make switching to an alternative path — a better path — difficult, expensive, or impossible (the “lock-in” effect). If the switch to an alternate path is successful, it is usually temporary because the entrenched factors soon come back into existence due to changes in company leadership or ownership.

The ways in which people are led and management go back some 10,000 to the time of the Neolithic Revolution. Written records of how leaders lead go back 5000 years to the time of ancient Egypt. Many of the ways that people are led and managed in organizations today date back to those initial choices — for example: blame, public humiliation, retaliation, greed, elitism, condescension, exclusion, etc. The main difference between then and now is that mental brutality (chronic stress) has replaced physical brutality (notwithstanding how long-term mental stress leads to degradation in physical health).

As the saying goes, “history matters.” But most people are not interested in history. And this is especially troublesome for the leadership and management improvement innovators. Their singular focus on bringing the innovation to market precludes study of history, and thus of more fully understanding the dominance of archaic modes of leadership and management practice that they hope to replace.

This is what happened to Lean management. What emerged most from the Lean movement since its inception in 1988 is “Fake Lean,” which is the result of path dependence. In most cases, Lean did not get organizations onto a new path. They remained on their classical management path but with the addition of some Lean tools for lower-level workers to use. The initial choices that were made centuries, if not 5000 years ago, produced Fake Lean. This gives you a sense of the enduring, (largely) irreversible nature of path dependence.

Hysteresis describes how past experiences can influence present behavior and decision-making. In other words, a system’s state depends on its history. Hysteresis is similar to path dependence, but it instead describes a feedback loop wherein a system’s current state depends on its past states. Unlike path dependence, hysteresis can be partially or fully reversible; the future state can return to the past state if conditions change (the memory effect).

While it takes a lot of energy to produce major changes to a management system, such as “Lean transformation,” it takes a lot less energy to undo the major change. It is akin to a rubber band, where a lot more force is required to stretch (load) it than to slowly relax it (unload).

Companies such as ThedaCare and Wiremold are well known for their successful Lean transformations. But, eventually conditions changed. There were changes in top leadership or ownership that quickly resulted in reversals back to classical management. In Wiremold’s case, several years after the return to classical management they readopted Lean management — but not to the same level of dedication and fidelity as before (see ① in the above hysteresis loop image).

In all such cases, there is a great loss of human energy (and spirit) for change (see ② in the above hysteresis loop image). The energy lost and capacity for change that was lost produce the well known “We tried that before and it did not work, so why do it again?” syndrome. Who can blame them for having that attitude? People poured their heart and soul into making needed changes, only to see it unravel quickly. The net result is a loss in future willingness (energy and spirit) to change and improve.

History is strewn with the wreckage left by well-motivated individuals and groups, shattered by forces they did not comprehend and could not control.

Douglas Dowd, Sociologist (1919-2017)

Those forces are the sociological effects of path dependence and hysteresis. It includes the happiness and satisfaction that most people have with the existing path, especially those highest in status, which results hysteresis — going back to the way things were; nostalgia for the past, whether real or invented. Happiness activates regions of the brain that release the neurotransmitter chemicals dopamine, serotonin, oxytocin, and endorphin. Those who are unhappy and dissatisfied with the current path are either in the minority or in lower-status groups who lack the power and influence to change paths.

It is likely that all sellers of leadership and management innovations are unaware of path dependence, hysteresis, and leaders’ happiness and satisfaction with path dependence. Nor are they aware that most top leaders view leadership and management innovations as existential threats if used as prescribed. That is why most leaders alter, weaken, dilute, or restrict the innovations, which in turn contributes to the perception of it being a fad. Seller beware.

If sellers knew of these barriers, would they do anything differently? I am certain that the vast majority of leadership and management innovators would shrug off the barriers and rationalize it the following way: “I can’t do anything about it, so I won’t bother worrying about it. I’ll just help those who want my help.” That thinking does not solve the problem; it perpetuates it.

I have never subscribed to that self-serving rationalization. As an intensely curious person and devoted critical thinker, I have identified why leaders are so averse to leadership and management innovations. I have gone a step further to describe what to do about it. Practical solutions exist, but I am sure there are more.

And finally, what do Douglas Dowd’s wise words mean to the management innovators? They mean: You need a much better plan than the one you have got.

SIDEBAR 1: The emerging neurological approach seeks to remove the inhibitors of organizational transformation and improve productivity by having top business leaders gain a better understanding of how the brain works. It asks leaders to act in ways that align with neurological science such that employees have a clear sense of safety and connection. It posits that top leaders who understand the mental and emotional states of employees will increase employee engagement, improve problem-solving, produce greater innovation, and less resistance to change. While scientifically correct, it is like most (if not all) other leadership and management improvement innovations: socially deficient in two ways: 1) The neurological approach assumes or hopes that top leaders are interested in science and facts, both of which are well known to be fair weather friends to top business leaders, and 2) Historically, it is workers’ role to provide the satisfying neurotransmitters to leaders — dopamine, oxytocin, serotonin and endorphin — not the other way around. (In terms of the popular “psychological safety,” it has historically been the job of workers to create psychological safety for their leaders by doing their job, not the other way around). These two deficiencies must be given full consideration. Of course, the past does not necessarily predict the future, but then again, the past is always present due to path dependence and hysteresis. Caveat venditor.

SIDEBAR 2: The view that “I’ll just help those who want my help” does not not solve the larger problems related to management innovations. Thus, having that view perpetuates the problems. You may question, “How true is that? And what can we do about it? Isn’t the alternative force?” It seems these are questions that people would rather not confront. It is better to avert one’s eyes and make believe no such problem exists. In doing so, it undercuts the ethos of “scientific thinking” and “problem-solving” that our community eagerly claims credit for.