The Perils of Relying on a Faulty Premise

Faulty Premise

Whether or not people are religious, they are deeply spiritual in any endeavour including the numbers-focused realm of business. People have unshakable beliefs in economic, social, political, and historical aspects of business even in the face of incontrovertible proof to the contrary. In fact, such proof will often backfire and further strengthen people’s spiritual beliefs in myths and other folklore.

Spirituality exists in those who advocate for progressive forms of management. And it is not just a belief in “change for the better” in terms of human and business results. It exists, more importantly, in what they believe most top business should be doing to affect change, such as:

  • Change behaviors
  • Commitment
  • Leadership
  • Humility
  • Scientific thinking
  • Think long-term
  • Respect people

or what they believe most top leaders want with respect to improved business performance:

  • Higher profits
  • Greater market share
  • Lowers costs
  • Higher quality
  • Shorter lead-time
  • Higher productivity

These are the main premises, individually or collectively, for the arguments that are used to sell progressive management to top business leaders. Yet, these are vast simplifications of a complex, if not chaotic environment whose daily function is based on hierarchy and directed by commands from superiors to subordinates. Corporations are not egalitarian democracies, contrary to what progressive management advocates wish them to be.

All of the management innovators, from early 20th century Scientific Management to late 20th century Lean management and Agile suffered from two systematic errors in relation to the problem they were trying to solve, which is to fundamentally change leadership and management practice. The systematic errors are: 1) misunderstanding the type of problem they faced and 2) consistently underestimating the complexity of the problem regardless of time or place. How did they do that? They did it by not bothering to understand, or negating, the unique social and political wants and needs of top leaders.

They fail, for example, to recognize that short-termism is merely an apparent problem, not the actual problem. Top leaders, like any professional, must meet their short-term obligations. That is the nature of the work. However, the long-term performance of business, while important, is of far less importance than long-term personal commitment to uphold and pass on the required leadership preconceptions and social and political norms. In doing so, they achieve the far more important objective of maintaining the status quo.

Let’s say a person develops a management innovation based on a hypothesis that top business leaders want to become better leaders or obtain higher profits. The innovator works hard to gain top leaders’ interest in their innovation, and soon they find some customers and start to make a living from it. Having found some customers, the innovator thinks their hypothesis is validated. But in reality it is just confirmation bias. The innovator has, like all those before him, conflated the interests of a few top leaders with the interests of the entire group of top leaders (generalization from a small sample fallacy). Importantly, the causes for lack of interest from top leaders as a group is ignored.

Most of the top leaders who accept the management innovation will reduce, dilute, or alter it in ways that best suit their interests. They do this not because of fear or defensiveness, as is typically thought. So what are their interests? Most top leaders do not want to upset the status quo because they value the past and want to maintain a sense of continuity. They have a deep-rooted respect for and faith in traditions; an appreciation for the past and a desire to connect to something much bigger than themselves. That includes preserving the cultural heritage of leadership, fostering a sense of belonging, shared destiny, and assuring that the future will remain in proper order. Importantly, that includes a personal commitment to maintain, if not expand, those who will subscribe to and uphold the traditions.

Leader Highest in Status
Top leaders, highest in status, occupy the superior (offensive) position.

Top leaders’ interest is leadership and governance, particularly maintaining their status and varied rights, privileges, preconceptions, methods, rules, tools, and myths as they have historically existed to maintain order. To that end they apply and sustain a strong offensive position, thereby negating claims of defensiveness. Consenting to different preconceptions and transgressing economic, social, political, and historical norms, which progressive management requires, is to be avoided.

…the enemies of progress play offense.

Melinda French Gates

Thus, people who advocate for progressive management greatly misunderstand top leaders’ interests and motivations. They think leaders fail to understand or develop the behaviors that will produce better financial results, not realizing that leaders do understand and see no need to develop new behaviors that will produce better financial results. There is no requirement for leaders to do what others lower in the social hierarchy would like them to do. Any interest in getting better financial results is solely at the top leaders’ discretion using whatever method they choose.

Furthermore, educating leaders about progressive management, new behaviors, scientific thinking, neuroscience, etc., does not mean they will make use of that knowledge. Any new knowledge is theirs to use, modify, or not use as they see fit. That is their right and privilege. Consequently, the premises upon which progressive management rests — the vast simplifications of a complex, if not chaotic environment — are either faulty or irrelevant. More than that, evidence disconfirming top leaders’ viewpoint is largely disregarded. Hence, “no sale” for most top leaders, rendering management innovations as ephemeral. However, knowing that will likely not change the beliefs of those who advocate for progressive management. They will continue to plow forth, perhaps more earnestly than ever before.

What is remarkable is the staying-power of these faulty premises. For over 125 years, advocates for progressive management have experienced the same types of difficulties resulting in very limited success (not to mention wasted time, effort, and money) by not recognizing the faulty premises. But what if they did, would they have any greater success? Progressive management fundamentally relies on an appetite for substantial change which most top leaders, throughout history, do not have. This seems to relegate progressive management to a lower-tier method of producing better leadership and business results. In other words, it is among the last of many choices that a top leader could make.

What can develop top leaders’ appetite for substantial change? Given the vast empirical evidence, it seems that provocations from those lower in the hierarchy will succeed in only a small number of cases (compared to the total number of businesses, some 330+ million globally). Still, that will be good enough to keep many boutique consultants in business, and localized (company-specific) improvements will indeed be made. That is good. But even then, in most cases, the actual amount of change is usually much less than hoped for given how status regulates progress. Meanwhile, the larger problem, continuation of archaic leadership and management practices, remains unchanged.

The more likely scenario is that many more top leaders, perhaps en masse, will come to progressive management on their own, as they do for most other things, when they see a need for it. So far, that has not happened, but the need could emerge in the future. An X-factor is the effect that artificial intelligence will have on financial and labor productivity. If the effect is substantial, then that undercuts a large (historical) portion of the of raison d’être progressive management.

SIDEBAR: There is no conspiracy here. Leaders just do what leaders do. Though for some things there is coordination due to deeply shared interests.

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