How excellent companies avoid dumb things

8 STUPID THINGS MANAGERS DO TO MESS UP THEIR COMPANIES

In a business climate where only the best companies survive and thrive, one thing is clear: you must avoid the stupid stuff. You must eliminate the things that leave customers and employees scratching their heads, frustrated and mystified.

The problem is that every company, no matter what size, battles to some degree a central tension: people with ideas on how to make things better, and hidden obstacles that keep those positive changes from actually happening.

In his recent book How Excellent Companies Avoid Dumb Things, Neil Smith  distills down what he’s learned by working in exemplary companies into a list of the key barriers that are holding back even the world’s best companies.

According to Smith, the following eight things are the typical barriers to desirable attributes of growth, efficiency, simplicity, and profitability.

1. Avoiding Controversy. Controversial ideas exist and are left unresolved because dealing with them would cause too much disruption. Politics, personalities, alliances and appearances all contribute to making ideas controversial.

2. Using Time Poorly. Even in organizations where people are very busy and long days are the norm, employees use their time very badly. There are three aspects to this barrier: the lack of time, the use of time and the value of time.

3. Resisting Change. The most human and pervasive of the eight barriers, this involves resisting the impulse to remain creatures of habit and complacency. People fear change because it is about the unknown.

4. Erecting Organizational Silos. These silos, or departments, within an company are necessary evils, providing structure and accountability, but at the same time preventing the flow of information, focus, and control outward.

5. Committing Ideacide. Many good ideas are shot down not for perceived lack of merit but because a manager feels threatened by the idea in some way. Employees are generally powerless in these situations. The result? Employees are frustrated and good ideas are never put to the test.

6. Making Decisions on Bad Data and Assumptions. Information can be incorrect, outdated, or difficult to obtain. Assumptions are made when data doesn’t exist or hasn’t been calculated. Decisions made using bad assumptions or incorrect information will always yield poor results.

7. Ignoring Size, Scale, and Scope. A great challenge for many companies is managing the economies related to smaller and less profitable customers or transactions. Companies ignore or don’t think about the potential impact of even simple size-based changes in the way they conduct business.

8. Ignoring Process. Existing processes can prevent great ideas from being implemented even if people are advocating for change. The problem is that there is no process to change processes. The issues that need to be solved often aren’t complex, but resolving them without a process in place to do so can be very complex.

Smith says that he’s never worked with a company that didn’t have all eight barriers present. Which raises the obvious question: Why is that?

“These eight hidden barriers are caused by both human nature and the way companies are naturally organized,” says Smith. “The human nature type of barrier has to do with the way we instinctively behave. For example, most people get anxious about the fear of the unknown, so there is a reluctance to change.”

“Structural barriers result from the way companies, rather than individuals, function. Take the case of organizational silos, which are important to provide structure to a company, but can make it difficult for people to share the same priorities.”

The key to avoiding the dumb things, to breaking down the barriers, seems straightforward enough: consensus. Smith believes consensus about specific ideas is the both the glue and the grease that keeps the business moving forward positively and ensure full implementation of ideas for change.

“Everyone who is going to be affected by an idea has to be on board with it,” Smith maintains. “Otherwise crippling problems will crop up during the implementation phase. If people weren’t consulted about something that will affect them or their sphere of influence, they may be resentful, they may have very practical, reasonable objections, or they may feel blindsided. None of these will help you get things done.”

“Getting consensus often means modifying an idea,” Smith continues. “But don’t think that’s about diluting its impact. Idea modification is what makes it possible for an idea to have impact. A great idea that doesn’t go anywhere because consensus has not been built, won’t help the company with its goals of increasing efficiency, boosting profits, and reducing complexity.”

How many of the eight hidden barriers exist in your company? What are you doing to eliminate them?