What are the Dumbest Practices Used By U.S. Companies?

I am going to be in Singapore next week to do a number of things associated with the Singapore Human Capital Summit and something called the Distinguished Human Resource Visitors Programme.  I am doing an in-depth speech on innovation and implementation, and the link between the two, as part of the visit -- stuff I have been writing and thinking about for a long time.  That talk is finished and I am just working on rehearsing it a bit.

I am also part of the closing panel for the Human Capital Summit (You can see the line-up here if you are interested in the schedule-- senior executives from P&G and DBS, a the Minister of Trade and Industry from Singapore, and a Professor from Insead).  I am developing a list of things that I might talk about, but plan to make my final decision at the last minute.  There are a few reasons for this delay.  My remarks are supposed to be informal, as it is a wrap-up for the conference I want to be open to learning from it rather than go in knowing what I am going say -- experience be damned, and finally -- to be a realist -- I am going last after the first three speakers, and years of experience have taught me that, when you are in that position, you've got to be ready to cut back your remarks on the spot.  It used to upset me early in my career, but now I take it as a weirdly fun challenge  (indeed, I once was asked in Dubai to cut a talk from 30 minutes to 8 with about 5 minutes warning.... I was amazed how easy it was to do and how much the audience seemed to like it. Ever since then, I've kind of enjoyed when strange things happen during talks.. so long as there isn't over hostility or dysfunctional dynamics in the room.)

One thing I am thinking about emphasizing is that, despite the recent clear evidence that U.S. leaders and companies make flawed assumptions and use suspect management practices, some of the our worst ideas seem to keep spreading to the rest of the world anyway.  I am brainstorming a list of dumb but widely used American management practices.  Here is my initial list but I would love to hear more ideas:

1. Dangerous Complexity.  The assumption that when we can't understand an expert, they must be both smart and right.  This is certainly part of the Wall Street story -- for years the financial wizards and economists have conveyed to the rest of us that we are far too dumb to ever understand what they are doing.  An interesting contrast, by the way, is JP Morgan CEO Jamie Dimon.  If you read Gillian Tett's Fools Gold, you will see that one reason that JP Morgan avoided the worst of the collapse was that Dimon believed that, if you were investing in something you couldn't understand, you should get out.  Clearly, most companies did not follow and are not following P&G 's A.G. Lafley's advice to keep things "Sesame Street Simple."

2. Dysfunctional Internal Competition.  This is a big theme in The Knowing-Doing Gap and Morten's Hansen's masterpiece Collaboration.  If you dig into the problems in the banks and a lot of other companies, they actually punish people who help others succeed, both via the reward systems and who gets the most prestige.  This seems to persist even though the evidence against such assumptions and systems are so clear.

3. Breaking-up Teams Constantly.  American companies often seem to love moving people around constantly, breaking-up teams, giving people new experiences, and so on.  Certainly, there is a time for fresh blood, but if you read J. Richard Hackman's Leading Teams you will see that the weight of the evidence is that breaking up teams less often rather than more often is linked to all sorts of effectiveness indicators.  Also, see this post about the Miracle on the Hudson where I discuss this literature.

So, those are just three that I am toying with.  But I bet that you have a lot more ideas and a lot of good ones. What do you think... What are the dumbest practices used by U.S. companies, the practices that unwittingly drive them to ruin, or probably more often, they succeed  DESPITE rather than BECAUSE they are used?

P.S. A big thank you to everyone below for your thoughtful and wide-ranging comments. I think there is enough material here for a book, not just a short speech.  Also, I just found-out this post was also put on BNET and there are another 35 or so comments there, which are also -- like those below -- quite troubling, inspiring, and often funny in a twisted kind of way.

Comments

[liman]

Other dumb behaviors / building on comments of others...

Companies aren't dumb, decision makers just don't receive feedback for dumb decisions.

Other dumb practices:
1. assuming you know what motivates employees as individuals
2. bonusing heavily on ST goals vs. longer term vision and collaboration between silos.

Personally, I'm very interested in how you (collective here) see social media impacting business processes in general and the issues discussed here -- if the "little people" gain visibility, it seems that the people who have gained power through information hoarding will need to find other sources of power.

What will it take for information hoarders to see open participation as a leadership opportunity?

Direct responses to @liman, please.

[Edward Kalbaugh]

"Post hoc ergo propter hoc" ("After this, therefore because of this") in my opinion is the most prevalent and pernicious form of corporate ignorance.
Edward Kalbaugh
President & CEO
Allegent Advisors
www.allegentadvisors.com

[Pat]

Rewarding Firefighters not Fire Inspectors.

In other words, the people spotting the problems and fixing them before the "fire" do not get rewards. The "firefighters" who rush and put out fires in progress do get reward.

But which is better for the company?

Once the fire starts, damage is already being done. "Fires" are stressful and distracting - but never seen a company yet that actively makes sure that fires don't happen. But seen lots of companies that reward the firefighters ( even when they were the "pyromaniacs" )

[Brian Hunt]

One reason that complexity is so dangerous is that it very quickly moves from within the organization to out of the organization (i.e. to the customer). In general customers hat complexity and they will take their dollars to companies that limit their complexity

[Tami]

Assuming that once you become an industry leader you'll stay there. This leads to the assumption that you do not have to treat your customers well, because you are the biggest, and therefore they will flock to you. Once bad customer service sets in, customers start jumping ship and telling others about there bad experienced and how much better their new alternative is. This leads to fewer new customers and more current customers leaving for better alternatives. Then, of course, when revenues start to decline, the company cuts back on customer service training and innovation leading to even more unhappy customers. And, the vicious cycle continues.

Also, my biggest pet peave in business which I have seen negatively effect countless companies is when management fails to deal with their "problem children." A few examples... not firing a destructive person because he is the only one who knows how to do x, or he is good friends with one important person in the company, or there is a hiring freeze so anybody is better than nobody. One toxic person can poison a whole department... and beyond.

[Wally Bock]

We don't run our businesses as if people matter. We know a lot about how human minds and emotions work, but very little of our management practice seems to notice. We know about reward systems and the need for security along with opportunity, but we don't seem to have done much with it.

We treat people like interchangeable parts. Human beings are marvelous, but complex creatures. They are good at doing human things. They are not machines.

We ignore the importance of supervision. We "promote" people into supervisory jobs without evaluating if they have a good shot at succeeding. Then we give them little to no training and even less support. Then we wonder why they don't succeed.

We hope for magical leadership instead of developing good systems. When we do develop systems we favor the engineered and the technological over the human and common-sensical.

[Patricia Rogers]

Killing the messenger. This includes accusing the messenger of disloyalty, blaming the messenger for the problem, accusing the messenger of not understanding the goals, firing the messenger or isolating the messenger by "outing" him/her among other employees, entering a derogatory comment in the messenger's HR file following the reporting of the message. These techniques insure the CEO that he will be blindsided by the competition or a regulatory body as nobody would want to be the one to report the bad news to the CEO that there is a problem. BTW, if you really want to know what's going on in your organization, ask your front-line people, not your middle managers. They're only protecting their own jobs. They know they can blame a front line worker for the problem and stay safe.

[Rodney Johnson]

Bob, here is another from my book Without Warning discussing the seven yellow flags that a Silent Problem is present

"When the risk of making a decision for employees inside the organization is considered to be greater than the benefit of making one. "

[www.facebook.com/profile.php?id=509888148]

1. Throwing Technology at Process issues. Instead of fixing the dysfunctions of day to day business processes, companies often throw technology at the issue (on the advice of some well paid consultants). $M later, you STILL have the same dysfunctional process except you have a shiny new webportal that nobody uses.

2. Scapegoating. Mistakes happen occasionally but management feels the need to blame somebody. The problem with this is that: A. The company doesn't learn from previous mistakes, B. It breeds a dangerous culture of hiding mistakes. One example in my own experience was that one of my previous employers fired the hardware engineering team for thermal design flaws in a new networking product. They hired a new team for v2.0 of the product BUT, guess what, the new team made the SAME thermal design mistake! Because v2.0 was a much bigger rollout, it was much costlier to fix.

[Ally Polly]

Another dumb thing companies do is hire smart people to support/hide the dumbness of the dumb, instead of just biting the bullet and dumping the dumb.

[Ally Polly]

The dumbest things companies do is to hire a Silver Bullet and think from that, everything will be ok. Clearly there are exceptional executives and individual contributors who can make a difference if allowed, but the expectation on the part of management that bringing in a Marquee Talent will 'change the business' is not only dumb but also damaging to existing associates. We all know success is not achieved in a silo- in order for a company to change the company has to be willing to look at multiple practices within the existing framework. Only then, will a good hire be able to be successful. i.e. you can't transfer a healthy organ to a sick body

[Mike Moroze]

I just stumbled upon this resource - haven't read the book. It looks like something that would be relevant here:

From the site:
http://www.fierceleadership.com/

"Susan Scott
CEO and founder of Fierce, Inc.

In her new book, Fierce Leadership, Scott busts six of the worst “best” business practices and reveals a technique she calls “squid eye”—the ability to see the obvious, once we know what to look for and to spot the “tells” that we’re falling prey to disastrous behaviors before they cripple us and our organizations. Scott offers surprising alternatives that leaders and managers at every level can put into place. With new approaches to everything from employee feedback, to corporate diversity, to customer relations, Fierce Leadership provides audiences with an honest look at what might be holding them back—and what to do about it."

[Wukong]

1. No one (esp leadership ranks) has got time/desire to read through emails/documents, etc. Everything's got to be a 1-liner to get noticed/addressed --> business doesn't happen at 1-liner increments.

2. Technology companies that don't use technology (in SNL terms, "I mean, REALLY?!!"

3. The process (e.g. a front end plan for lifecycle mgt) becomes the sole reason to do anything - i.e. totally risk avoidant --> business = risk mitigation/mgt (when you're trying to go in a new direction - is there really an absolute business case justification or does gut feel weigh in more?)

4. Overcommiting to a customer w/o any structure to deliver (e.g. operations, feature compliance) - you might win a sale only to back it out and lose a customer.

5. M&As that are not thought out. What's the integration plan/scope/timeline/units of success measurement?

6. Trying to take the business in a new direction w/o level-setting the company. What's the impact of the new? What needs to be changed, added, scoped out - et.c

[Matthew Chambers-Sinclair]

From a Quality Practitioner's perspective, the best list I have seen came from a September 2003 article in Quality Progress magazine called "The 7 Deadly Sins of Quality Management". The author, John Dew, branded these the 7 root causes for nearly all internal problems that occur in almost all types of organizations; these are:

1. Placing budgetary considerations ahead of quality.
2. Placing schedule considerations ahead of quality.
3. Placing political considerations ahead of quality.
4. Being arrogant.
5. Lacking fundamental knowledge, research or education.
6. Pervasively believing in entitlement.
7. Practicing autocratic behaviors, resulting in “endullment.”

If one were to do an honest root cause analysis on the big problems, one of these would likely be identified as the culprit; all are unnecessary, but unfortunately all too common. I've presented these to my management group, and it spurred some great discussions and some honest reflections on behaviors.

[D. Scott Beaver]

Controlling information about the financial performance of the organization. This happens frequently in private companies (fortunately not the one I'm with). The theory seems to be that financial info is too important to share with the underlings. The result is that people frequently wonder if their job is secure.

[Amit Jain]

Another thing which I could think is that many companies think if a certain thing has worked for last 50 years, it will work for the next 50 years also. Whether it is financial markets or the operation processes

[JustynaK]

The 100/0 of the 80/20; overuse of the good, ol' 80/20 rule.

[Julius Paras]

to clarify my previous comment, i mean the employee performance review, as a common U.S. company mgmt practice.

[Julius Paras]

Please include the corporate performance review on your list of dumbest U.S. practices.

[Bonnie Marie]

Stifling creativity and promoting and continuing the "yes" syndrome within the organization.