Are You Sure You Want To Follow Today’s Executives?: Guest Post

Anyone who has tried to sell anything to corporations, and specifically the decision makers inside corporations, will appreciate the fallacy of proof. I remember some years back when I was working on a strategic project with a client in the UK who was looking at outsourcing a part of their operations worldwide. In a meeting with the COO of the company it was clear that leadership wanted to do this because of the perceived value, but implementation was going to be the biggest challenge to making it happen. To ensure success we embarked on a lengthy crusade to 'sell' the concept inside the company and win over the key stakeholders who would be impacted by this change.

What was interesting about this multi-country, multi-divisional sales pitch was the initial reactions of all the stakeholders. The Americans were concerned about the political correctness aspect. The Brits wanted guaranteed results. The Italians were only concerned about the effort required after the deal was done i.e. working less is okay, working more is not. And the Asians simply wanted to know how it would all work. Yet all constituents wanted to know whether we had done this before and who for. They were especially concerned about whether we had experience doing this for their competitors.

Here is the issue: no one had ever done this particular type of outsourcing. And hence where the value was. We had to work hard to explain why proof of having done this before was irrelevant. This really concerned the stakeholders and in the end, after months of work on both sides, they decided not to proceed.

We went on to implement similar programs at other companies and today, almost 7 years later, there are over 100 companies that have implemented similar programs successfully. There were learning curves and challenges to overcome, there is no doubt, and it wasn't always smooth sailing, but in the end the value these companies have realized far outweighs the risk they took in implementing the program. And many executives have been promoted and elevated in their organizations because of it.

The fallacy of proof continues to be a big blocker to progress and success in companies today. We have customers who have boldly implemented methodologies and technologies that have helped them realize increased efficiency, savings and increased margins. In a global economy that has seen slowed activity, the efficiency gains and savings have helped corporations post increased EPS and profitability. There are very real examples in the press in today's earnings releases where companies are missing sales numbers i.e. Apple, Goldman Sachs, but are exceeding EPS targets. These companies are doing things that their competitors aren't because they won't allow the fallacy of proof to get in the way.

And so I was really pleased when a good friend and ex-colleague of mine offered to share a post about whether you should follow today's Executives in your business. Liri Andersson and I worked at WPP together over 15 years ago. We were doing some pretty leading edge things at the time with our clients and she continues similar work today in London with her partner, Jonathan MacDonald, at this fluid world. If you or your organization is about innovation and results then check out their website and get in touch. Over to Liri...

Are you sure you want to follow today’s Executives?

by Liri Andersson

When at Uni i studied French in the same class as my brother. I desperately needed to pass a specific exam as failure meant me having to stay in Sweden repeating the exam rather than seeing my boyfriend in Dublin. My lovely brother offered to swap exam papers with me, ensuring me getting a pass. Not honest I know, but I so wanted to go to Ireland I did seriously consider it. At the end I handed in my own paper. A week later the results came back…I had passed and my brother had failed!

What does this have to do with business?

I spent most of last week in meetings trying to come up with new, or better ways of doing things, and in every one of those meetings someone, at some stage said….

“Can we find an example of someone who has already done this?”

It’s human to think that if it’s been done before it’s worth doing. It’s human to think that due to this the risk involved with doing it has been reduced. It’s also human to think that going in that direction is therefore validated.

Jonathan MacDonald, my business partner in this fluid world describes this very well in his blog ‘The fallacy of proof’, where he states ‘However, when some companies are trying to justify venturing into the unknown, the most comforting thing is to know that someone else has already tried it. Actually, that someone isn’t just anyone – it’s usually a competitor. A competitor can provide proof that something works or doesn’t, in the exact same context as you. If the signs are that something works, then somehow, proof is shown and a company feels assured it’s a safe area to venture in to’.

I could not agree with Jonathan more; ‘The Fallacy of Proof is a killer. It’s a killer to both innovation and improvement’.

But there is another problem with following another organisation when making strategic decisions, or decisions around innovation, and that’s the assumption that the company you’re observing has in fact done its homework, the assumption that they know what they’re doing, and that following them is therefore beneficial (like allowing you to pass an exam).

What would you say if I told you that in a recent McKinsey Quarterly survey of 2,207 executives, only 28 percent said that the quality of strategic decisions in their companies was generally good, a whopping 60 percent thought that bad decisions were about as frequent as good ones, and a meager 12 percent thought good decisions were altogether infrequent?

Let me break this down for you:
28% said quality of strategic decision good
60% said bad decisions were as frequent as good ones
12% said good decisions were infrequent

This means that if the answer to the question “Can we find an example of someone who has already done this?”, is yes, then we can also assume that there is a 72% chance that the quality of that strategic decision was bad!

I’m not a gambler but those do not seem like good odds to me!

So maybe you should continue to ask “Can we find an example of someone who has already done this?”, with one difference, if you can, run the hell away from whatever it is, because with executives like we have the pleasure of observing, it seem like following in their footsteps is the last thing we want to be doing!!!!

And you know what, doing it your way, following your instinct, not taking what you perceive as the easy way…may just buy you a hell of a ticket to somewhere you really want to be – I know it did for me.