False Positives

Posted by: in Corporate and Strategy, executive insights, gary grates, Human Resources, Thought Leadership, w20 group on October 10, 2012

One of the most concerning business trends today is the increasing number of misleading facts or data that triggers the wrong managerial reaction.

Case in point: a large multi-national company conducts an all-employee survey and reports better-than-expected results even amid a year of layoffs, management changes and competitive pressures. Leadership feels confident in their approach and changes nothing. Within three months, several key executives leave, the union stages a walk- out, the stock plummets and key new product introductions are delayed.

What happened? The results documented in the survey were not accurate. Employees, knowing the future is uncertain if not shaky, chose to answer questions positively fearing for their jobs. Leadership, lacking curiosity and knowing the results went against what they were seeing daily in the workplace ignored reality.

The effect: a major talent drain within six months, delayed programs, and reduced revenue and share targets.

Case in Point: Sales of a new product are growing and both Marketing and Communications believe it is the result of their respective efforts.

As such, they each ask for additional funding to support the product citing the growing sales numbers. Both groups receive more money for programming just as sales begin to fall off.

What happened? The early spike in sales was actually caused by three other factors: an initial underpricing by sales to spur usage; a belief in the product’s claims that turned out to be less than promoted; and a movement away from another of the company’s products, which had not been predicted.

The additional monies spent on programming that actually did not influence sales were wasted and, worse, the product was pulled for further development while the cannibalized product suffered further sales erosion. In a nutshell, a major mess!

Case in Point: Feedback from a CEO Town Hall is very positive. The CEO and CCO are very pleased and walk away with the belief that both the venue and the CEO’s time are appropriate and well-spent.

Reality Check: Four months later the CEO is removed by the Board for “failure to deliver results based on an inability to engage both employees and investors in the company’s strategy and direction.”

What happened? Well, in this example, many things, but pointing back to the Town Hall meeting as a key indicator of trouble to come, two very key mistakes were made.

First, the venue and style of the meeting limited real interaction and feedback. It was all one-way with pre- screened “softball” questions conditioning employees to behave like audience members at a Broadway play – respectful and reactive.

Second, the critique itself did not probe for real knowledge extraction from the session – that is, what was the headline? Key thought? Additional questions that needed to be addressed by a manager or supervisor?

Instead it asked whether people were comfortable with the venue, could they read the slides, and did they feel the information was relevant and useful (without asking what the actual information was). Anyone paying attention would have seen that the CEO did not have an authentic relationship with the workforce and the messaging being used was neither relevant nor interesting to the workforce.

With the tsunami known as Big Data upon us, we must – as strategists and business leaders – constantly probe deeper and deeper to discern the true cause of events, constantly looking for gaps or trends. We cannot let pure data lead directly to action any more than we can allow a GPS system on our computers to substitute for actually driving to a destination to determine if it was the right route, mileage and time.

Human behavior is a delicate animal that rarely follows a linear or logical path.

Accepting initial thinking or data on most areas impacting the organization without further investigation is not only naive but dangerous!

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One Response

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  1. Ed said

    Human behavior rarely follows a linear or logical path…because human behavior is guided most often by emotion. People — employees, neighbors, students, family members — respond to something that connects with emotion. That’s why humans remember and respond to stories, not data. When determining what we want our audience to Think, Feel, and Do, remember that behavior change depends on “Feel.”

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