These last few years I have been mystified as to why the adoption rate of proven and valuable managerial methods and techniques are taking so long to be applied in organizations. Examples are business analytics, the balanced scorecard, and activity-based costing.
These last few years I have been mystified as to why the adoption rate of proven and valuable managerial methods and techniques are taking so long to be applied in organizations. Examples are business analytics, the balanced scorecard, and activity-based costing. Organizations that use them proclaim improved performance and better decision making. There is even empirical evidence in terms of financial results from Dr. David Norton, co-author with Professor Robert S. Kaplan of the Balanced Scorecard book series, that companies that have implemented their methods achieve superior results compared to their competitors.
My unscientific research has revealed explanations including:
• Insufficient or poor quality data.
• Misperceptions that the techniques are too complex.
• Initial failures with prior pilot projects.
• Human nature’s resistance to change.
• Not wanting to be held accountable.
• Not wanting to be measured (or measured without involvement selecting the measures).
• Fear of knowing the truth.
• Lack of executive sponsorship or a willing and passionate champion.
Note that solving the last few “excuses” deals with behavior modification and change management. A problem is none of us have been trained in change management. We are typically specialists.
Related to this, I have recently read some disturbing research of psychology. It deals with why people actually hang on stronger to their ideas even after they learn their ideas are proven wrong. The research was conducted by two faculty members, David Gal and Derek Rucker, of Northwestern University’s Kellogg School of Management. Using tests with a control group, they revealed that the more that people doubt their own beliefs, then paradoxically the more they are inclined to support and lobby for them. Their research paper’s title “When in Doubt, Shout” (Psychological Research; November, 2010) summarizes their research findings. The test subjects who were confronted with evidence that challenged and disproved their beliefs subsequently advocated them even more aggressively compared to the control group.
This both bothers me and confirms some of my own observations. I often attempt to persuade managers and executives that applying fact-based quantitative statistics and logical methodologies is far superior than making decisions based on intuition and gut feel or than using inappropriate key performance indicators (KPIs) or flawed and misleading cost allocation methods. Too often, I get stone-walled or told about the obstacles I listed above. How can we transform a “Dr. No” into a “Dr. Know”?
I can accept resistance to change and judgment up to a point. But maybe there is pride of ownership (and perhaps some ego) that explains why, despite strong business cases for adopting the methods I described, managers and executives remain hesitant to march forward. Wouldn’t they like to gain insights or know something about the future before their organization gets there? How valuable should it be to them to know things that their competitors do not know? Perhaps Gal and Rucker’s research gives a clue.
