by Douglas Ross
I wrote this fun but revealing look at what I call the business whack-a-mole approach to managing. I hope you enjoy it . It sets the stage to look at companies that take the path of most resistance to resolving systemic issues.
It is very simple. The world is complex and moving fast. The demands are challenging and the consequences immediate. Unravel the challenges and the world is your oyster. Surrender to the challenges and the world swallows you. The path of least resistance leads to surrender while the path of most resistance offers the world.
Although this applies anywhere, let us look at the challenges of world of business today.
• Investors, legislators, regulators, analysts, and others are demanding higher levels of governance, accountability, and transparency.
• The global marketplace is demanding higher quality and lower prices, with better levels of customer service.
• Employees expect safer working conditions and look for improved benefits, especially in health care.
• Consumers demand satisfaction and walk the talk with their buying decisions.
• Employee talent forgoes loyalty for opportunity.
• Corporate reputations and brand values are under attack by off shore competitors who will leverage any weakness in competitive positioning.
• In addition businesses are feeling the effect of the increases in health care costs, employee retention, and the rising impact of fines, and penalties.
These are systemic issues that are impacting in some way or another virtually every business in America. Some organizations are dealing successfully with them, while some are not. What follows is a sad but true and slightly exaggerated scenario of some who take the path of least resistance to resolve systemic issues.
The path of least resistance is the simple way out of problems. Unfortunately the simple way out often leads back into the problem.
The simple way breaks systemic challenges into a series of separate and discrete short term actions where the guiding assumption of survival, especially in a downturn is to maximize profits and reduce costs. According to this paradigm, when overall volume drops and profits are affected, equal and deeper cost cutting must occur to ensure financial viability. Although true, this is a simplistic version of truth.
The reality of the path of least resistance is that it is simple, easy and immediate. It struck me that the reality of the path of least resistance was much like my daughter- in- law playing the whack-a-mole game at Chuck-E- Cheese.
In this game, you try to hit, with a rubber mallet, moles that randomly pop up in front of you on a game board. Every time you get a hit, you get a point while every time the mole retreats, you loose the opportunity forever-or at least until the mole shows its head again before the game ends.
It is fun. You experience a high as you release pent up energy whacking the moles. The challenge of not knowing where the mole is coming from adds to the excitement. At the end of the game, you receive a series of ticket rewards which you can redeem for some trinket.
In business, I know some managers who play the same kind of game with challenges. As each challenge presents itself, they hit it hard and fast with the hammer of their position or knowledge. Slam, they get that one. Slam they got another one.
They are so good at it, that when employees can’t react quickly enough to challenges, they step in and do it for them. I even know some employees who deliberately escalate problems to involve the manager in joint games of whack-a-mole.
Each and every day the people play this game at work. It requires lightning quick decision making in a fast moving political game of the survival of the fittest. Some find it is exhausting but fun. Others are disheartened and frustrated that day in and day out they are forced to play whack-a-mole while they know that the systemic challenges are begging for a resolution.
Whether they are frustrated or happy with their job, these business managers go home, every night, knowing that their job remains intact because they have successfully whacked enough organizational problems to stay for another day.
Let’s extend this fun game to a more serious scenario. Take for example, a company that receives information from the industry analysts that forecasts a severe downturn in the next two quarters. This comes during the first half where the expected recovery did not occur. The managers in this company know the reality of what the investor’s expectations are and they begin to whack the moles.
With revenues dropping, the immediate response is to reduce costs, so that profits margins will not be affected. Whack, programs and perceived non- valued costs are cut. Whack, whack, cost centers are restructured and ingenious accounting practices evoked. Whack, departments are restructured. Finally, whack, whack, positions and people are eliminated.
The whack-a-mole strategy works and the monthly statements show no impact on profits. Even though revenue has dipped, costs have been reduced more significantly and the investors remain confident that their management team will survive the drought. But the real systemic challenges remain unsolved.
The organization has demonstrated that it more concerned with looking good than with being good. No one asks why the programs and non- value added cost were there in the first place. No one asks why departments weren’t restructured before or why the positions and people were not dealt with before.
Einstein said you can’t solve a problem with the same mindset that created it. The decision making and problem solving that created the problem is now solving the problem.
Perhaps even more importantly, is how will the company come out of the downturn. Good companies come out of the drought stronger, smarter, leaner, and hungrier to survive and prosper in the new competitive environment. Some investors undoubtedly are looking at this capability in the governance of the organization. Their philosophy of investing would include an assessment of the business intelligence and grit shown in tough times.
Getting back to whack-a-mole problem solving, soon enough the exhilaration of cost cutting, firings and restructuring gives way to the day to day reality of getting products out the door. The impact of the organizational inability to resolve systemic problems begins to drive up the costs.
The size, complexity and number of issues increase as cost cutting measures in maintenance, quality, human resources and engineering weave their way into existing unresolved productivity, people and process problems.
The value stream moles begin to appear as bigger and more dangerous challenges. Only this time, the organization has less to deal with more. The pressure to hit targets increases.
But this time the whacking the mole strategy doesn’t work as well. Downtime increases, scrap and rework increase, productivity drops, customer delivery problems escalate. Overtime costs increase. Material costs increase as expedited parts become part of daily operations. The quick fix and band aid approach to problem solving can’t contain the challenge.
On a side note, I actually listened to a manager who complained that his company had exceeded the local airport’s ability to supply enough fuel for airplanes handling expedited parts.
The situation worsens. Chaos reigns and moral wanes under the increasingly impossible demands of meeting the challenges of survival. More firings occur, more cost cuts. Blame and politics dominate the organization. This is what we call the death spiral.
It will get a whole lot worse before it get better, if it gets better. The easy way out has led back in.
Yet it does not have to be that way. People know the right way to do business-always have and always will. Organizations such as the one above have simply got lost in their own stories.
It only takes one person to stop and say we can’t do it this way any more. The rest have to have the courage to face the reality.
This is called integrity and it is a better way.