Veteran, new and aspiring executives need methods to be successful in their organization. There are 1000s of leadership podcasts, videos, blogs, and articles but few authors address what to do or how to do it.
We have witnessed many executives who are efficient (doing things right), but few executives are effective (doing the right things). We believe this is misguided and aim to remedy the shortfall with executives.
Mind Your Noodles – Episode 78
Two Errors in Organizations
Playing It Safe
Ways to Mitigate Risk
4. Recording Your Decisions
5. Have a Method
Tripp Babbitt: [00:00:08] This is the seventy eighth episode of the Mind Your Noodles podcast, and this week I’m going to talk about one thing, one thing that executives fear.
Tripp Babbitt: [00:00:19] If we look back over time, we see a lot of small entrepreneurial organizations that have gained advantage over these large behemoth type of organizations. We look at Amazon now challenging Wal-Mart, and they started from an idea and then Jeff Bezos mind for Amazon. It was we ought to put this stuff online and sell it out to the world because it’s easier to get to. And it’s this type of thinking in these small entrepreneurial organizations that gives them a huge advantage from an innovation standpoint. And then you consider, on the other hand, having worked with multiple large organizations, what happens is, is they become protectors of wealth. They are risk averse types of organizations. And if you ever watch the National Football League, you’re going to find that at the end of games, you’ll see defenses changing. And one thing you learn about prevent defense is that it prevents you from winning. And we’ve heard this adage many times in a in a sports sense. So safety rules the day. But organizations don’t learn by doing something they already know. They learn from failure.
Tripp Babbitt: [00:02:00] And I think Russell Ackoff really put this in to good simple terms. He referenced something called Errors of Commission, which is doing something that shouldn’t have been done versus errors of omission, which is not doing something that should have been done.
Tripp Babbitt: [00:02:23] And it’s the second one that really becomes the problem for organizations, these errors of omission. And I can think back in time when I worked with an industrial distributor in operations and I remember talking to an executive of a company called Sterrett and they made measuring tools. And one of the things that this executive told me about a particular measuring tool that was being done digitally by a company called Military out of Japan, and he said, this is a fad, this will go away. Well, digital measuring tools never went away and expanded. And it was that type of thinking that really put this Sterrett measuring company in dire straits because Mediterraneo was growing exponentially here in the United States and a US based manufacturer was stuck back in thinking from 30 years prior. So this is these are errors of omission and these are lost opportunities for organizations. So what do most executives fear? Well, it’s risk and they try to eliminate it rather than embrace it. And there’s a certain mindset associated with an a verse type of mentality in larger organizations. And again, it’s all about this kind of protect defense type of thinking. So by virtue of them failing to innovate, you know, you you I mean, let’s face it. Yeah, it’s too risky. Behavior in an organization is going to get you in trouble as not only an executive in an organization, but it also may compromise the organization by doing it, by looking at innovation.
Tripp Babbitt: [00:04:37] And so what ends up happening is everybody plays it safe in the organization. Humans are risk averse to begin with. This comes from neuroscience. We know that our brains don’t like risk and they don’t like bad outcomes. And when you get a bad outcome, your brain says, don’t do that again. And. This is something that we have to fight, especially in these large organizations, because the entrepreneurial ones say, what do I have to lose? So executives whose job it is to look to the future need to consider these errors of omission. What are they missing by not doing something?
Tripp Babbitt: [00:05:25] And I think there are important ways to mitigate the risk that every executive should look to.
Tripp Babbitt: [00:05:32] And the first one that the place to start is with looking at their purpose. And I’ve already talked about in previous videos with regards to how do you generate a purpose? Well, our analytical thinking is how we are generating purpose, where we need synthetic thinking or looking at the whole of an organization in order to consider what the purpose of that organization is.
Tripp Babbitt: [00:06:00] The second thing that you need to consider then is the scale of things. So in other words, there is a certain thinking that if we do things to do something, it’s there’s a sense of finality in our thinking. It’s OK. We made the decision and we’re going to go out and implement this huge decision. And in large organizations, I see that happen more often than not. And it’s a huge failure and things blow up and people get fired. And it’s usually not the executives, but people below. But even though the executives made the decision. But they need to understand that they don’t need to do these things for the most part. Rarely do you have to do them on a on a large scale that these things can be done on a very small scale and mitigate some of that risk.
Tripp Babbitt: [00:07:03] Now, we just talked about the third thing, which is finality of a decision. In other words, people make the decision and they move forward on it and they don’t go back to it. They don’t consider what. Pivot that they need to make or change that needs to be made on the run, they just kind of make the decision they put aside and they move on to something else.
Tripp Babbitt: [00:07:28] And so this leads to the fourth thing is that we need to begin to record. There’s no there’s there’s really even in large organizations, there’s rarely this knowledge on major decisions where somebody is keeping a record of here’s what we did and here’s what the outcome was that that we we got from making this decision. And what went in to the decision in the first place, what assumptions were made of those types of things are rarely recorded. And and what I see over and over again is someone come back that maybe been in the company 20 years after a new CEO or new executive team comes in and says, you know, we we did this, you know, before now there may be changes, but if there’s no record of what you’ve done, you’re relying on kind of hearsay in your organization. So recording and learning as an organization can certainly help you. I don’t understand why organizations don’t record these things. It’s almost comical when when I go into an organization and look at some of the things that they’re doing, that they’re just making these decisions, moving on. Nobody knows what happened before. And it’s almost like we’re constantly relearning to reinvent the wheel over and over again. So you can’t advance yourself unless you’re recording some of this stuff. Is is the bottom line.
Tripp Babbitt: [00:09:01] Then the fifth thing, you need a method for all this stuff. You can’t you know, if you don’t have a method, if you don’t have a method to learn and create your purpose, understand that all decisions aren’t final and how you come across making the assumptions that you should do things on a small scale.
Tripp Babbitt: [00:09:24] All of these are factors that need to be associated with mitigating risk. And method is certainly one of them. And I, I probably talk in the future and I can talk about it too much now. But decisions are made emotionally and when you make emotional decisions, it’s kind of like you don’t want anybody challenging it, especially if it’s made by somebody high up in the organization. Because, you know, I made the decision. Now let’s move on. And everybody lives in fear of that particular decision. So all of these are things that I’m building in my online executive education program. And the first step you need to mitigate risk is understand your organization from a synthetic standpoint, meaning how looking at the whole of your organization. And I wouldn’t even try and attempt to write a purpose until I understand that you need to understand how that organization works and then you need to understand how that organization plays in society as a whole or in its industry as a whole and a number of other systems that it’s interacting with.
Tripp Babbitt: [00:10:37] And this will help you understand where you sit as an organization and in broader systems, and you’ll be able to make deeper, better types of decisions associated with moving your organization forward. So consider risk that there that there are these errors of omission that that you’re missing opportunity. And that is a bigger problem than errors of commission where you’re doing something that shouldn’t have been done. So as an executive, that’s your role, is you’ve got to put yourself out there, but you’ve got to have a method.
Tripp Babbitt: [00:11:21] You’ve got to have a way to go about mitigating the risk as much as possible. But there’s always going to be some risk. And just sitting back and hoping that some of this competitor won’t come along and innovate and destroy what you already have, I don’t think is a very good strategy for organizations. Talk to you next week.
Tripp Babbitt: [00:11:49] Hi, I’m Tripp Babbitt. You can now download. Effective executive starter kit, it’s free at the95method.com/starter kit.