system blindness

One of the big problems I see in organizations is that managers who want to improve productivity pull the wrong levers.

For example, one company I know of decided to improve performance by ranking everyone in the company from 1…n, and firing the bottom 10%. Not surprisingly (to me at least), performance didn’t get better. But the managers were surprised (when they noticed at all).

Individual performance is important, but it’s often not the primary lever to improve organizational performance–it’s the work system that needs improvement.

In the company that tried ranking to improve performance, there was no clear product direction, priorities shifted weekly, and teams where broken and reformed every few months. Improving any of those factors would have had a much bigger over all improvement effect than forced ranking and culling.

We like to believe that people succeed or fail by their own efforts. I don’t discount individual effort….but focusing only on individual effort blinds us to system effects.

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