Humility and Business Plans: Never the Twain Shall Meet

Tom Peters

“Do everything right, all the time, and the child will prosper. It’s as simple as that, except for fate, luck, heredity, chance, the astrological sign under which the child was born, his order of birth, his first encounter with evil, the girl who jilts him in spite of his excellent qualities, the war that is being fought when he is a young man, the drugs he may try once or too many times, the friends he makes, how he scores on tests, how well he endures kidding about his shortcomings, how ambitious he becomes, how far he falls behind, circumstantial evidence, ironic perspective, danger when it is least expected, difficulty in triumphing over circumstance, people with hidden agendas, and animals with rabies.”

The quote is from Ann Beattie’s latest novel, Picturing Will. It speaks directly to an increasingly important corporate issue—the peril of overestimating our ability to influence outcomes. In short, the way we recruit, organize, plan, and act very much depends on how much we feel that we are in control. The problem is ageless, though as the world becomes less predictable the consequences of personal or corporate hubris are increasingly severe.

Systematically review a stack of annual reports. Without fail, a good year is explained as “the fruits of the strategic planning process your management put in place five (three, seven) years ago.” A bad year, however, is invariably the result of “the unanticipated rise in interest rates (unexpected foreign competition, etc.) which upset our planning assumptions.” But our corporate chiefs are hardly alone. A sizable branch of psychology, called attribution theory, examines the way human beings explain events to themselves. In short, we attribute good outcomes to skill and hard work; bad ones to bad luck.

For centuries, Cartesian cause and effect thinking has dominated our science—and management—paradigms. The causeless, effectless, probabilistic world of quantum mechanics that informs today’s scientific thought has still not permeated our psyches—or our approach to making corporate strategy.

Consider the implications of characteristic corporate hubris on innovation. A close examination makes most of our books on new-product planning laughable. The truth is that success or failure at most innovation, small or large, new product or new training course or new accounting routine, is largely determined by luck.

First comes the uncertainty that surrounds a new technology. Will it work? Can it be made commercial? What kind of reaction will it cause among old, dominant technologies (which almost always stage a dramatic comeback when a new threat surfaces)? Next stir in the uncertainty associated with product or service use. The “wrong” set of customers are usually the first to adopt a new product, for the “wrong” reasons; and diffusion of the most “obvious” new ideas almost always takes several times longer than anticipated and follows the most circuitous path imaginable.

Then there is the link between seller and buyer—the distribution channel. Again, the unanticipated—e.g., “wrong” channel, “wrong” time—is the only thing you can count on. But we’re not finished: New competitors often small and unnoticed and from totally different industries routinely upset your best laid plans. Top it off with the biggest fudge factor of all—generic uncertainty (wars, pestilence, interest rates, oil prices, etc.)

Take these factors and, as you must, multiply them together. Suddenly the odds on your well-planned pet project diminish to the vanishing point. Does all this mean that you must walk through the world fearful and hunched over—weighed down by the awareness of your minuscule ability to make any difference in your child’s life or corporate results?

To the contrary. If you are appropriately humbled by uncertainty, then the antidote is almost obvious—do something. The humbled executive lightens up on planning and instead cheers interesting tries including those that fail miserably. She or he decries centralization and control and becomes instead a decentralization fanatic, an empowerment nut, and a supporter of sky-high spending authority for business units. She or he grows wary of the dress for success crowd and, instead, seeks out, hires and nurtures mavericks with enough gumption to stick with woolly ideas whose time just may come, if the champion is absurdly committed.

The chief without hubris steals ideas (legally) from anyone and anywhere, craves success in the tiniest markets (rather than placing the one big bet on the over-planned project), works in loose association with numerous outsiders—and in general attempts to blunt the NIH (Not Invented Here) syndrome.

This humble belief in riotous life as it is, rather than as it appears in the tidy, four-volume strategy document, hardly means waiting passively for lady luck to show up on your doorstep. Rather, you work to enhance your odds by constructing as many doorsteps as possible, and fret as little as possible when she passes most by.

If you countenance this line of argument, life becomes infinitely richer. Released from the false burden of thinking that you’re in control, you will get more at bats, try more zany things, laugh more and enjoy the trip more even if you don’t get lucky.

(C)1990 TPG Communications.

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