B.O.W. (Based on what?)

At a meeting of a number of related organisations a question came up about what effect a recent change in legislation would have on the number of people wanting to contest matters in court.

• one group believed that it would make no difference because, based on their experience, most people didn't realise that the law hadn't always been as under the changed legislation.
• one group didn't care since it had no impact on them.
• one group stated that they hadn't collected any figures that would lead them to a reasonable estimate

And then the CEO of a fourth group spoke up and said "Another 20,000 cases a year".

The question you would need to ask is "Based on what?". While any of the other three organisations could be considered to have taken a somewhat reasonable position, conjuring a figure out of thin air doesn't seem very reasonable. What makes it even less reasonable was that the types of cases that were likely to be affected by the change in the law only accounted for about 10% of those going to court and the total going to court numbered less than 20,000 per year in total. So the CEO of the fourth organisation was surmising a ten-fold increase in the number of those kinds of cases going to court, from 2,000 to 20,000.

When you see things like that happening, you have to wonder how they came up with the figure and why they felt obliged to come up with any figure at all, especially in an area in which they were clearly unfamiliar.

In some organisation you see this happening all the time. A CEO tells employees that business is going to double in the next 2-3 years, based on a naive confidence that a business that they supply is going to meet its growth targets even though the other business has consistently failed to meet its targets in the past and even though there is likely to be a change in owners within a year.

There are times when you need to articulate your assumptions and then make a realistic estimate as to how likely it is that those assumptions hold true. Once you spell them out in black-and-white then it becomes clearer whether what you suppose to be the case is based on anything at all, whether it is based on shaky assumptions or wishful thinking. And when assumptions are surfaced, you can provide the opportunity for other people to question them and possibly gain new information of which you were previously unaware. This in turn can shape a re-estimate of how things are likely to turn out.

However, if you fail to bring assumptions into the light of day where they can be questioned, if you fail to ask yourself "Based on what?" then you are setting yourself and your organisation up for failure. You may invest resources where they are not needed and raise the costs of your business without any corresponding gain. And you may lose the confidence of employees as to whether you have sound judgement, if you repeatedly make claims which fail to materialise.

A similar question is: What makes you think that? I find this question useful when a colleague makes a judgement about someone else in my organisation, especially when the judgement surprises me. I want to know if there is something useful my colleague knows that I don't. What I tend to find is a mixture of fact and interpretation and when I make a few tentative interpretations of my own I begin to draw out the information on which their judgment is based, whether it comes from a credible source and whether the judgment is reasonable or whether there may be a more charitable interpretation. In some cases, I can add things that I know that shed light on the situation, so that we both emerge with greater clarity.

The lesson here is that judgments don't exist in a vacuum. They are underpinned by:

• biases,
• blindspots
• assumptions,
• interpretations 
• limited knowledge
• ignorance
• failure to effectively use the knowledge you do have
• believing something which is in fact not true
• not adequately weighting the reliability of different information sources
• believing a situation is stable but which is actually in a state of flux (or vice versa)
• overconfidence in your own infallibility.

When you are surprised that something didn't pan out the way you expected it is a signal to re-evaluate your assumptions and to learn how you went wrong. The situation may have changed in a way that could not have been predicted. But equally, it could have changed in a way that was foreseeable given the facts you had at your disposal. It is an opportunity to learn about your particular weaknesses in judgement so that you can correct them or so at least in future you can ask yourself: "Am I making the same mistake again? What am I missing?".

At least then a momentary failure can sow the seeds of better judgments in the future.

How favoritism undermines businesses

If you run your own business then it is in your interests to get the best person for the job and to promote people based on the value they add to your business. However, if you choose to do otherwise, such as hiring and promoting your friends or relatives or people you like, then ultimately that is your choice: it's your money and if you lose out as a result of your decision then that is your prerogative.

However, if you are a manager in a government organisation or a publicly traded company, then basing decisions on factors other than what the person adds to the business effectively means that you are stealing from the "owners" (i.e. taxpayers or shareholders). In effect, you would be deliberately creating a sub-optimal outcome for reasons that have nothing to do with the success of the business, aiming instead to benefit your "favourites".

And this effect doesn't just stop at sub-par work being performed by your favorites. Let's look at some of these consequences.

Firstly, you undermine confidence in the competence of those so favoured. Generally, the feeling among employees who see what is happening is that if the favourites were all that good then they would be able to compete on their own merits. So the fact that they had to be given the opportunity rather than earn it suggests that they are less competent than others who might have competed for the opportunity. It also suggests that the person playing favourites is aware of this and has deliberately short-circuited any competitive process for that very reason. In some ways being the favorite is a double-edged sword: on the one hand you are being given the benefit of an opportunity, but on the other hand, even if you would have won the opportunity on merit in a competitive process, your reputation as competent in your own right is being undermined. And that can have consequences later on if your "protector" leaves the business or is moved elsewhere within the business.

Secondly, the person loses the confidence of the workers. If they are prepared to act with so little integrity in this matter then what else may they be doing? Can they be trusted? Who may they be undermining behind the scenes without that persons knowledge? Where there is a lack of transparency, workers may fill in the blanks themselves and draw their own conclusions, tinged with a justifiable paranoia.

Thirdly, such favoritism demotivates other workers: if promotion is based on being the boss's favourite then what is the point in doing a good job? Or, they may continue to do a good job just so that they get a good recommendation when they apply for jobs in other, fairer organisations.

Fourthly, it undermines co-operation within the workplace. You can end up with an environment were people do the least they can do without getting fired and where change is a struggle because disaffected workers withdraw their participation in change measures. Where rewards are not based on merit, passive resistance becomes the strategy of choice.

Finally, you fail to recognise and fully deploy the skills and knowledge of other employees who may have a greater claim to the opportunities on offer.

In summary, if you are a manager working in a business you don't own, then by playing favourites you are not only failing to act with fairness or integrity but aren't even earning your own salary since you are sowing the seeds of problems and dissension within the business instead of moving it optimally in the direction of its objectives.

I've painted a pretty grim picture. But unfortunately it is a reality in many organisations today when managers get it into their heads that they are in charge of their own little fiefdoms and lose sight of why they were hired in the first place.