Despite all of mankind’s technological progress, some patterns seem rooted in human behavior. One of these is the tendency to grab for short-term gains and ignore the longer-term consequences, even when those are almost entirely predictable.
This attitude has been illustrated this week by the announcement from the Ford Motor Company of still more lay-offs, plant closures, and buy-outs of workers’ contracts. For years, Ford’s cars have been becoming less popular; so much so that Ford has been losing heavily on the operation of its car divisions. You would think this would be something the management would have made a high priority and tackled long before firms like Toyota and Hyundai could establish strong positions in the US market. However, there was some tempting, low-hanging fruit, in the shape of truck and SUV sales, that seems to have distracted management with the promise of strong, short-term profits, even while they more or less ignored the clear but long-term issue of how to make Ford cars competitive again.
With management asleep at the wheel, its eyes fixed on the massive profits Ford made on sales of trucks and SUVs, no one considered what might occur if anything happened to those cash cows. Along comes a huge increase in gas prices in the United States. Now Ford’s gas-guzzlers no longer seem attractive to consumers and sales plummet. What had been merely a problem—how to counter Toyota’s rise to market-leader in cars—now became a crisis. Hence the panic measures to cut costs and dump non-performing assets, while Ford shareholders have to absorb the news that there will be no dividend and the company is unlikely to return to profitability before 2009, if then.
Of course, some people love a crisis, mostly because it gives them an immediate “high” of excitement. I wrote about such “Adrenaline Junkies” earlier this week: people who live their whole lives in a state of permanent crisis, even creating them if they don’t arrive naturally. The post produced an extremely perceptive comment from one reader, who pointed out the following paradox. If you exercise foresight to deal with a problem before it becomes pressing, people see what you have done as obvious. If you wait until the problem reaches crisis proportions, then step in to solve it, you are a hero. So if you want to be noticed, the answer is to avoid using foresight or planning to head off any long-term consequences, at least openly. Wait until people feel real pain, then step in as their savior.
Short-termism isn’t the only source of today’s rapidly advancing folly. Another is the fashion for setting objectives based on statistics instead of understanding. In “Occam’s Razor”, I pointed out that a good part of the overwork and pressure that infects business today comes from people either collecting data to satisfy this organizational mania for measurement, or facing objectives that have been produced by statistically illiterate bosses. To deal with it, I proposed “Carmine Coyote’s Cutthroat”—a maxim that reads: “Do not invent unnecessary measurements and statistics to manage anything.” I don’t know whether it will catch on, but it would save people from a great deal of heartache and anxiety if it did.
By the end of the week, my concern with human folly, especially among otherwise intelligent leaders, shifted to the manipulation inherent in today’s macho styles of management. In “Integrity Versus Manipulation,” I tried to draw attention to the fact that many of the management fads and fashionable techniques around today are thinly-disguised ways of manipulating people to do what is probably not in their best interests. Macho management is highly manipulative; alternately brutal and bullying, or full of appeals to heroic sentiments, but always about getting people to work harder and faster to benefit others—mostly the executives of the business and the shareholders.
Folly seems to be firmly in control today in many boardrooms. By a combination of quick fixes, short-termism, and “management by numbers,” executives ignore the obvious long-term consequences of their actions and focus only on short-term wins—even as they risk wrecking the company by doing so. In reality, leaders have ethical duties as well as financial ones, and many management decisions are as much moral as economic. It’s time to slow down, allow reason to replace emotions and adrenaline-fueled hyperactivity, and start facing up to the consequences of foolish decisions at every level.
- Short-term Myopia
- The Dangerous Myth of the Heroic Leader
- Business Fundamentalism, One-track Minds and Magic Bullets
- The Lure of Quick (and Seductive) Solutions
- The Quick Fix: Today’s Black Art
- Corporate Athletics
Adrian Savage is a writer, an Englishman, and a retired business executive, in that order. He lives in Tucson, Arizona. You can read his posts at Slow Leadership, the site for everyone who wants to build a civilized place to work and bring back the taste, zest and satisfaction to leadership.