Hunting Prehistoric Mastodons

I've always been curious why, in the face of increasing competitive pressure, some companies embrace lean while others just complain or turn a blind eye.  Companies like Danaher, Parker-Hannifin, Texas Nameplate, and others look inside to improve themselves and become competitive globally.  Other companies, and the organizations they support, spend all their time trying to get "competitive burdens" reduced, when the scale of those supposed burdens pale in comparison with their internal waste.  While they're spending years complaining, their overseas competitors are improving their internal processes, so pretty soon the complainers won't be able to compete even without those "burdens."

Perhaps a recent Time cover story on Why We Worry About the Things We Shouldn't... And Ignore the Things We Should gives us part of the answer.  While the article tries to explain why we worry about the remote possiblity of getting a mad cow or E. coli infection from lettuce instead of worrying about the tons of cholesterol-laden lard we consume by going to Taco Bell, there are some potential analogies to the competitive manufacturing environment.

We pride ourselves on being the only species that understands the concept of risk, yet we have a confounding habit of worrying about mere possibilities while ignoring probabilities, building barricades against perceived dangers while leaving ourselves exposed to real ones.

Maybe the species as a whole understands the concept of risk, but apparently the level of understanding varies greatly within the sub-population of managers.  Increasing competition from overseas companies is no longer a mere possibility, but a probability and in many cases a reality.

Part of the problem we have with evaluating risk, scientists say, is that we're moving through the modern world with what is, in many respects, a prehistoric brain.

Ahh... now that makes sense.  Perhaps the brains of some managers, at companies like GM and Ford for instance, are just more prehistoric than others?

He [neuroscience professor Joseph LeDoux] explains that the jumpiest part of the brain--of mouse and man--is the amygdala, a primitive, almond-shaped clump of tissue that sits just above the brainstem. When you spot potential danger--a stick in the grass that may be a snake, a shadow around a corner that could be a mugger--it's the amygdala that reacts the most dramatically, triggering the fight-or-flight reaction that pumps adrenaline and other hormones into your bloodstream.

So the composition of a leader's primitive amygdala determines whether he decides to fight the confront the competition or simply run away and complain.

If we're mindful of real dangers and flee when they arise, we're more likely to live long enough to pass on our genes. But evolutionary rewards also come to those who stand and fight, those willing to take risks--and even suffer injury--in pursuit of prey or a mate. Our ancestors hunted mastodons and stampeded buffalo, risking getting trampled for the possible payoff of meat and pelt.

So the companies that "flee"... complain but don't do anything real about it... may survive a bit longer than those simply stand still and get eaten alive.  But for true long-term survival you must confront the challenge... take risks, even suffer injury such as the short-term harm to the P&L or the loss of change-averse people often caused by lean programs... for the payoff of meat and pelt and market share and profitability.

These two impulses--to engage danger or run from it--are constantly at war and have left us with a well-tuned ability to evaluate the costs and payoffs of short-term risk, say Slovic and others. That, however, is not the kind we tend to face in contemporary society, where threats don't necessarily spring from behind a bush.  It's when the risk and the consequences of our response unfold more slowly, experts say, that our analytic system kicks in. This gives us plenty of opportunity to overthink--or underthink--the problem, and this is where we start to bollix things up.

Exactly.  We have an amazing ability to force problems into a short-term box, and then identify short-term solutions.  That's what ignoring, complaining, and trying to distort the reality of the market are all about.  Human, or at least cave man, nature thinks about short-term problems and short-term solutions.  It takes an enlightened... or evolved... leader to truly analyze a competitive situation and convert it into a long-term opportunity by capitalizing on improvements in internal efficiency.  It takes such an evolved leader to admit that their organization isn't already functioning at an optimum level, and then to do something about it.

Finally, and for many of us irresistibly, there's the irrational way we react to risky behavior that also confers some benefit. It would be a lot easier to acknowledge the perils of smoking cigarettes or eating too much ice cream if they weren't such pleasures. Drinking too much confers certain benefits too, as do risky sex, recreational drugs and uncounted other indulgences. This is especially true since, in most cases, the gratification is immediate and the penalty, if it comes at all, comes later. With enough time and enough temptation, we can talk ourselves into ignoring almost any long-term costs. "These things are fun or hip, even if they can be lethal," says Ropeik. "And that pleasure is a benefit we weigh."

That sounds like another reason why some company executives, and the politicians in their pockets, complain and try to change the external game.  There is a certain excitement and feeling of power by trying use political leverage to change global market realities.  Gratification can be immediate if the yuan is revalued, import barriers lifted, or export subsidies created.  The long-term consequences are ignored and the penalty comes later in the form of highly efficient overseas companies that no longer need artificial market distortions to compete globally. 

While the cave men complain, more evolved leaders at companies in the U.S. and overseas are creating highly competitive organizations.  It's pretty obvious who will succeed in the long term.

Comments

[G Pearson]

I now have a completely new visual for my boss! That knuckle-dragger!

[Mike Lombrosky]

Great post that in a humorous way really explains many of the realities manufacturers face. Your last couple of lines really say it all and point out the danger of being complacent. Unfortunately many CEOs especially of public companies only plan on being around for a few years after which they'll head to their retirement villa. Perhaps we need to base more compensation on true long term results - not a couple years, but ten or fifteen years down the road. That will also force them to create real leadership development and succession plans.
-Mike