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Is Your Strategy (or Business) Failing?

I had dinner last week with a friend who runs a company that is on the verge of bankruptcy. The reason couldn't have been more obvious to me--his company is selling a product people don't want because technology has changed and customers no longer see his offering as valuable.

His company is staffed to deliver exactly what they're delivering now. He thinks it's a problem of price and the motivation of salespeople. He's responding by lowering prices, incentivizing his sales team, and buying more online ads. Not surprisingly, his actions are moving the company closer to death.

I call this the "dumb ass syndrome"--not understanding why you're successful or unsuccessful. The dumb ass syndrome affects a majority of people and companies at any point. But it is easy to cure, provided you have courage -- and you are willing to take these six simple (and tough) steps.

1. Recognize how common the dumb ass syndrome is in the world of business. An executive with an airline recently told me his company is doing well because the airline goes out of its way to serve the customer. Nope. The customers often don't have a choice, and many would go with a competitor who offered the same route at the same price.

An executive in a small company told me that he's trusted because he really listens to people. Dead wrong. He's despised by most people because they think he pretends to listen as a way to trying to manipulate them. He's still in his job because his boss--the CEO--is too busy with other issues to replace him, and really doesn't care about what he does.

A division of a large company is blaming the downturn on sales on the market. Which is curious, because their competitor is having their best year ever.

2. Ask yourself the question: "Do you know-really know-why you are getting the results you're getting?" The most common answer is "yes, I know." This is also the worst answer, because it blinds you to other possible causes. The best answer to the question is: "I think I know, but need to learn a lot more before I'm sure."

3. Do the opposite of what comes natural. It's natural to think you're successful because of actions you took, and that you're unsuccessful becomes of circumstances. (This is one way of understanding the "fundamental attribution error.") Great leaders fight the impulse.

When my Tribal Leadership colleagues and I first reached out to Gordon Binder, to ask about the Amgen's success during his time as CEO, he responded: "Why do you want to talk to me? I didn't do anything." Only when we said: "But you could have stopped [what was happening]" he agreed he may have a small part to do with the company's transformation into the world's largest biotech company, at the time of his retirement in 2000.

Contrast Binder's approach with the many CEOs who boasted to us about how their visionary leadership, and natural charisma, made their companies so great. When their companies began to flame out, many told us that they were hampered by their boards, and so the failure really wasn't their fault.

4. Look for many causes. Nothing is more irritating than the news sound bites on why the stock market went up or down. "Down on profit taking." "Up on a positive jobs report." Millions of small decisions boiled down to a simple phrase.

Last week, I wrote a blog post that suggested timing is a reason for the democratic loss of the House. People were really upset that I suggested a something other than conventional wisdom. Read the comments. Most people can't deal with the fact that there are many causes to a single result. (And it was partially sarcastic--highlighting the fact that people want their preferred explanation--like "Obama is a commie"--to be the only reason for an event.)

Leaders need to examine not just the causes, but the relationships between the causes. I tell new leaders that the job should come with a Costco-sized bottle of Tylenol, because thinking about all these causes at the same time can cause a raging headache. Yes, I'm serious.

5. Run low-risk experiments to test your explanations. Think price is the main problem? Try lowering prices on a few products for a short period of time and measure the results. You might be surprised when demand may not change at all. Just for fun, try raising prices. Many service providers find such a move actually increases the perceived value of what they offer, and so demand increases.

6. Allow for the fact that most people are victims of the dumb ass syndrome. Great leaders get frustrated because most people can't deal with multiple causes, and instead, want to "stop all this nonsense and get to work." The hard part of leadership is dealing with people--including ourselves--and our inability to handle the headache that will cure the dumb ass syndrome.

Got examples of the dumb ass syndrome messing up companies and careers? I invite you to share them below.

Photo courtesy zigazou76, CC 2.0
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