SUCCESS: AN INVISIBLE DEATH TRAP

If you based your evaluation of Enron Corporation on its results anytime before 2001, you’d have to surmise that they must be doing everything right. From 1990 to 1998, Enron’s stock rose 311%. In 1999, the stock rose 56% and 87% in 2000. Of course, we know how things ended for Enron in the fall of 2001. Enron would make one of the largest falls from corporate grace and its brilliant leaders would be behind bars. While the Enron case is a classic, its message is still powerfully relevant today.

This article isn’t for the failed projects that don’t get off the ground. This is a beacon call for the people and organizations that still can be saved. I’m talking about the people and organizations that are experiencing success that is fooling them into thinking they’ve earned it. In our minds, we’d like to think there is justice and fairness in the world. With this assumption, the good companies win and the bad companies lose.

If you’re reading this, you’re likely succumbing to the gravitational pull toward result orientation. If you’re having success, for example, you’re likely assuming it’s because your behavior has earned it.

Life is far too complicated for such a piece of mythology like this to ring true. The truer belief would say something more like, “the good companies win and the bad companies lose eventually.” Given infinite time these things get sorted. Options trader and modern philosopher, Nassim Taleb, reminds us of the Ego leveling power of time when he said, “In probability, volatility and time are the same.” In the meantime, however, perfectly good companies can experience downturns while perfectly horrible companies can have success. The key is in carefully separating those acute results from the evaluation of the system.

WHY DOES THIS CONUNDRUM EXIST?

The explanation for this has actually been explained thoroughly by humans for thousands of years. The idea of managing the uncertainty of the world was first understood by the great Stoic philosophers. Their insights have been echoed by thousands of thinkers since. It’s our emotional nature, however, that either keeps us from hearing it or compels us to forget.

First and foremost, humans are mean making beings. We don’t like disorder. Part of our evolution has been seeing patterns and using story telling to survive. Where this fails us is when this tendency to connect the dots leads us assume causation where things may only be lightly correlated. If you landed heads on a hundred coin tosses in a row, you might mistakenly think you’ve got a talent for it.

Secondarily, we live in an uncertain world. The complexity of our life on Earth is cemented by the variables at play in any given instant. Objectively speaking we can take any desired outcome and admit that only some of the variables that would affect this outcome are in our control. This presupposes that there are some variables that are not in our control. This objectively proves that our outcomes are not directly in our full control. This gap of control is the spice of life, or the frustration of it.

Considering that there are always elements in our control (most notably our processes) and there are always elements outside of our control (most notably the results), we must admit that our processes are not directly tethered to our results. This means results (both positive and negative) can be mutually exclusive from processes that are both effective and ineffective.

THE CHALLENGE THIS POSES

The pain of failure does a great job of driving behavior change. We don’t like how failure feels, so we hunt better practices for better outcomes. The joy of success doesn’t provide the same motivation. Positive outcomes (or success), then, can dissuade us from looking into potentially critically ineffective processes right under our noses just because the weather is fair.

Based on the uncertainty of our world, it’s possible to experience a string of successes despite faulty practices behind the scenes. This creates a house of cards-type environment. Things are great… right up until they aren’t.

Consider another classic catastrophe in result orientation: the early tycoons of the railroad industry. At the height of the railroad industry, the results would indicate that not only have these authorities in transportation earned their success but also that they’re strategies are hitting the bull’s-eye. There’s faulty assumption that they were in the railroad business instead of the transportation business quickly undermined their power as the industry leader when automobiles and planes better answered the consumers need to get from Point A to Point B.

WHAT CAN WE DO ABOUT IT?

It’s simple. To understand performance would mean understanding that the ways to maximize the chances for positive outcomes would be a relentless commitment to the processes that support those outcomes. Since great processes can yield acute failures and poor processes can yield acute success, the high performing individuals and teams soon realize that the only sane approach, then, is to be relentless about process.

There are two beautiful outcomes when you create a process-oriented culture:

1. People can fail and still experience praise. After all, it’s possible to master one’s process including their preparation, effort, and attitude and still experience failure. Any human being would like to give this kind of effort, fail, and still be safe inside their group.
2. The front-runner mentality that things are happy and great with the group is winning and things are dark and scary when the group is failing goes away. A process-oriented group can experience victory and defeat and still be curious about how to do it better.

The only logical framework to adopt once you understand the basic arithmetic of performance is a process-oriented one. This means that while you cannot guarantee a positive outcome (no one can), the priority in getting such an outcome is found in mastering the process.

This creates a clear path to adopting best practices and evaluating performances better. The San Diego Padres, for example, have built their own internal framework for evaluating a hitter’s performance that is much more process-oriented then the tradition result oriented “batting average”. Given the variables outside of the hitters control from the speed and location of the pitches they receive to the umpires ruling and positioning of the players, the Padres have built a framework that rewards a hitter’s ability to maximize the effectiveness of their process over the results that are largely our of their control. In this framework, then, it’s possible to be awarded a quality at-bat in situations that would be marked as a failure under a statistic like batting average. For example, a hitter can hit a ball hard, get out, and be awarded a quality at bat.

Ask yourself the following questions in the framework of your organization. Is it possible to measure a job well done separate of the results of a given performance? What process-oriented statistics guide your feedback? What result-oriented statistics guide your feedback? Is this creating a front-runner culture?