The Counsel of Desirable Outcomes: Actions versus Achievements

The bane of most, perhaps all, how-to books in management and business is what I call the “Counsel of Desirable Outcomes” – advice that sounds like action but really consists of achievements. Take a recent article in the Financial Times entitled “Five steps to sustainable productivity growth”. Written by two management consultants from PwC, it defines “five concrete steps you can take to create policies that will drive your productivity growth”. The five steps are:

  1. Determine how good you are at sustaining productivity growth
  2. Specify productivity improvement in innovation and growth plans
  3. Simulate productivity growth scenarios and their impact on objectives and measures
  4. Create a shared company business design with an operational path to short, medium, and long-term productivity growth
  5. Align on a more comprehensive, simplified set of productivity measures

What can one say about this advice? On the surface it’s difficult to quarrel with it: Is it clear? Well it seems to be clear. The root metaphor is that of taking steps along a path. If the creation of sustainable productivity in an organization is like that, then it’s a promising start. Is it actionable? Well every step starts with a verb and verbs have to do with action…But wait! On closer inspection each verb is really an achievement rather than an action – it says “create this desirable outcome”. What we are looking at is outputs of many different, complex processes designed to look like inputs to a single, linear process.

Actions versus Achievements

The English philosopher Gilbert Ryle made a distinction between what he called task or action verbs and achievement or success verbs. Kick and hunt are task verbs (they refer to doing something); score and find are their achievement counterparts (they refer to goals, desirable outcomes). Achievement verbs work just fine as guides to action when one understands cause-and-effect very well. In the Do-It-Yourself world of the handyman we have learned (through practice) what hammers and screwdrivers are, what nails and screws can do and we know the medium we are working in – plastic, wood, concrete, metal and so on. We can select our tools and materials based on the job that needs to be done. So the instruction, “Fasten the plastic wall plate to the switch box using the screws provided”, is crystal clear and actionable by any handyman.

When it comes to creating “sustainable productivity growth” in large human organizations we understand cause-and-effect hardly at all. It’s not a linear process and the tools and materials are poorly defined. Certainly policies don’t “drive” productivity growth in the same way that a screwdriver “drives” a screw. In addition, the actions that produce sustainable productivity improvements in one business may not produce any improvements in another business, even if they are in the same industry! I can remember when a conglomerate acquired our steel wholesale distribution business. The parent company placed huge emphasis on metrics of all kinds and seized upon our “PAR” reports, where we and our competitors reported our operating ratios to a central service. They analyzed them for everyone and showed the distribution of the results by quartiles. Our Return on Net Assets (RONA) was in the upper quartile, largely because of the speed with which we turned our assets over, but our transportation costs were in the lower quartile i.e. higher than the average. Our parent company demanded to know why our transportation costs were so high. It turned out that they were high because in our geographic situation it made sense to minimize inventory in many items by keeping central stocks and trucking them out to the customers as required. This pushed up trucking costs but paid off in faster inventory turn. In other geographies the opposite policy made sense – minimize trucking costs and keep small inventories at every branch. If fuel prices changed, of course, the logic might change. This is a very simple example but it shows how the meaning of productivity can vary from one business to another, even within the same industry as well as from one period to another.

What to Do

So what is to be done? I think that we have to restrict our consumption of  “how-to” books in management and business to situations where the tools and materials and cause-and-effect relationships are well understood. In situations where cause-and-effect is not well understood we need mental models for the participants to understand them. These models will not assume away the problem by representing complex problems as resolvable by linear stepwise processes. One needs to examine the underlying metaphors and analogies closely to see the assumption they contain about the processes being discussed. As readers of this blog know, I favour a nonlinear ecological model that is simple enough to understand without assuming away the complexities of the wicked problems that we face. I don’t think it’s helpful to counsel desirable outcomes.

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