Business Exposed130
mean that this is what caused their success. Importantly, trying
to replicate these symptoms of success may actually prevent you
from attaining it.
Eating Uncle Ed – don’t worry, it’s called downsizing
Allow me to tell you another story in a similar vein (although
perhaps you may want to skip this bit if you tend to visualize
what you read). About a century ago, the Fore people, who
inhabited Papua New Guinea, had the habit of burying their
deceased relatives, just like many other societies. Yet, one sunny
day, Uncle Ed died, at around lunch-time. Uncle Ed’s relatives
were about to put him into the ground when one of his cousins
(who looked particularly hungry) said, “Why bury all that good
meat? It’s a waste; we might as well eat it.” And so they did.
When, the following month, another relative died, they did the
same thing, and soon, the whole village was eating their deceased
relatives, rather than putting them into the ground. The advan-
1316
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Myths in management
tages were obvious; there had actually been quite a bit of famine
and malnutrition among the Fore people and this habit enabled
them simply to not be so hungry.
Some time later, a visitor from a neighboring village witnessed
the practice. When he got home and his cousin died, he
quickly convinced his relatives to, rather than bury the good
chap, consume him on the spot. Gradually the practice started
spreading to all villages in the tribe, until the habit of eating
deceased relatives had become the norm and the Fore’s proud
tradition.
Yet, unfortunately, they ate everything, including their relatives’
brains. As a consequence, they developed a horrible, lethal
disease called Kuru (which is related to Creutzfeld–Jacob, a.k.a.
mad cow disease). The disease has quite a long incubation
time (i.e., it takes several years before it becomes apparent) but
eventually the Fore people started getting sick and dying en
masse. Of course, they noticed something was seriously wrong
but, due to the disease’s long incubation time, had no idea that
their misery was caused by the habit of eating their deceased.
The practice continued until half of the Fore population had
been wiped out and Australian invaders put an end to it (because
they thought it was gross, not because they understood it caused
the disease).
Why am I telling you this story – after all, you might be reading
this just before lunch? The reason is as follows: many managers
and companies remind me of the Fore people. Let me explain:
the Fore’s practice clearly was detrimental; after all, it was
killing them! Yet, the reason for them adopting it was clear too:
the practice gave them an immediate advantage, namely less
hunger and less starvation. In the long run, however, they were
denitely worse off for doing it, but the problem was that, due to
the practice’s incubation time, they could not understand it was
this habit they had picked up many years ago that was causing
the problems.
Quite a few popular management practices have the same charac-
teristics. The problems they cause only occur in the long run and
Business Exposed132
are therefore underestimated or not understood at all, but the
benets are immediate.
Take, for example, the practice of “downsizing” (or rational-
izing, restructuring, reorganizing, etc.: that is, making people
redundant). It is a trend that has now been going on for at
least a decade and a half; companies – even if they are not in
nancial difculties – engage in systematic programs to reduce
the headcount in their organizations. The short-term benets
are clear: it leads to lower costs (sometimes accompanied by a
positive response from the stock market to the announcement
of the program). Yet, there is also evidence of sizeable long-term
detrimental inuences, such as reduced innovation and lower
employee commitment and loyalty. However, such consequences
are only noticeable in the long run.
Usually, when a rm faces a serious problem, for example due to
a lack of new products in the pipeline, top management does not
realize that the lack of innovation is caused by the downsizing
program they engaged in a decade ago. Just as it did for the
Fore people and their illness, the long lead-time makes it all but
impossible for managers to connect and understand cause and
effect. Thus, not only will top management take inappropriate
action to solve the problem (often another cost-cutting program
. . .), but it also remains unclear to other rms that downsizing is
harmful, leading them to adopt and continue the practice too.
Cause and effect are often a tricky thing in the world of business.
When a certain management practice gives us immediate benets,
we are inclined to assume it must be a good one. However, the
presence of short-term benets does not mean that the overall,
long-term consequences are all that healthy! Yet, when they
nally materialize, we don’t quite grasp that
the practice has caused them. In the world of
business, it is often hard to gain an understanding
of the long-term consequences of our decisions.
Yet, you do want to make sure you really think
through the consequences, because before you
know it, you have eaten Uncle Ed.
‘‘
Cause and
effect are often
a tricky thing
in the world of
business.
’’
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