Beware of Cargo Cult Management

Cargo Cults

During World War II, Melanesian islanders were astonished when the Japanese and American militaries arrived with vast quantities of supplies of all sorts, delivered by plane and parachute drop. These supplies found their way into the local economy where they transformed expectations.

So when the war ended and the supply drops stopped, many island groups decided they could make the ‘cargo’ flow again by imitating as accurately as possible the rituals that had allowed the foreigners to create that cornucopia of new and amazing things. They built airplanes out of the materials to hand, they carved headphones from wood and coconut shells and sat someone in a ‘control tower’ adorned with wooden aerials, and they marched and drilled with wooden rifles.

These were the ‘Cargo Cults’. Sadly, it didn’t work.

Much of what passes for management advice is based on the same idea. These are the key rituals; follow these and you will be a success!

You have seen the articles and books:

• Seven vital skills for innovation!
• Ten mistakes you must avoid!
• Three things the best companies focus on!
• …

The internet is awash with this sort of stuff, and even august and respected academics, who you would think should know better, present their work in this simplistic way.

Copying from the Best

And there is a good reason for it. We, the audience, like it.

We like to think that there is a simple and comprehensible answer to our problems. Do this and you will be OK.

We like lists with small numbers of easily understood actions.

We like to think that if we copy the leaders, the magic will rub off on us too.

It is easy to explain and to justify – Why did you take this action? Because some of the most successful companies in the world do the same!

The problem is, copying blindly from admired companies tends not to work for all sorts of good reasons.

Your goals and circumstances may be completely different to that admired company. The ideas you pick up from others should fit your strategic objectives, your business context and your business culture and values.

3M is a famously innovative company, and also famously has a rule that 30% of sales in any division must come from products launched in the last four years. During a visit to one of their research centres a few years ago I was shown how this leads to the rapid spread of new ideas and capabilities throughout the company, as every division is permanently on the look-out for new products. It was an impressive and powerful story.

I have also seen other companies try to copy this by instituting a similar rule, and then fail. It works for 3M because of their history, their corporate vision, strategy and culture, the type of people they hire, their processes and procedures. It doesn’t work for most other companies because they are not 3M.

That is why I am personally very suspicious of ‘best practice’. I can understand ‘good practice’, that might be useful if applied judiciously to your specific situation, but ‘best’ implies that there is a best answer, and one that applies to every type of business at every stage of development.

Having suffered through three separate attempts to put in place a customer relationship management system (CRM) because it was ‘best practice’, I can testify that ‘best practice’ does not work for everyone. The diagnosis was correct that we did not know enough about our customers, who was contacting them and what we were learning, but in each case insufficient attention was given to the way things actually worked in those organisations.

The ability of a workforce to ignore or sabotage a new system or process that does not help them do their job should never be underestimated. There is an old rule of thumb in knowledge management that says a new system or process needs to offer people at least twice as much benefit as the additional effort incurred. Otherwise it won’t be accepted.

Grafting additional tools and approaches on top of a system that is not delivering looks like action, but unless it is properly integrated with every other part of the business it is just falling into the cargo cult trap.

Simplifying Complexity Makes Matters Worse

One of the best analyses of what leads to cargo cult management is found in Phil Rosenzweig’s book “The Halo Effect”. He says the search for simple actionable ideas leads to nine specific delusions. For me the most important are:

• The Halo Effect – if a company has the reputation of being successful, then we believe it is good at everything it does.
• The Delusion of Correlation and Causality – just because a process or behaviour is found in a successful company it doesn’t mean that it was responsible for the success.
• The Delusion of Simple Explanations – success is unlikely to be due to a specific process or behaviour, because business success is complicated and involves many interacting factors.
• The Delusion of Connecting the Winning Dots – look at a group of successful companies and you might see some shared approaches, but that does not mean that those approaches were the drivers of success. Back to causality.

Rosenzweig traces a lot of the problems back to the fact that much of the data about what successful companies do is self-reported or gathered by interviews with managers. This leads straight back to the halo effect. If you ask people why their business is successful they will give you an answer, and probably a fairly simple one, but the truth is they don’t know which of the huge number of interacting factors is important. They can only guess.

This is not an argument to ignore all this material completely. There are many excellent concepts, tools and processes discussed that might help you to reach your strategic objectives. But use them intelligently. Don’t get sucked into someone’s version of the one true path, and don’t assume that because some other business claims that it worked for them that it will for you.

Be clear about your strategic objectives, know the context of your business, and the values and principles of the people you work with. Then think hard about which ideas might be useful, and how they could work in your business. Be particularly careful to look for knock-on effects and unintended consequences.

And don’t make the mistake of thinking that what I have written here is the only way!