• Print
  • Decrease text size
  • Reset text size
  • Larger text size
07/07/2016

The organizational Myth: fact check your sources before making the next business decision

So-called organizational ‘myths’ often roam around in organizations. They consist of information that is either (partly) false, incomplete, biased, or a combination of these issues. Besides being annoying for managers, organizational myths can easily become an organizational threat when they form the content that steers business decisions [1,2]. Doing fact-based analysis can prevent organizations from being misguided by false or incomplete information. Sia Partners acknowledges this threat by helping companies with fact checking organizational myths. This article explains how myths impact your business decisions, and describes in-depth how we helped one of our clients with eliminating them.

The organizational myth

Ever bothered with having to take a business decision based on information of questionable quality? If so, you are not the only one. As described by a number of studies [3,4], organizational decision makers often have to deal with a range of many different sources such as a contradicting documentation, opinions and assumptions of co-workers, or simply stories of which the origin is no longer known. Sources may be outdated, not in the right format to be analysed, or simply based on only qualitative or quantitative information, thereby not showing the full picture. As the quality of information is key to taking the right steps in the organization, working with organizational myths may get you into trouble. Naturally, decisions based on false information may be wrong decisions that could negatively affect the organization’s progress. This risk has been described by a number of studies [2,5] and is two-fold.

In some cases the quality of used sources may not be known, or is assumed to be alright. This is problematic when deciding on for example a new strategic line of action. Organizations that deal with myths unknowingly are relatively most at risk and find it difficult to control their results. Therefore it is key to always assess whether the involved stakeholders, used analyses, or timeframe are accurate and correct. However, in other instances the information is known to be limited or is questioned. This poses a different range of problems. When information is found to be limited or ambiguous, stakeholders often  ‘cherry-pick’ from the available information when it works in their favor [5]. This could fire up office politics and result in a biased dialogue directing the outcome of the decision at hand. In other cases, stakeholders resort to making assumptions about missing pieces of information. The latter is found to be problematic when it comes to quantifying these assumptions, [6] or can impede organizational change efforts because of the accompanied sense of uncertainty felt by employees [7].
 

6-Credit-Myths-That-Just-Wont-Die

How to discover the organizational myth

Revealing organizational myths should not be a dreadful and time consuming process. This is why Sia Partners based its ‘Myth Discovery approach’ on the ‘Agile Delivery management’ philosophy. This allows for a short lead time and provides the necessary flexibility throughout the analysis. To give you an idea of how this is taken into practice, we will discuss the case of one of our clients.

Client context

Our client in the energy industry was failing to meet the target of one of their major KPI’s for a few successive years. The general impression was that the trend of this KPI (the average power outage measured in minutes) was increasing every year, thereby negatively exceeding its target more and more. Stories, assumptions and documentation was roaming around on why the organization was not able to reach its target. However, for most of these sources it wasn’t clear whether they contained truthful and comprehensive information, and if they were supported by facts. The company wanted to decide whether to raise the KPI target, or whether to start with targeted interventions in order to lower the results of the KPI. However, the decision making process was blurred by many different versions of the truth.

Sia Partners Myth Discovery approach

After establishing the scope and research question of the project, Sia Partners identified which myths were present in the organization. The identified myths were translated into hypotheses. Together with specialists from the client, the hypotheses were defined that most likely influenced the rising KPI. These were prioritized in a backlog that would be used for the first series of analyses: ‘Sprint 1’.  Moreover, a corresponding analysis method was selected per hypothesis. After the necessary data was consolidated and cleaned, the first set of prioritized hypotheses were tested during Sprint 1. As can be seen in figure 1, the approach consisted of multiple iterative cycles. This provided us with the flexibility of reassessing our prioritization after each sprint on one hand, while quickly establishing results on the other hand. Through this effective approach the project’s lead-time was limited to only three months in total. 

Visual Newsletter HMU

Outcomes

The results of the analyses showed a fluctuating rather than a linear trend for the KPI of our client. It was confirmed however that the KPI trend had been above the target for power outages for the past years. Three of the biggest contributors to this high KPI level were identified in detail (e.g. the office locations with the highest and lowest impact). At the same time many other hypotheses were discarded based on the outcomes of the data analysis (e.g. organizational capacity had no impact).

The outcomes of the analyses created a transparent foundation for the organization to discuss the target setting, as well as for the actions to be taken. Based on the study’s outcomes, our client established a new method for defining the KPI target for power outages. Moreover, the organization was able to select a number of targeted interventions aimed at eliminating the root causes for not achieving their KPI.

Turn your organization’s myths into facts

Our case example clearly shows the benefits of doing fact-based analysis before making organizational decisions. So now you can see for yourself. What was the last time you made an important business decision? Did you have all the information you needed in order to make an informed decision? Was the information transparent and free from bias or office politics? Let the numbers do the talking next time and base your business decisions on fact based analysis. The shorter lead time of these projects will enable you to take quick and targeted actions. So don’t take one version of the truth for an answer and fact-check your sources before deciding on the next step.

Sources

[1] Gorla, N., Somers, T. M. & Wong, B. (2000). Organizational impact of system quality, information quality, and service quality. Journal of Startegic Information Systems, 1-22. doi:10.1016/j.jsis.2010.05.001

[2] Ravichandran, T. & Rai, A. (1999). Total quality management in information systems development: Key constructs and relationships. Journal of Management Information Systems, 119 – 155. doi: 10.1080/07421222.1999.11518259

[3] Weick, K. E. (1987). Organizational Culture as a Source of High Reliability. California Management Review, 29(2), 112 – 127. doi: 10.2307/41165243

[4] Weick, K. E. (1995). Sensemaking in organizations. Thousand Oaks, CA: Sage.    

[5] O’Reilly, C. A. (1983). The use of information in organizational decision making: A model and some propositions. Research in Organizational Behavior, 5, 103 – 139.

[6] Meehl, P. E. (1978). Theoretical risks and tabular asterisks: Sir Karl, Sir Ronald, and the slow progress of soft psychology. Journal of Counseling and Clinical Psychology, 46, 806-834.

[7] Rivero, O. (2013). Rumors in the Workplace Affecting Organizational Change Readiness. Global Journal of Management and Business Research Administration and Management, 13(12), 50 – 53.

 

Copyright © 2015 Sia Partners . Any use of this material without specific permission of Sia Partners is strictly prohibited

0 comment
Post a comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Image CAPTCHA
Enter the characters shown in the image.
Back to Top