“I have seen great ideas wither and die because companies tell themselves lies that are ingrained in their corporate makeup, and thus they fail to fix problems,” Davis states. “This is why one of the biggest barriers to optimizing a company’s profitability is not external (unless the market strategy is extremely flawed). It is the culture of the company.”
So what are these lies?
#1: ‘‘We’re so much better than the competition, we don’t have to worry.”
#2: ‘‘Our profits are so good they can’t be improved.”
#3: ‘‘Our business model is as good as it can possibly be.”
#4: ‘‘Our pricing model can’t be improved—besides, we’re charging the maximum we can get.”
#5: ‘‘Our cost structure is the optimum it can be under the circumstances.”
#6: ‘‘Our organization is so good that I (the CEO) don’t have to be involved on a daily basis.”
#7: ‘‘Our organization is at its optimal level.”
#8: ‘‘Complacency is not a problem in my company.”
#9: ‘‘Fraud is not a problem in my company.”
#10: ‘‘My bank loves me.”
Davis expands on each of the 10 points in the AMA e-newsletter issue. He concludes by stating that an effective leader must continually review his decisions. One thing that he does is to take a few quiet moments at the end of each day to be introspective and ask himself if his actions truly reflect the principles of management that he espouses, or if he has lapsed because of inertia or other distractions. Davis says that the key to good management is the ability to be self-critical enough to admit mistakes and correct emerging problems.
Aligning principles with actions and admitting mistakes is all about creating a culture of trust. By opening up to what is true, managers and leaders can both succeed in enhancing the bottom line and create a vision for the highest good. As Freud said, “In small matters, trust the mind; in large ones, trust the heart.”