The Hidden Logic Of Business Performance

The Hidden Logic of Business Performance

Decoding the Patterns that Drive Results

Companies facing challenges of all kinds almost always assume that the "explicit rules" - strategy, policy, procedures, processes, organizations, regulations, reward systems - collectively govern business performance. They use these formal mechanisms to change the company's strategic direction and manage its business operations. For example, if you want to change behavior, you tinker with the reward system; if you want to increase efficiency, you redesign a process; if you choose to compete differently, you refine your product/market strategy.

In reality, it's not that simple. Just as there is no powerful drug that can be administered to human beings without inevitable side effects, the same is true for the management levers in a corporation:  adjusting one can have unintended and often counterproductive, side-effects elsewhere. In both cases, you need to take a holistic perspective. All aspects of the business model come together in one point - the minds of people - and manifest themselves in group behavior. To get to the root of what is really going on, you need to decode the rationale that underpins group behavior and, ultimately, business performance.

The Hidden Logic approach to managing change saves time, money, energy, and other resources by enabling companies to avoid backtracking or repeating implementation attempts.
 

• Construct a realistic picture of the environment for change before launching a change initiative. Hidden Logic analysis provides a detailed picture of misalignments, reveals where future problems are likely to arise, and allows preventive action to be taken. Armed with an accurate understanding of what is driving an organization's performance, companies can take steps to tackle the causes rather than symptoms of misalignment in the business model.
   
  
• Dig deep to find the real sources of misalignments. The future of the organization is driven by logic that is often hidden deep beneath the surface - in the legacy of the company; the tenure of its people; past responses and current calls to change; the experience, motivations, and relationships of employees and leaders; and the formal and informal recognition and reward systems.
   
  
• Tailor your initiatives to the reality of how the organization operates - rather than the impressions that leaders and others may perceive. While leaders may have a clear perception of what is going on in their organizations, these perceptions often differ markedly from those of the people in the body of the organization.  
  

This report explains how to employ the Hidden Logic process, together with examples of how an organization can address the obstacles to change that are inherent in it, but below the surface.