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Management by Folklore

StorybookBob is the only person in the company that knows why the firm uses doohickeys. He remembers the day the change was made. The old thing wasn’t working; doohickeys were the answer.

Sally is the only person in the company who deals with Customer X, the firm’s biggest customer. She landed the account and knows all about their entire experience with the firm.

Jane was with the company when Policy Z was instituted. She remembers the employee who prompted this new policy. Of course, that employee is now long gone.

Lately the firm has experienced some serious challenges. It’s so serious, the entrepreneur founder isn’t sure the company is going to make it.

A new thing
The company was the first in its industry to use doohickeys. When Bob decided to implement the change, the company quickly gained a competitive advantage. Unfortunately, a new thing has come along. It’s better than doohickeys. Anytime anyone suggests the new thing, Bob goes on a passionate discourse about the importance of doohickeys to the firm.

A lost customer
Sally got sick. Collectively, the rest of the people in the company didn’t know as much about the customer as Sally did individually. The customer quickly expressed dissatisfaction. They said Sally gave them better service. It wasn’t long before the customer took their business elsewhere.  

Different people
Jane was fully behind implementing Policy Z. The change was really an overreaction to a single employee. It affected the whole work force. The people who work for the company today are different than the people who worked there back then. Things have changed. But the policy hasn’t changed to reflect it.  

Management by folklore
BIGG success is about entrepreneuring your life and your business. Many entrepreneurs resist systems.

So they default to managing by folklore.

Information isn’t documented and archived so people can access it. It’s all in somebody’s brain. The trick is finding that somebody.

To get the answer to a simple question, you have to bounce around from person to person. The old timers in the company know who knows. The new people waste time trying to find out who it is and then by having to track them down.

In addition to its inefficiency, there are at least three problems with management by folklore:

1. People get trapped in the fairy tale. They come to defend the indefensible.

2. People go away for one reason or another. When they leave, critical information walks out the door with them.

3. Things change – opportunities, markets, customers, people, environments and more. When folklore is allowed to rule, people often view things as static instead of dynamic. And subjectivity trumps objectivity instead of the other way around.

What problems have you encountered with management by folklore? 

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