Germ Theory of Management, Joe Girard, Systems ThinkingI am going to keep it short and sweet today. I want to talk about the “germ theory” of management. A term I first read about in a book called Avoiding Man Made Chaos by Don Wheeler. It’s funny because the book is all about statistics and variation, but the way he illustrates a common problem in management today really hits home.

Excuse me Doctor, does this look infected?

Did you know that as recently as 150 years ago, doctors didn’t know that there were such things as germs? They worked on patient after patient the best ways they knew how and just accepted infection as a normal part of healing.  When they sutured up a wound, they left a little of the silken thread out of the opening for the pus to drain out.  Yah, gross.

“Medicine has been ‘successfully’ practised without the knowledge of germs. In a pre-germ theory paradigm, some patients got better, some got worse and some stayed the same; in each case, some rationale could be used to explain the outcome..”

At some point, a small group of people (researchers, doctors, change agents) discovered that there was more going on below the surface than they originally thought and began the discussions on germs.  They would present at medical conferences and try to persuade doctors to wash their hands and sterilize their instruments.  And what do you think those doctors said?

We don’t have time to wash our hands or sterilize our instruments. We are too busy treating patients.

And in fact, the doctors of the time did everything they could to try and make life hard for these change agents.  They tried publicly humiliating them, criticized them professionally, and overall were just plain mean.  The mindset was one of “This is just how we have always done it before…”

Is your business unhealthy?

Does that sound familiar in business today?  Are sales and marketing people “successfully” practicing their skills?  Are we doing the same thing every day whereby sometimes revenues go up and costs go down, sometimes they don’t, and sometimes they stay same? But in every case, we can find a way to find a rationale and explain the outcome.

We just can’t predict the outcome.

How many times do you hear people say they are too busy?  How often to professionals say, “This is just how we’ve always done it?” Or “That’s policy.”  With the changing nature of business today, you must be fully aware that what worked yesterday, most likely will not work tomorrow.  And if you haven’t learned and adapted recently, you are vastly prepared for a world that no longer exists.

Take the time and read more about the germ theory in this article.  It goes into much more depth about the theory itself.

Today our managers do the same. When they are up against tough international competition, they look to changes in economic policy, in tax structure, in trade policy – everywhere except in their own understanding of what makes a company competitive. They question everything except their own theory of management.

Cost accounting is a perfect example of a germ.  When you manage your profits and strategy from a cost accounting standpoint, you fundamentally miss the point of cashflow.  If you have more capacity in your business to sell into, your job is to get cash, not control margins.  But the more accountants get involved in decision making, the more we see this happening, and the more businesses try and grow by controlling costs.  I know this is a complicated statement, and I will go more into this in another post, but think about how you make decisions about growth.

As a professional, when you dismiss new ideas or refuse to look at what the data tells you, you are essentially like a Doctor who doesn’t wash their hands.  You are creating infection in your business and letting germs grow.  Then you have to create a bunch of “policies” and processes to account for the problems that get created.  After that, process stacks on process until eventually you have a system that is completely unhealthy.  You end up treating the symptoms rather than the root cause.

In business, you must build a solid foundation before you can build a tall structure.   


Take back control

So if your business, finance, health, or relationships are not where you want them to be, take some time and look at them a bit deeper.  Look for the “germs” that perhaps you are not seeing.  Find the time to wash your hands and sterilize your equipment before you try that next tactic.

If you are spinning your wheels day in, day out, and can’t quite seem to get traction, perhaps it’s time to ask for help.  Get a fresh set of eyes on what you’re doing or you will continue to add more and more to your plate and be working on the wrong stuff.  Your business and life should not control you, but you should take control of it.  There is no reason to continuously work harder and harder.  And when you identify the germs, you take back control.

Glad I could gross you out a bit, and I would love to hear your comments on this idea.

Joe Girard
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