Okay, this example just lays the problem bare. And it’s hilarious.
So, in 1947, this psycgist Ross Stagner asks a number of managers to take a personality test.
The managers take it and submit their responses.
Post the test, Stagner, instead of responding with feedback based on their actual individual answers, presents each of them with the same generic feedback that has no relation to their test answers.
He then asks the managers how accurate the assessment was. And more than half describe the assessment as accurate, and almost none describe it as wrong!
And then in 1948, there’s another psychologist called Forer who tries a similar experiment with 39 of his students. And post the test, he sends them all the same generic personality assessment without even seeing their test results. And it looks something like this:
1) You have a great need for other people to like and admire you.
2) You have a tendency to be critical of yourself.
3) You have a great deal of unused capacity which you have not turned to your advantage.
4) While you have some personality weaknesses, you are generally able to compensate for them.
5) Your sexual adjustment has presented problems for you.
6) Disciplined and self-controlled outside, you tend to be worrisome and insecure inside.
7) At times you have serious doubts as to whether you have made the right decision or done the right thing.
8) You prefer a certain amount of change and variety and become dissatisfied when hemmed in by restrictions and limitations.
9) You pride yourself as an independent thinker and do not accept others' statements without satisfactory proof.
10) You have found it unwise to be too frank in revealing yourself to others.
11) At times you are extroverted, affable, sociable, while at other times you are introverted, wary, reserved.
12) Some of your aspirations tend to be pretty unrealistic.
13) Security is one of your major goals in life.
On average, the students rate its accuracy as 4.30 on a scale of 0 (very poor) to 5 (excellent).
All for a generic personality assessment taken out of a newsstand astrology book that contained statements that were vague and general to apply to most people.
And this, friends, is called the Barnum Effect or the Forer Effect:
A common psychological phenomenon whereby individuals give high accuracy ratings to descriptions of their personality that supposedly are tailored specifically to them, yet which are in fact vague and general enough to apply to a wide range of people.
It’s the equivalent of an astrology horoscope, basically.
Now, my question to you is: Is your mission, vision, and strategy falling prey to the Barnum Effect?
Is it completely generic, uses highfalutin buzzwords, and ends up meaning nothing when it comes to real-world actions?
Does it sound like,
“We shall be driven by our commitment to customer satisfaction.”
“We shall provide world class products and services by consistently meeting customer's expectations, quality and on-time delivery.”
If it does, then you need some course correction.
But why are these statements so bad, you ask?
Well, which company in the world doesn’t want to be committed to its customers? Do any companies that are not committed to their customers, survive?
And which company doesn’t aim to build “world-class products and services by consistently meeting customer's expectations, quality and on-time delivery?”
You can apply these statements to any company and they would still fit.
They don’t inform you about how exactly you act to make this happen.
They don’t tell you what to prioritize and what trade-offs to make.
They don’t tell you what to SACRIFICE, even if it comes at a big cost.
That’s what makes them bad strategies.
More generally, if the opposite of your strategy isn’t being followed by one of your competitors, and none of them would even think about following it because it would be just stupid to do that, then your strategy doesn’t have any zing.
It’s generic, and it’s useless. It may sound nice and visionary, though!
Essentially, a generic strategy statement means that you have failed to identify the true nature of the problem you’re trying to solve.
On the other hand, If the opposite isn’t stupid, is just as viable, and your competitor is doing the opposite (or something very different), then your strategy has the promise of being distinctive — an outcome of having an insight into what the real problem is.
Strategy is not some mystical vision that only people at the top understand.
Its purpose is to inform each of the many thousands of things that get done in an organization every day — right from its salespeople to its engineers.
If your employees do not understand how you’re supposed to be really different from the competition and how the company is creating value that is differentiated from its rivals, then how can they align their actions with the strategy? And how can they make trade-offs on the ground?
If “customer first” is your entire strategy, and you make sure you drill it down to every single employee on every tier of the organisation, does it mean that they will choose to refund customers instantly if something goes wrong with their order and not try to put the company’s financial interests first?
If it doesn’t mean that, then saying “customer first” doesn’t mean anything.
Strategy requires sacrifice. It requires tradeoffs. And most importantly, it requires eliminating a lot of things you will NOT DO.
To summarize, here’s Shreyas putting it in a tweet:
Check your team’s strategy statement today, and write back to me with thoughts around what you think about it:
Does it fall prey to the Barnum Effect?
Or is it punchy and distinctive enough and clearly makes the trade-offs and priorities stand out and obvious?
Let me know.