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Why good systems go bad


One of the mysteries of management is why, every few years, we need to re-invent some system or process. If capable professionals spent a lot of time and energy building a competency model or performance management process or sales compensation scheme why is it that a few years later it feels so dysfunctional we need to rebuild it?

Several explanations have been proposed • The environment changes • Systems naturally degrade • We forget why the system was designed the way it was

The environment changes

The usual explanation for changing a system is that the environment has changed. That is not strictly true, the usual explanation given is that the people who designed it were idiots and we are much, much smarter. However, the usual public explanation is that the environment has changed. That the world has changed is often true, but it only accounts for a fraction of the changes that are made.

Systems naturally degrade

Systems can naturally degrade even if the environment remains stable. At Pixar they learned that they needed to frequently change up how they did “after action reviews” because if they kept it the same people would start giving formulaic answers. Sales commission schemes are always changing either because sales reps learn to game them or because management wants to keep the reps excited by offering something new. If we know that systems naturally degrade in a few years then perhaps we should not invest so much time building them. We tend to think the clever system we build will last for decades and hence deserves immense effort; sometimes that true, often it is not.

We forget why the system was designed the way it was

Any system you devise, no matter how well constructed, will have drawbacks. Imagine you have a system that keeps customers happy, fits the unique needs of the region, and integrates well with the accounting software but is a pain for the manufacturing department. Once the system is implemented problems that the system has solved become invisible, the only thing visible are the problems that remain. With the passage of time people forget the rationale behind the design, and decide to re-invent it. They solve the visible problems, at the expense of “unsolving” the invisible ones.

Forgetting the very good reasons we do something a certain way reminds me of a famous and misunderstood story about an experiment with monkeys. Apparently a group of monkeys were presented with bananas at the top of a ladder. Whenever they tried to climb the ladder they were sprayed with cold water. Soon they learned not to climb the ladder. When researchers replaced the monkeys one by one, the new ones, seeing how the others were afraid of the ladder did not dare climb it. Over time all the monkeys had been changed and the experimenters stopped operating the hose. Even though no monkey had ever personally had a bad experience or even seen anyone have a bad experience with the ladder, they still did not get the bananas.

This story is always told to illustrate how stupid it is to live with a tradition, to not question things, to oppose change. Yet there is another interpretation of the story: The monkeys had learned a hard lesson and passed the lesson on down through the generations.

Yes, we need to question things but perhaps we need to show respect for whoever designed the original system—even if we do not fully understand their rationale. The monkey who defied tradition in the experiment and climbed the ladder would have been rewarded with a nice meal. The monkey who defied tradition in the wild and swam across the Zambezi River would have been a meal.


Systems do need to change from time to time and for a variety of reasons, not just because something in the external environment has changed. However, we should also show respect for the people who designed the previous system. There is no reason to presume we are smarter than them. Maybe there is a good reason why things are done as they are. We would do well to inquire why.


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