The Power of Intelligent Naiveté

Experience, education and an understanding of history bring wisdom, but an amount of intelligent naiveté is essential to critical reasoning. As I struggled to find a word that I could use to characterise the ability to question fundamental blocks of knowledge and revaluate ones understanding continuously, I choose the expression "intelligent naiveté". As I typed this into Google I saw a paper that referenced intelligent naiveté. I did not download the article since the site allowed down loads at a fee. I decided to go with my definition of this term.

I have for long time regarded capitalism as a preferred system, and until recently with some reservation considered the free market variety as the best kind. Ha-Joon Chang articulates with great impact in his book "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism" the reasons that many of us have some discomfort and reservations about free market implementation. People like Noam Chomsky and Chang have done a great job in questioning and challenging popular concepts and thoughts that the masses get indoctrinated with. This indoctrination happens at all levels of society, politics, and education and even in companies.

Many companies indoctrinate their employees in "their way". This helps drives people towards a common cause of increasing revenue, profits, adoption of their product, services, etc… But the indoctrination can become counterproductive when organizational attitude and philosophies take precedence over customer needs. It requires the naïve employee to ask the difficult questions, and to point out that the "emperor has no clothes" to ensure that the market needs and expectations are being met.

There are many areas where there is not enough naiveté and the indoctrination seems to have dulled questions. Just to name a few, the collapse of the banking sector, and the bail outs, the functioning of democracy etc.

Working hard on a bad idea does not make it good

The difference between determination and stubbornness is a thin line that can result in either success or failure. Taking a bad idea and working it to death does not make an idea any better. Many leaders talk about the importance of perseverance, the "never say die "attitude. What many forget to mention is that if your idea is consistently not leading to the successful results you expect, then maybe it is just a bad idea.

I was invited by a friend (lets call him Vivek) who is the founder and CEO of a medium sized technology company, to observe their director's review of his organization. Their 2008 annual revenue was about US$300M, and like many companies, Vivek's company has also been hit by the tough economic situation and expects their revenue to be around US$ 220M in 2009. Like everywhere else, people are working overtime to figure out ways to "grow" the company more than it would normally.

As they went over the various changes they were instituting in the organization, I could not but help think of the agendas of the people behind these ideas. Two things struck me as the most obvious, the CEO Vivek was more interested in the technology and products that his company made, than in the company itself. The other was that the changes were being made to the only part of the organizational structure that was consistently successful with hard to argue success metrics.

True to the current theme of "why waste a good crisis" the management team was being restructured. The product development team now needs to go 3 levels deep before people with deep technical or market expertise could be found. The distribution channels were changed to be uniformly efficient globally, but in practice hardly effective in many parts of the world.

When I asked Vivek what he expected to gain from these changes, he was honest that from the products perspective he would continue driving the strategy because his top leaders did not "get it". And from a distribution point of view the people behind the change were unwilling to commit to more than 5% growth over the current estimates. As we talked he admitted than in 15 years this was the 4^th time his product team was reorganized, and the 3^rd time they attempted to change the distribution model. Vivek said that finally it always reverted to the current structure. This time Vivek was determined to make it work, so he did not expect my question "why change the organization" when similar changes did not work in the past. I suggested that maybe his idea was just bad. The clarity of the situation struck me when I saw his face; often in life we mistake stubbornness for determination. May be Vivek's company will be 5^th time lucky! He clearly thinks that his determination will make his new structure work better.

In times of crisis there will be continuous demands for change. Many of these demands will be justified. Many will not. If you are in a position to provide direction to your organization, take a little time and understand the history of your organization, and the agenda of the current actors including your own agenda. This will help you differentiate between stubbornness and determination.