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The circle of Assumptions; what is the circle of Assumptions? Well, the circle of Assumptions is an effective tool in helping people look at and realize what ideas they can actually justify having and which ideas were simply preconceived by situations they had been in or things they had simply heard.

At the core of all of our conclusions there is always data of some kind; and author Eric Douglas, in his groundbreaking new leadership book titled Leading at Light Speed describes the 10 Quantum Leaps which are ideas such what we are now discussing that build trust, spark innovation, and create a high-performing organization.

So when it comes to assumptions what should we as leaders do? For example, in talking about the future of the U.S. auto industry, someone might say: “The U.S. auto industry is not able to create high-performance and economically fuel-efficient cars. The industry simply isn’t structured that way.” In reaching that conclusion, this person relies on their data: First-hand experience shopping for cars, tidbits picked up from the news, a chart in the Wall Street Journal showing the relative shares of the world market over the past decade.

But while those data are valid, they may not be sufficient to support the conclusion.

Someone else who may have different data, for example, someone knowing the growth in the battery industry in the U.S. or the investment levels of new fuel-efficient technology may expose data that supports another conclusion. For example that: “The U.S. is indeed capable of making fuel-efficient cars, and I’ll bet that it owns more than 50 percent of the world market in ten years.”

We now have a standoff. Both parties started with their conclusions without sharing the data leading to those conclusions. They have also not explained how they interpreted or evaluated the data. Using the Circle of Assumptions, one could take a systems approach and begin to seek out the truth. Asking questions like: “What was the data that led to that conclusion?”, “Can you help me understand your reasoning?” etc.

Rather than trade opinions back and forth, the data-based approach asks people to explain their reasoning and to trade in data. The Circle of assumptions helps us visualize that inside every action and conclusion sits a closet full of assumptions, and it is only by digging through those assumptions that we will come to have a better understanding and ultimately to better decisions.

Take this free work survey to see if your organization is implementing the 10 best practices of high-performing organizations.

The yearly Employee Performance Review should be a affair of the past.  Performances should be gauged by comparing the Actual and Targeted Budgets for Company Divisions, and how employees in those business units contributed or hindered the Company’s Budget.

Dr. Samuel Culbert, consultant, author and professor of management at UCLA (Reference: Wall Street Journal, October 20, 2008, The Journal Report, Human Resources Section, “Get Rid of the Performance Review” by Samuel A. Culbert), makes the argument that the traditional performance review is really detrimental to company moral; not efficient for company performance; and can certainly damage communications within the company and hurts teamwork. Here are the negatives currently associated with the Performance Review:

Two Different Mindsets:  The boss is thinking about the company Business Plan and Strategic Plan in terms of performance improvements, missed opportunities, skill limitations and team dynamics.  The subordinate is interested with compensation and job advancement.

Performance doesn’t Determine Pay Levels:  As much as prevailing market forces do along with, employee experience and Company Budget constraints. 

Subjective Objectivity:  It can be argued that a Performance Critique is as much an expression of the evaluator’s self-interests as it is the subordinate’s strengths and weaknesses.  The newest performance review method, 360 Degree Feedback, gives anonymous feedback on an employee without any believability built into the evaluation method.  It is too easy for self-interests to go forth and axes to be ground with such a subjective, unexplainable performance evaluation method. 

One Size doesn’t Fit All:  Cookie cutter Employee Performance checklists often create a situation of boss pleasing behaviors verses doing a good job.  Different people with different functions and backgrounds shouldn’t be judged on the same rating scale and one size fits all system. 

Personal Development is Impeded:  Subordinates are often intimidated by a Boss’ involvement in job performance as the Performance Review Structure discourages self-honesty about an employee’s short comings and areas which need improvement.  Subordinates feel self-analysis and self honesty could very well come back to stalk them during the evaluation.

Hindrance to Effective Teamwork:  The most important team dynamic, that between boss and his or her subordinates, is undermined by the Performance Review process.  The Boss is preaching teamwork, but the Performance Review process is one-sided, as the boss sees him or herself as the evaluator and doesn’t engage his team of associates.  Dr. Culbert, calls it like it seems to the subordinate:  “… a ubiquitous need for subordinates to spin all facts and viewpoints in directions they believe the boss will find pleasing.  It defeats any chance that the boss will hear what subordinates actually think.”

Immorality of Justifying Corporate Improvement:  At first I thought, as a Business Consultant and Business Coach, this is an awfully “strong” assertion by Dr. Culbert, but after reading the first sentence in this section, I think he makes a valid point:  “I believe it’s immoral to maintain the façade that annual pay and performance reviews lead to corporate improvement, when it’s well-defined they lead to more bogus activities than valid ones.”  Performance Reviews tend to dispirit the employee and create distrust and cynicism.  The amount of inefficiency created by “cover your butt” mentalities is probably much more significant than managers know. 

I will have more on the alternative, the Performance Preview, in my next article…

About The Writer

Frank Goley is a business consultant, business turnaround consultant, business plan expert, business coach, small business consultant, business planner, marketing consultant, online marketing seo consultant, and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, funding business plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 50 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog.

I read the following article today and it summarises so well what I have been saying from the time I had my own ‘aha!’ moment.  In essence, work more, save more, take on an extra job, start a side business and the quickest strategy of all…. spend less money! Read the rest of the article  below.

Since When Is Saving Money a Bad Thing?

The recession is turning Americans into penny pinchers. Seven out of 10 of us are cutting expenses, a Gallup poll says. And we spend only 86 percent of what we used to.

Just about every mainstream publication I read — including The Wall Street Journal and The New York Times — says this is a bad thing. But they are wrong.

The point they make is that if Americans cut back on spending and save more, new cars will stay on lots. Contractors will lose jobs. Lawn services will be let go. And stores will go out of business

So what’s wrong with that?

The fundamental reason for the financial mess we are in is that we have been spending more money than we have. Consumers have been doing it. Businesses have been doing it. And the banks and institutions that hold our money have been gambling it away.

The press wants us to believe that trillions of dollars have mysteriously disappeared from our economy because of this lack of spending. But that wealth never existed in the first place. It was an accounting fraud. The land, the buildings, the machinery, and our human capital, however, do still exist.

When your business is losing money, you cut expenses and work harder. When families run over their budgets, they do the same thing. So why should it be different with an economy? It’s not.

Spending more now will only make things worse. But if you take care of yourself, you will be doing more for the economy than the government could ever do.

So work more. Save more. Take on an extra job. Start a side business. And spend less money.

 

Thank you Michael. But tell me this… why do people listen to you and not to me? Maybe it’s because you’re a well known and published author… but as long as people listen to one of us, then we’ve done our job.

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