The Evil Of Our Worst Assumptions - Aditya Yadav

1. *
“Running an Agile Fortune 500 Company”
Aditya Yadav, aditya.yadav@gmail.com
in.linkedin.com/in/adityayadav76

2. * A Typical Global Company
* Fortune 500/1000
* 200 Divisions
* 40 Countries
* 25000 Employees
*

3. *
@ Acme Inc.

4. * Original Question “We know that „x‟ is the
case. What should we do?”
* The Correct Question - “The situation is
complex, the risks are higher and the horizon is
longer. Should we relook at our Assumptions
before building a Model and arriving at the
Decisions?”
*

5. *
And The Philosophy Behind The Answer

6. * Anchoring, where we give disproportionate weight to the first piece of information received,
* Hindsight bias, which leads us to give undue weight to a recent (possibly dramatic) event.
* The status quo trap biases us toward maintaining the current situation, even when better alternatives
exist. The mistakes of the past are perpetuated by sunk-cost thinking ('We have invested so much that
we cannot alter course now').
* Confirmation bias is when we seek information to support an existing view and discount opposing
information.
* The Overconfidence trap appears when someone has exaggerated their ability to understand situations.
* Framing happens when an issue is incorrectly stated, undermining the decision-making process.
* The Prudence trap leads us to be overcautious about uncertain factors, reflecting a fear of failure and
risk aversion.
* Bolstering is an uncritical emphasis on one option.
* Shifting responsibility is another way of coping with difficult decisions and is often a sign of weak
leadership.
*** http://www.thisismoney.co.uk
*

7. * Are not Accidents!
* Are not Unfortunate Incidents!
* They are Mistakes Piled on Top Of Mistakes,
Blunders upon Blunders
* In Hindsight they make us think How Easy It Could
Have Been Avoided
* All Reviews, Feedback and Facts and Sometimes
Processes were Ignored
* They have all been premeditated decisions based on
Wrong or Out Dated Assumptions and Models
* And they are always Committed by The Experts!!!
*

8. Data Insights Decisions
Facts Questions Strategy
Assumptions Models
*

9. *
Have you forgotten The Assumptions which are
The Foundations of your Castle?

10. * If a bad hire costs $40k and the wage is $80k * It would take 1hr of effort to sell to the
* You pay 3 months salary as recruitment fees and 1 prospect to reduce the abandonment rate
month as bonus/relocation = $27k
* Instead of offering a “Competitive
* You do 8 rounds of interviews in panels of 3 Wage(???)” you could have made an
* You interview a dozen and half candidates = $17k irresistible offer using the same money
* You have already incurred $44 in expenses till the and increased joining ratio substantially
point of the interview * How specialized is your requirement that
* Besides waiting 3-6 months to make the hire it requires 6 months of selections and 8
(Opportunity Costs if equal to wage) = $40k rounds each.
* And you have waited 2-3 months after making the * How much reliability do you need in hiring
offer to join with an abandonment rate of 25% =
$20k to warrant 8-10 rounds of interviews?
* You have incurred a total cost of $104k to hire one * Does it take those many to decide? Have
person you heard of “Speed Date Hiring”? Why
* What are your assumptions exactly? should that work? Think again?
*

11. * You start an employee referral program and offer * Scenario 6: A Players might refer A Players but <=
$2k-5k to employees for referrals B Players refer C, D and E Players. So you actually
incur bad hire costs of $40k with 80% probability =
* The wage is $80k $32k
* The referral bonuses will be paid 3months after * Scenario 7: The group of hires become a power
joining center in the office and increases conflicts
* Scenario 1: Gold Rush – Employees refer everyone * Scenario 8: Like hires Like… The group becomes
they can causing a Flood detrimental for innovation and business
* Scenario 2: Low Ratio of selection. Employees stop * Scenario 9: Eventually the effort to refer someone
referring and the system fails keeps increasing till the point it makes the $2-$5k
* Scenario 3: Employees inviting people they don‟t incentive inconsequential
know on Twitter/Facebook/Linkedin to be * Scenario 10: You get the right Quality Hires and
referred and share the bonus. What is the have succeeded in your Goal.
Quality/Reliability of those refered?
* Scenario 3: Empire Building in the Current
* You still incur $84k (previous slide) and probably
bad hire costs of $32k to hire anyway. What costs
Company are you saving? $20k of recruitment consulting
* Scenario 4: The referrer leaves your company and fees?
refers his earlier referee‟s along. It is a big LEGAL * What was your assumption actually? Save
business recruitment fees and make reliable & quality
* Scenario 5: Gaming the System by letting out the hires?
Cheat Codes and Selection Secrets (There is a full
industry that exists just for that)
*

12. * In 90% of Companies * Now lets look at Companies that
* First email someone, then „Actually‟ Succeed
* Call him up, then * Rush to meet someone Face to
Face, if not
* Chase him and meet him Face to
Face * Call him and sort it out then and
* What are your assumptions here? there
* Everything starts with email because * Last resort, email him
– Its more Scalable? * Your organizational workflows are
* How? With more unfinished in the exact opposite order of
work/action items it can bring the that which leads to Success.
entire company to a crawl * Moral: Hiding behind emails,
* Everything will be lost in Email paperwork, processes leads to
* Nothing will get decided, let alone * Bringing the progress to a crawl,
achieving consensus and moving and eventually
forward * The failure of your company
*

13. * You create an elaborate system to track working hours, * Absolutely absurd Trust Equation with the
in and out swipes etc. employees. Is this the Foundation of your
* Yet everyone enters exactly 40 hours into the time Organization?
sheets used for billing. Though employees seldom work * That all employees are irresponsible.
less than 60 hrs. What are the time sheets for anyway?
* You ask for exact task by task details to be entered into * Then how and why do you expect them to
the time sheets so everyone enters fairy tales anyway voluntarily contribute innovations to your
company? Oh you still believe in the magic of
* You don‟t do anything with those reports anyway and process conformance to deliver organizational
you will bill for 40 hours anyway. Why the complexity?. success?
But these things are a huge cost and burden.
* You block everything on your intranet, internet, lock * And why would they be prudent with cost savings?
down everything in the name of loss of productivity (and And optimizations? Continual Improvements? Wait!
security) and yet grumble about low productivity. You say you will put 30-40 KRA‟s for each
employee.
* You give obsolete hardware in the name of
standardization. Which costs peanuts in comparison to * Total Disconnect: You say they are not producing
their salary yet costs in terms of engagement and enough. They (don‟t say) are quietly mumbling
productivity and efficiency. they cant put in more hours than they already are.
* You check every webpage they open and audit every (Hint: There is no concept of overtime in the
email they send because they are using corporate knowledge industry)
equipment and you own that and have the right to do
so. There is absolutely no privacy. Security maybe(!!!) * Every policy/action and its assumptions are grossly
out of sync here…
* Then why do you pretend to give them cubicles (in the
name of privacy?)
* And this has happened for the last 20 years
* What are your assumptions here?
*

14. *
*
The Greater the Expert
The More the Domain Expertise
* When the situation is
* The More the Experience
Complex
* The More the Niche Specialization * The situation is very
* The More Wrong they can be in their Uncertain
* Assumptions
* Predictions
* The Risks and Costs could be
* And their Negative Reactions and Openness to new very high
*
Idea‟s
Abnormally and Unhealthily High Risk Aversion
* The Environment is changing
* And Higher their Inertia to maintain the Status Quo
rapidly
and avoid Change
* The Horizon is very long term
* They do things that are
* Proven (???), or
* The Norm out here (!!!), or
*
* So Called Industry Standards & Practices (???)
* They also make the Biggest and Fanciest Up Front Ivory
Tower Plans and Strategies based on nothing but
Baseless Assumptions aka Experience

15. *

16. Aditya!!!
*