Friday, September 8, 2023

Iceberg of Ignorance

 


The “Iceberg of Ignorance” says that executives only know 4% of what is going on in their organizations. This has critical implications for how strategy should be developed.

Coined in 1989 by Sidney Yoshida, the Iceberg of Ignorance has become a popular metaphor to illustrate how little top executives usually know about what is really going on in their organizations.

Allegedly, executives know only 4%, while managers know 9%, team leaders 74% and staff 100% of the problems in an organization.

The exact percentages don’t really matter. Furthermore, I don’t think that Yoshida meant to say that staff knows much more about a company than executives, even collectively.

Because, of course, executives and managers also know a great deal about their organization (at least in most cases). And staff doesn’t know about a lot of things that executives and managers do know about.

So, the real point is not that staff knows everything and that executives know nothing. Or that a fully bottom-up or democratic approach to business is the solution.

No, the real implication is the realization that EVERYONE in an organization knows something important and that we need all that knowledge on board if we want to make the right, important decisions. Along that line, I think the percentages in reality are cumulative, so that executives + managers + team leaders + staff TOGETHER know 100%.

The area where this is most relevant is strategy. Strategy is complex and difficult by definition because it concerns an organization’s future and covers everything going on within and around that organization.

Exactly because of that, the Iceberg of Ignorance is so important to be aware of. Because, executives don’t know enough to make strategy on their own. They only know the tip of the iceberg. They need their managers, team leaders and staff because each of them knows something else important as well.

This means strategy development needs to be participative and inclusive, giving everyone a place in the process and tapping the collective wisdom of the entire organization.

Is this already how strategy development takes place in your organization?

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If you are interested in helping organizations through a participative approach to strategy and implementation, the Certified Strategy & Implementation Consultant (CSIC) program may be something for you. Registration for our second cohort opens soon. See Strategy.Inc for more information.

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