Wiseman discusses the Logic of Addition and the Logic of Multiplication below. Describe both logics and identify
Question:
Wiseman discusses the Logic of Addition and the Logic of Multiplication below. Describe both logics and identify which logic best summarizes your position.
logic of addition
This is the dominant logic that has existed in corporate planning: that resources will be added when new requests are made. Senior executives ask for more output and the next layer of operational leaders request more headcount. The negotiations go back and forth until everyone settles on a scenario such as: 20 percent more output with 5 percent more resources. Neither the senior executive nor the operational leaders are satisfied. Operational leaders entrenched in the logic of resource allocation and addition argue: 1. Our people are overworked. 2. Our best people are the most maxed out. 3. Therefore, accomplishing a bigger task requires the addition of more resources. This is the logic of addition. It seems persuasive but, importantly, it ignores the opportunity to more deeply leverage existing resources. The logic of addition creates a scenario in which people become both overworked and underutilized. To argue for allocation without giving attention to resource leverage is an expensive corporate norm. Business school professors and strategy gurus Gary Hamel and C.K. Prahalad have written, "The resource allocation task of top management has received too much attention when compared to the task of resource leverage.... If top management devotes more effort to assessing the strategic feasibility of projects in its allocation role than it does to the task of multiplying resource effectiveness, its value-added will be modest indeed."8 Picture a child at a buffet line. They load up on food, but a lot of it is left on the plate uneaten. The food gets picked at and pushed around, but it is left to go to waste. Like these children, Diminishers are eager to load up on resources, and they might even get the job done, but many people are left unused; their capability wasted. Consider the costs of one high-flying product development executive at a technology firm. THE HIGH-COST DIMINISHER Jasper Wallis9 talked a good game. He was smart and could articulate a compelling vision for his products and their transformational benefits for customers. Jasper was also politically savvy and knew how to play politics. The problem was that Jasper's organization could not execute and realize the promise of his vision because they were in a perpetual spin cycle, spinning around him. Jasper was a strategist and an idea man. However, his brain worked faster and produced more ideas than his organization could execute. Every week or so, he would launch a new focus or a new initiative. His director of operations recalled, "He'd tell us on Monday, we needed to catch up with 'competitor X,' and we needed to get it done this week." The organization would scurry, throw a "Hail Mary" pass, and make progress for a few days, and then eventually lose traction when they were given a new goal to chase the following week. This leader was so heavily involved in the details that he became a bottleneck in the organization. He worked extremely hard, but his organization moved slowly. His need to micromanage limited what the rest of the organization could contribute. His need to put his personal stamp on everything wasted resources and meant his division of 1,000 was only operating at about 500 strong. Jasper's modus operandi was to compete for resources with a larger division in the company that produced similar technology. Jasper's overriding goal was to outsize the other division. He hired people at a breakneck pace and built his own internal infrastructure and staffall of which was redundant with infrastructure that existed in the other division. He even convinced the company to build a dedicated office tower for his division. Things eventually caught up with Jasper. It became clear that his products were hype and the company was losing market share. When the real return on investment (ROI) calculation was made, he was removed from the company and his division was folded into the other product group. The duplicate infrastructure he built was eventually removed, but only after many millions of dollars had been wasted and opportunities lost in the market. Diminishers come at a high cost.
The Logic of Multiplication
We have examined the logic of addition and the resource inefficiencies that follow. Better leverage and utilization of resources at the organizational level require adopting a new corporate logic. This new logic is one of multiplication. Instead of achieving linear growth by adding new resources, you can more efficiently extract the capability of your people and watch growth skyrocket. Leaders rooted in the logic of multiplication believe: 1. Most people in organizations are underutilized. 2. All capability can be leveraged with the right kind of leadership. 3. Therefore, intelligence and capability can be multiplied without requiring a bigger investment. For example, when Apple Inc. needed to achieve rapid growth with flat resources in one division, they didn't expand their sales force. Instead, they gathered the key players across the various job functions, took a week to study the problem, and collaboratively developed a solution. They changed the sales model to utilize competency centers and better leverage their best salespeople and deep industry experts in the sales cycle. They achieved year-over-year growth in the double digits with virtually flat resources. Salesforce.com, a $1 billion software firm that has pioneered software as a service, has been making the shift from the logic of addition to the logic of multiplication. They enjoyed a decade of outstanding growth using the old idea of "throwing resources at a problem." They addressed new customers and new demands by hiring the best technical and business talent available and deploying them on the challenges. However, a strained market environment created a new imperative for the company's leadership: get more productivity from their currently available resources. They could no longer operate on outdated notions of resource utilization. They started developing leaders who could multiply the intelligence and capability of the people around them and increase the brainpower of the organization to meet their growth demands. Resource leverage is a far richer concept than just "accomplish more with less." Multipliers don't necessarily get more with less. They get more by using moremore of people's intelligence and capability. As one CEO put it, "Eighty people can either operate with the productivity of fifty or they can operate as though they were five hundred." And because these Multipliers achieve better resource efficiency, they enjoy a strengthened competitive position against companies entrenched in the logic of addition. This book strikes at the root of this outdated logic. To begin to see how, we will turn to the question of how Multipliers access intelligence and get so much from people. The answer, we found, is in the mindset and the five disciplines of the Multiplier.
Wiseman, Liz; McKeown, Greg. Multipliers (pp. 14-18). HarperCollins e-books. Kindle Edition.
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley