Tag Archives: pros and cons of conventional wisdom

The Pros and Cons of Conventional Wisdom

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Our previous post shared an example of how what “seemed” to be a sure way of increasing the bottom line turned out to do quite the opposite! It was also a classic example of the perils that are often attached to “conventional wisdom.”

Conventional wisdom is typically considered to be an asset, and in many situations it can be. It speeds up consensus and increases our confidence in our decision making, leaving us to focus our attention on challenges for which there is no conventional wisdom to guide us. And conventional wisdom has much truth within it — having been developed over decades of observations.

But in a dynamic world when the underlying assumptions shift, we follow conventional wisdom at our peril as it can easily lead your organization to make some big mistakes.

For example, conventional wisdom holds that specialization is good. A person can get very fast and reliable doing the same thing the same way again and again, as was done in Henry Ford’s assembly line which broke the complex craft of auto assembly into a sequence of very specialized jobs that could be easily taught to the relatively unskilled workforce. Assembly line efficiencies put automobile ownership in reach of a much larger portion of the country and made the benefits of specialization a part of our national business psyche.

But to achieve the benefits of specialization, you need something increasingly uncommon in today’s world: high volume/low variation work.

A service organization learned this lesson the hard way when they implemented a plan they “thought” would speed up throughput and reduce overtime costs for processing new account applications . They organized their processers into different groups to handle different clients. This enabled each processer to complete an account set-up faster because they could easily memorize the steps and forms for their small group of clients. Nonetheless, the efficiency of the operation as a whole declined substantially. Variation in the incoming volume resulted in one group being swamped one day and working overtime, while another group was very slow.

For work that is low volume/high variation, as in the service organization example, specialization tends to reduce throughput. In such an environment, multi-skilled generalists are far more valuable. Specialization may maximize the speed of the individual, but sub-optimize the process as a whole.

Possibly Mark Twain summed it up best when he said, “”It ain’t what you don’t know that gets you into trouble; it’s what you know for sure that just ain’t so.”