Avoid The Woodcutter’s Paradox!
In our work we get to visit a LOT of different companies in varied industries all over the world. It’s a unique perspective that allows us to see patterns that repeat, over and over, no matter the size and shape of the business. One feature of businesses that we see a great deal of, especially these days, is The Woodcutter’s Paradox.
It is a telling parable: you are walking through the woods when you encounter a person feverishly cutting wood with a dull axe. “Sir, why don’t you stop and sharpen your axe so that you can cut your wood so much faster?”. The man replies, “Are you kidding? I can’t stop cutting wood because I am so far behind!”. You leave the man, shaking your head at his foolishness.
The solution seems obvious, doesn’t it? Yet, so many businesses put great energy into the day-to-day firefighting that they neglect the truly important and long term health and hygiene of improving the business in the first place.
We are not naive to the temptation to “tame the alligator in front of us”, to use a common Texas expression. But if we devote the vast majority of our energy budget to the urgent but unimportant, we leave our companies merely treading water and not advancing in important ways. I say this against the backdrop of Artificial Intelligence (AI) today, which has the power to disrupt any business that chooses to rest on its laurels. Ironically, good businesses are probably the most susceptible to attack by disruptive technologies and approaches. Don’t be “that company” that we read about in the news—the once-great firm that failed (to everyone’s surprise!).
So how do I avoid the negative consequences of The Woodcutters Paradox?
Here is what our experience has taught us about the best firms and how they behave:
- Relentlessly examine operations
Great firms are obsessed with systems. They want to know all of the processes and the often hidden feedback loops that exist in their companies—the basic operational glue that holds the company together and generates a dollar or two at the end of the day. Truly exceptional firms raise this to an art form—literally—by creating thoughtful, powerful diagrams (schematics) of how the company works and then critique those diagrams ruthlessly.
- Democratize analysis
It is insufficient to create a “priesthood” of a few people who know the science of the operations well, leaving everyone else in the dark. The antidote is a sharing of knowledge across the whole of the company while inviting insight at any level.
- Create an experimental culture
History shows us that some of the most remarkable ideas and products have come from people in companies that “experiment” with ways of doing things differently. A culture that welcomes and nurtures experimentation (knowing that the vast majority of experiments fail—thats the point) is one that will reap substantial benefits.
- Routinely invite outside opinions
Your own people are often too close to the business to ask the uncomfortable questions that are necessary to unlock unconventional wisdom (the second best kind of wisdom). Ironically it is often people who have zero experience in your industry (but are systems thinkers) that provide the best guidance for solving problems.
- Measure everything
Today the cost of measuring almost any aspect of a business in a highly granular way is near zero. Therefore we no longer have any excuses to measure everything that we can imagine. Like a Ring doorbell camera, our goal is to create a record of events of unknown value so that we never have to look back and say, “gee, I wish we had the data to know ___”.
At Business Laboratory, we specialize in moving companies out of The Woodcutter’s Paradox. We do that by using a mathematical lens through which to view companies and their operations. If you or your leadership team struggles to break out of this pattern, we are happy to help. Please reach out to us and we will lend you a hand. https://business-laboratory.com/contact/
