Summary of the Core Content
This article exposes the “self-circular trap” that companies often fall into as they grow larger: management becomes obsessed with using jargon, metrics, and internal processes to replace the real market dynamics. Employees learn to use clichés to package empty content, causing the company to drift away from customer needs and external realities. This leads to customer loss, innovation stagnation, and even sudden collapse. The article also analyzes the reasons for the formation of this trap, its dangers, the underlying psychological barriers that prevent senior management from making changes, as well as specific ways to break free from it.
Detailed Explanation
1. How is the self-circular trap created?
As companies expand and become more complex, managing large teams becomes challenging, leading them to use systems, metrics, and processes as a form of simplification. For example, they may use NPS scores to represent customer satisfaction instead of genuine customer feedback, or project completion rates to measure product quality. Over time, managers become increasingly reliant on these indicators, believing that a well-organized “symbolic world” means there are no real problems.
The language used within the company also changes: what was once an open loop of “formulating plans → implementing them → evaluating results → adjusting plans” becomes a closed cycle of “aligning strategies with KPIs → aligning KPIs with processes → aligning processes with reviews.” Jargon (such as “empowering” or “closed-loop” concepts) serves as a shield, making the company appear more professional while shielding it from external information and allowing for quick “alignment” (even if no one actually disagrees). For instance, saying “empowering the B2B ecosystem” might simply mean asking businesses to pay more, yet no one within the company challenges this interpretation.
2. What are the consequences of the self-circular trap?
- Talent drain: Those who are skilled at creating PPTs or using jargon advance quickly (with low cost and zero risk), while those who actually get work done (on the front lines, taking risks) are marginalized. Only those who are adept at using symbols remain, with no one truly focused on creating value.
- Stagnation of innovation: Disruptive innovations (like early digital cameras) are often dismissed as unprofitable or irrelevant by the company’s systems. Employees resort to “pseudo-innovation,” such as changing button colors as an “UI improvement,” while managers attribute this to “efficiency improvements” without any real change.
- Sudden collapse: Internal metrics may appear positive, but the external market has already changed—customers have moved on, and competitors have emerged. The company continues with its routine processes until it runs out of cash or is defeated by rivals (examples include Kodak and Nokia).
3. Why don’t senior managers change despite knowing the problems?
- Anxiety: The external market is too uncertain, so using symbolic frameworks provides a sense of control that alleviates their anxiety, similar to how a baby uses a pacifier. Admitting ignorance about the outside world would be devastating for CEOs.
- Power control: By defining terms in jargon, managers can monopolize the interpretation of success and failure (e.g., calling market share declines a “strategic contraction”). Jargon also creates barriers, keeping those who don’t understand the inner workings out of the decision-making process.
- Collective immunity: When projects go through multiple departments, no one takes responsibility for mistakes; the excuse is always, “We followed the process, so failure is external.”
- Self-deception: Mistakes are justified with jargon (“This is part of our long-term strategy”), and negative information is downplayed (“Customers just don’t understand the strategy”).
4. How to break free from the trap?
Here are four strategies to return to reality:
First Strategy: Force the use of plain language
Ban the use of jargon and assign “interpreters” to convert technical terms into understandable language. For example, replace “empowering the grassroots” with “increasing sales commissions by 2% for frontline staff, with a dealer entry rate of 95% by the end of the month.” During meetings, ask specific questions about who is responsible, where the work is being done, and what evidence supports the claims.
Second Strategy: Bring management back to reality
Encourage managers to interact directly with customers and understand the real situation. For example, have executives answer customer calls or spend time on the front lines. Eliminate abstract metrics and replace them with measurable, verifiable targets (e.g., actual customer retention rates). Use exercises like “red vs. blue team” simulations to test the effectiveness of plans.
Third Strategy: Incorporate dissent into decision-making
Designate a “devil’s advocate” within each project team to challenge assumptions. Hold “pre-decision analysis sessions” where potential failures are discussed openly, and delegate more authority to frontline staff (e.g., allowing customer service representatives to handle complaints directly).
Fourth Strategy: Reward honesty
Establish rewards for those who point out discrepancies between internal metrics and reality, and penalize those who present misleading or fake successes. Promote those who provide valuable insights about the actual market situation, regardless of the quality of their presentations. Promotion should be based on external results (market share, customer satisfaction), not just the quality of PPTs.
Final Thought
Companies exist for customers and the market, not in PPTs. Start by removing the fancy language from your next presentation and replacing it with straightforward, practical language. This might be the first step towards reviving your company.