Iceberg of Ignorance – Do You Know What You Don’t Know?

IMG_7713I was having lunch with a colleague and we were talking about some issues she was having at work. She was saying how difficult it was to get her senior leadership to understand issues the front-line employees deal with every day. She shared concerns for what she described as a big disconnect between employees who interact with the customers and upper management. It reminded me of some research I was exposed to years ago – The Iceberg of Ignorance.

The Iceberg of Ignorance is based on a study that was done by Sidney Yshido in 1989 which indicated that senior management often fail to understand business operations from the perspective of the customers and employees. The interesting finding of this study was that this can affect a company’s profits by as much as 40%.

The study revealed the following:

  • Issues known to senior management were 4%.
  • Issues known to managers were 9%.
  • Issues known to supervisors were 74%.
  • But front-line employees were aware of 100% of the issues that affect the product or service that was being delivered to a customer.

How can senior management be so clueless?
The art of recognizing and solving problems is essential for leaders. Senior levels of the organization should strive to be in tune with day-to-day issues confronting employees. Unfortunately, if there is not a structured process for gathering and analyzing performance data, executives can fail to see what is affecting employees and sadly their customers. Whether it is a broken purchasing process, faulty manufacturing equipment or an aging facility – senior leaders need to be aware so they can help resolve issues.

What is troubling about these findings, is that the very people with the ability to affect positive change for the organization, are the ones who are not aware of the issues that employees or customers are dealing with.

Four ways that senior leads can be aware of customer issues will be covered in another post this week.

Patricia is the President and CEO of The Thriving Small Business, a business performance consulting company. Patricia helps small businesses develop and grow by helping them create infrastructures that support increased revenues, decreased costs and improved customer experience.

photo credit: Jenny Varley

One Response to “Iceberg of Ignorance – Do You Know What You Don’t Know?”

  1. Cathy Jaynes said:

    Jan 02, 12 at 6:15 pm

    do you have a reference for the Yoshido article so that I can retrieve it? Would sure appreciate it . . . Thanks!