Reasoning Styles And Organizational Success Creation

By Patricia Hayden | Published 2005-03-05 | Organization | Unrated       printer version

One aspect of organizational culture and performance that is frequently overlooked, but nonetheless has a significant impact on company financial and market performance is that of Reasoning Style.  The manner with which organizations ­reason through challenges and opportunities appears to be one of the three largest factors related to financial performance and business expansion.  It is, in fact, rather easy to adjust organizational reasoning styles without regard to the size of the organization.  The purpose of this article is to summarily demonstrate how to change the reasoning style of an organization in the event that you determine that the success of your organization is being limited by its cultural reasoning style.

There are two major forms of human reasoning styles:  DEDUCTIVE and INDUCTIVE:

Nearly all organizations have strategies, strategic plans, desired outcomes and expected results.  Where a conflict very frequently occurs is in the reasoning style with which those plans, outcomes and results are pursued.  Pursuing a strategy with unnecessary operational or leadership focus on details will delay the execution of that strategy.  Based on our research and experience, this conflict creates organizational inefficiency, excess expense and disconnection from markets and customers.

Focusing on details and rewarding or retaining individuals for doing that within your organization while the organization as a whole attempts to pursue necessary strategic and financial objectives is tantamount to believing that the number of dotted lines on the roadway between starting and ending point of a long road trip is what gets you to your destination.  The relationship between detail focus and organizational expense tends to be directly proportional.

At the same time, it is crucial to remember that details and inductive reasoning have their place in nearly all organizations.  It is equally crucial, however, to remember that the optimal organizational structure for organizations over 400 employees and/or organizations that have existed for more than 4 years is one where 20% or less of staff members are inductive reasoners and where none of the organization’s functional or strategic leaders are inductive reasoners. It is exceedingly wise to have inductive reasoners report directly or indirectly to deductive reasoners.  In that manner, the organization will not become paralyzed by the details and the details that are focused upon will be meaningful in terms of the strategies being pursued.

Reasoning style is an acquired attribute and in approximately 75% of cases is not difficult to adjust.  Unfortunately, though, in most industrialized economies, organizations have historically provided no emphasis on reasoning style development or reinforcement in terms of executive and staff training, rewards and coaching.  In the 25% of cases, where reasoning style is not adjustable, it is nearly always due exclusively to preferential resistance by the incumbent and enabling by the organization.

A significant challenge presented by inductive organizational cultures and strategic leaders who reason inductively is that it creates byzantine organization structures, not connected to external markets, resulting in clearly evident organizational dysfunction and downsizings caused largely by details that very frequently do not matter to markets. 

At the same time, it is important to note that organizational motion is created not by pursuing details but instead, by pursuing market-based customer-focused outcomes.  For instance, one of the many reasons that the U.S. airline business is in such financial disarray, despite the fact that airplanes are now generally more full than at any time previously, is because the majority of airlines (except for Southwest and America West) are mistakenly focused on fare blackout dates, capacity controls, standby charges, advance purchase rules, and the differential between Saturday night fares and non-Saturday night fares.  There is no detail in the prior sentence from which customers gain.  Most airlines have mistakenly attempted to create detail-focused false economies that have no connection with how customers are willing to fly.  Those that do not do so will thrive.

When your organization structure and as a result, culture and strategy, are mistakenly focused on details (inductive reasoning) it is simply not possible for the organization to maintain a market direction, market condition, employee, or customer focus.  The detail focus eliminates most or all ability to focus on true revenue growth and profit producing activities.  More than 80% of companies that have undergone repetitive downsizing, lost market share, and declining financial performance during the last 3 years have been detail-heavy and strategy-light.  They tend to talk strategy, while acting detail.

With the U.S. and many other world economies currently undergoing a turnaround, the organizations that will succeed most noticeably in the new economy will be those that in most cases have embraced and created broad deductive reasoning within their organizations.  Reasoning style can be very accurately assessed prior to hire and/or promotion, and can easily be rewarded through compensation systems and recognition methods.  Work team, functional, product and geographic reasoning attributes can be easily determined through valid and well-structured staff surveys as well.

To start you on your way with this pursuit, consider these methods as only two of the means with which you may evaluate your organization while staffing it, so that organizational reasoning style does not prevent financial and marketplace success:

Develop a rank order of up to five of your organization’s most successful and productive product lines, business units and/or administrative functions.  Then, utilize the information from the description table above to determine which reasoning style has been utilized and which reasoning style is most prevalent within those lines, units or functions.  It is very likely that the same reasoning style (deductive) will exist largely or exclusively in all of those cases.

During all interviews for hire or promotion, assess how quickly the candidate answers your questions.  The speed with which answers are provided and the likelihood that the individual is a deductive reasoner will be directly proportional.  Ensure that one of those questions is, “Tell me everything about the degree to which you focus on details”.  Judge the answer to that question based on very specific job requirements, with the understanding that all leadership and influencing positions have required deductive reasoning for decades.

Through this entire journey, please remember that how one “prefers” to think, or how one has been “taught” to think, or the way one has been “rewarded” for thinking, may have no connection with how your marketplace requires your organization to think We encourage you to challenge yourself and your organization to evaluate, embrace and practice the deductive reasoning skills outlined above to ensure the future growth and success of your company.

Because some of our areas of specialty are organizational structuring, candidate assessments and the design of employee and executive selection methodologies, please Contact us or call us at 480-467-0344 and we would be pleased to discuss, clarify or expand on any of the above points.