My friend Roger is the president of a small manufacturer here in California that's owned by a larger Swiss company. A few months ago, his facility hosted a global meeting of all the companies held by the Swiss parent. In keeping with company custom, he made a sign welcoming all the participants and listing their names. After peering at the list for awhile, the Swiss CEO said, "Interesting. . . I'm trying to figure out how you ordered the names."

In fact, there was no particular order -- Roger listed the names randomly. But when the CEO made his comment, Roger panicked: did the CEO expect a particular order? By title? Seniority? By shoe size? Roger was so anxious about making a mistake that when he made a list for an event later in the meeting, he agonized over it for 45 minutes before finally putting the names in alphabetical order.

Now, it turns out that the CEO didn't care. He was just curious, because he couldn't see any discernible pattern in the names. (And he's Swiss.) But Roger, as a relatively new head of the subsidiary, couldn't help but read something into the CEO's question that just wasn't there.

I call this problem the "inference effect." The higher up the organizational food chain the person asking the questions is, the more likely we are to infer meaning that isn't there. If it's your colleague asking a question, you probably take it at face value. If it's your (Swiss) CEO, you'll infer all kinds of unintended meaning. The mangers at one of my clients often joke that they'd like to "kill the CEO's curiosity"-- whenever he asks a question at one of the quarterly business review meetings, it causes the team to prepare even more reports and analysis for the next one. Over the years, his team has sliced and diced the data so many ways that they can hardly see the forest for the bark, never mind the trees. And the sad thing is that the CEO didn't care deeply about most of the questions -- they were simply expressions of idle curiosity.

The tragedy of the inference effect is the needless waste and churn it creates. Roger spent 43 minutes more than was necessary to make a list on a sign. The financial team at my client is spending time analyzing sales by region by distribution channel by packaging color by day of the week by store manager's zodiac sign.

As the CEO, you owe it to your team to be cognizant of the inference effect. You're one of their most important customers, and they'll work hard to provide you with an answer, because they assume you value it. Feel free to ask something out of sheer curiosity, but if you don't want them to do additional analysis, say so. Don't let them infer meaning that's not there -- because they will. And that's not only a waste, it's a tragedy.


My new book, Building the Fit Organization, comes out on September 22. It's a fresh approach to continuous improvement -- no mention of Toyota, no Japanese, and no weird English jargon. Instead, it has approachable examples and models drawn from the world of physical fitness and athletic excellence. You can pre-order it on Amazon now:

Joe Dager at the wonderful podcast Business901 interviewed me about the book recently. You can listen to the podcast here: If you like to watch more than listen, you can see my first webinar on the book, which I idd for Joakim Ahlstrom and the C2 Consultancy here:

If you're in the SF Bay Area on Sep 24-25, I've organized an amazing 2-day workshop with Mark Hamel on Visual Management & Leader Standard Work. Mark is a great teacher and deeply experienced in all facets of lean. The event will be held at the hospital job site of Boldt Construction, where you'll have a chance to see an how an obeya can be used to manage the complexity of a major construction project. For more information, go to


That's all the self-promotion for this week.