The Hidden Hand of Shared Assumptions

Behind many business failures and underperformance lies a common root cause – the unseen influence of collective assumptions and beliefs (and Cf. Rightshifting). Across organisations and even entire industries, leadership often clusters around shared perspectives, biases, and mental models. Over time, these become entrenched as accepted wisdom rarely challenged or revisited. This phenomenon profoundly shapes decision-making, typically outside conscious awareness. And flawed underlying assumptions can lead organisations astray, even unto the graveyard.

A prime example is the financial crisis. The model of endless housing price growth and low-risk securitized assets became so ingrained across banks that it created systemic fragility. The possibility of declines or instability was dismissed out of hand. Groupthink prevailed and warning signs were ignored. Until the flawed assumptions catastrophically collided with reality.

Every sector holds similar tales. In automotive, the assumption of an enduring petrol car dominance slowed electric investments. In medical science, the belief that ulcers resulted from stress delayed recognition of bacterial drivers. The corporate world is littered with shifting paradigms disrupting those clinging to outdated assumptions.

Why does this happen? Humans are sensitive to social signals and prefer perspectives validated by their peer group. This shapes unconscious biases and mental models. And perceived wisdom calcifies even where contrary evidence emerges. We must therefore consciously re-evaluate the collective assumptions within which we operate.

This is particularly crucial given rapid technological and social change. Assumptions rooted in fading reality misguide strategy. Herein lies opportunity for those recognising seismic shifts early. And grave risks for those dismissing disruptive forces based on yesterday’s truths. Separating enduring assumptions from emerging realities is key.

So let us examine just four detrimental assumptions embedded across businesses:

• The concept of management is treated as an inherent good when in fact it can severely hamper organisations. Managers micromanaging and scrutinising employees’ every move often harms efficiency, stifles innovation, and breeds resentment amongst staff. The relentless oversight creates a tense working environment where workers have no autonomy or control. The reams of paperwork and interminable meetings generated by managers frequently add little value. Clearly, the assumption that more managers and more top-down control is always better fails to acknowledge the reality and the downsides.
• The notion of concentrated leadership seems ill-founded. Centralising decision-making and strategy in a narrow elite risks disempowering the wider workforce. When employees cannot influence choices impacting their work, motivation and dedication suffers. Likewise, executives profiting lavishly from company successes while workers gain only stagnant wages breeds discord and weakens productivity down the chain. The contributions of a chief executive on a £10 million salary rarely outweighs that of a thousand dedicated employees. Concentrated power often produces conflict and fragility rather than thriving organisations.
• The belief that exhaustive software testing is imperative leads projects astray. Developers waste huge sums of time and effort running code through endless minor variations with diminishing returns. There is little value testing every trivial feature adjustment to death. And users grow frustrated with delays and restrictions as programmers obsess over comprehensive testing. Pursuing flawless software typically proves counterproductive as no system is ever perfect – the goal should be usable products that can be iteratively improved.
• The assumption that employees should be worked to exhaustion is clearly unsound. People do not enjoy unsustainable workloads and unreasonable deadlines. Pushing human resources to the brink often backfires rather than driving engagement and satisfaction. There are better ways to attract and retain talent than by running staff into the ground. And tired, overwhelmed personnel tend to see plunges in output and quality. Straining human endurance typically fuels turnover rather than powering success.

Many more detrimental assumptions can be found detailed in my book “Quintessence“.

The lesson is clear – we might choose to constantly surface and reflect upon ingrained assumptions before they lead us off a cliff. Momentum can quietly build behind outdated modes of thought right until environmental shifts expose systemic brittleness. As markets transform, so too must the underlying mindsets guiding business decisions.