the Bullwhip effect in Leadership

To get you in the right mood. Imagine you're Indiana Jones or another bullwhip-cracking champion: A little effortless movement of the wrist on the bullwhip's handle puts the thong in motion, makes the fall swing, and lets the popper crack.

This is no blog post on applying whips as a means to an end to drive engagement, responsibility, productivity, or high performance. I am sorry for those toxic leaders who had hoped to find an ally in me.

Let's get to the point.

You might be familiar with the supply chain phenomenon called the bullwhip effect. Small changes in demand get amplified as they move up the supply chain from retailer to manufacturer, leading to excess inventory, poor customer service, lost revenues, inefficiencies, and higher costs.

In leadership, that exact mechanism applies. Imagine your organization and how an idea, an impulse, a suggestion, a thought, or a brain fart voiced by the founder or a senior exec of a company, ripples out through the organization. The bullwhip effect puts things in motion with just a few words, far behind what the leader intended. People run with it, take it seriously, drop everything, give their best, and prove their worth. Cool! People are engaged, and they go for it!

This works well in a start-up, as the length of the communication lines is limited, and feedback tends to be instant anyway. The whip is short and has a limited range and potential effect. In a start-up, short communication lines and the fast flow of ideas and actions contribute to the venture's agility. Long live the charismatic leader who generates ideas and initiatives by the dozens. We're alive!

However, as the organization scales, the number of layers increases, the number of people involved, the number of hand-overs, and the length of the communication lines grows. Impulsiveness at the top - at the whip's handle - impairs effectivity and productivity. The whip has become a bullwhip, with a long thong and fall.

Before you know it, well-intended suggestions at the top ripple out through the organization, distracting people from what is essential, making them switch directions overnight, losing oversight, and making them dizzy, confused, disoriented, disengaged, and unproductive long after the initial impulse was given—the bullwhip effect in all its glory.

And the leaders wonder why we can't get anything done around here.

Like in the retail supply chain, some practices can keep you away from the devastating bullwhip effect in leadership.

Keep calm!

If you behave impulsively, the whip will go crazy. If you keep calm and reflect on the possible effect of what you're about to throw out, the chances of triggering hectic behavior throughout your organization are limited. Slow down to speed up. I know forces are against us. Social media and endless notifications overload us with impulses and FOMO, tempting us to live the delusion of the day and infect our organization. Please don't import this insanity into your organization. Remember, you have the handle of the whip; any small movement of your wrist ...

Context, Context, Context, Communicate, Communicate, Communicate

The leader's number one responsibility is to provide context. How do things fit into the bigger picture? An avalanche of ideas is great if they get their place in that bigger picture. What's the urgency and goal, and how does it position versus all the other ideas and initiatives? Is now the time to take this idea or initiative on by chance? What will we not do to free up time and resources to invest in this initiative?

3x context & communication suggest consistent repetition of coherent messaging. Indeed, it is insufficient to inform your direct reports or the people you coincidentally run into at the coffee machine. It takes intentional and repetitive communication with all involved. And don't forget to apply a healthy mix of synchronous and asynchronous communication.

Limit Work In Progress

In the supply chain, minimizing lead time is one key measure to reduce the bullwhip effect. One of the most effective ways to shorten lead time is to minimize the number of things you do in parallel (work in progress and batch size). People are bad at multitasking. It's a law of nature, like gravity, so why do we continue to fight it?

Stay Nimble

Communication patterns change as organizations scale. As organic flows have limits, leadership must implement effective communication and decision-making mechanisms without going overboard on process and bureaucracy, which kills agility. The need for innovation and quick decisions in response to change is key, no matter the organization's size. To stay nimble, embedding feedback loops in the ideation and decision-making flow while stimulating cross-functional collaboration and pushing decision-making to the lowest responsible level in the organization is good practice.