The Management Study That Was Too Good to Be True
Years ago, I came across a study I loved.
It perfectly supported one of the core concepts I teach in CEO and manager training: Leaders are often blind to a great deal that goes on in their own organization, especially the problems.
The nature of high-level leadership is that people become less willing to give you the straight story. They want your approval, or they don’t want to seem like complainers, or they just don’t want the blame. So they tend NOT to tell you about the problems they’re seeing on the ground. That includes the nasty, intractable ones that will eventually swell to a size where they do get your attention... usually too late.
Enter Sidney Yoshida, a quality control expert whose paper “Quality Improvement and TQC Management at Calsonic in Japan and Overseas” actually delved into this phenomenon.
Yoshida presented his paper in 1989 at the 2nd International Quality Symposium in Mexico, and its findings were so striking that they are still cited widely by management gurus. Yoshida examined information flow through plants in his own company, Calsonic, and revealed what came to be known as the Iceberg of Ignorance:
100% of problems are known by frontline employees
Only 74% are known by team leaders
Just 9% are known by middle managers
And only 4% reach the executives
Neat, right?
It certainly comports with my experience. The Iceberg of Ignorance is why it’s so critical that CEOs go out and actively learn about the problems that lurk under the waterline, before their Titanic, so to speak, runs straight into them.
There’s just one issue with Sidney Yoshida’s study: There’s no evidence Yoshida existed.
God bless Douglas Dawson, who put on his detective hat and went in search of Yoshida and the original “Iceberg” paper. As you can read about here, despite contacting the Shingo Institute and conducting numerous searches, Dawson couldn’t find record of Yoshida, the symposium in Mexico, or even the text of the paper.
So while there could be some reality to the study, Dawson concludes that
the ‘Iceberg of Ignorance’ is likely a myth that has been perpetuated via the internet by well-meaning individuals and organizations, interested in using it to advance their position or agenda in business.
He further warns that
the [data], if it exists, was within only one organization and different plants within that organization. Hardly representative of the population, and therefore more anecdotal than anything.
A lesson reinforced: Skepticism about things you read on the internet, even ones that seem to have a “source,” is always healthy.
Another Objection
If we stop and really think about what Yoshida’s paper tells us, we also start to see some issues. Is it really true that frontline employees know about 100% of the problems in an organization?
I think that’s a pretty simplistic view that requires a narrow definition of what a “problem” is. The Iceberg study resonates because it aligns with a dynamic seen by almost anyone who’s worked in a large organization. But we should remember that Calsonic was an auto parts manufacturer, and that the problems in a manufacturing environment are not the same as those in a knowledge-work environment.
In a factory, problems are tangible: a part is misaligned, a machine overheats, a delivery is delayed. On a team like the ones your managers lead, the problems are often conceptual or interpersonal: misalignment on priorities, weak product-market fit, fuzzy ownership. In these cases, even the people closest to the work may not be fully aware there’s a problem until it surfaces—and some problems are better spotted from the vantage of the manager.
So while the idea of a knowledge gap up the chain is valid, the 100% figure at the bottom starts to fall apart once we consider the complexity and subjectivity of modern work.
That Being Said... The Iceberg Is Real
None of this means the basic point of the Iceberg isn’t valid.
For example, one of the tools we use at CEO-S is our Organizational Maturity Assessment. The OMA is administered by segmenting groups of managers (executive, senior, middle, frontline, for example) and asking them to give anonymous feedback on the organization across five key areas. We then look at the whole picture, assess the company’s maturity, and make recommendations accordingly.
What’s interesting is that almost universally, the CEO rates the organization most highly across all dimensions, followed by executives. Then, as you go down the organization, people’s views on culture, communication, alignment, decision making, and so on decline. The group of managers closest to the frontline almost always has the lowest (and perhaps the most realistic) view of the company’s overall maturity.
It’s another limited data set, but it does suggest that CEOs and their executives tend to look at the state of the organization through glasses more rose-tinted than the rest of the team.
This is why we urge CEOs to develop systems for hearing what’s really going on. Anonymous feedback tools are helpful, but even better are mechanisms for regular upward feedback, weekly predictions, and weekly 1-on-1s at all levels that are rooted in real trust.
Bottom line: When you’re the CEO, bad news travels slowly, unless you build a culture where candor is not only safe, but expected.
The Iceberg may not have a reliable source behind it, but like many myths, it persists because there’s truth in it. Leaders who take it seriously are more likely to steer their companies away from trouble before it’s too late.