The Problem with DAN

We have written on the problem of senior executives and entire management teams ignoring problems in their businesses. We have tried to make sense of this problem with a variety of theories which, admittedly, none of which seem to resonate or strike us as compelling. This phenomenon for sure exists. We have simply not been able to explain easily it or put pithy nomenclature around it.

In October of this year, our Principal, Mark Gavoor, was at a dinner meeting of the local Chicago area IMA (formerly Institute for Management Accounting). The featured speaker was Thomas Gray, a Certified Turnaround Professional and management consultant. Tom's focus is on helping small business owners save and grow their companies. He gave a very compelling presentation on the challenges he faces in helping small businesses turnaround. First and foremost, the greatest challenge he faces is to convince the owners or leaders of these businesses to realize they have a problem. The earlier they admit to their problems the better the chance to save and turnaround the organization. The second major challenge is to get them to do something about this problem. Another challenge in this regard.

Others can see the problem or issue. People in the organization have voiced their concerns and have either been ignored or belittled. So, they do not talk about this to the leader/owner and merely grumble about it with their peers. Any number of consultants may have been

Tom then noted the refusal to admit that there were problems and then to take actions to eliminate the problem can all be blamed on DAN. DAN is not a person. DAN is rather an acronym for personality traits exhibited by the leaders and owners that make these challenges so substantial.

DAN stands for Denial, Arrogance, and Nostalgia.

This is exactly what we have been looking for: a clear quick way to classify and explain this phenomenon.

Denial: This is the thing we see most often. It applies in personal lives and organizational lives. Whether one is an alcoholic or if their company is suffering from chronic poor customer service, the first and biggest step one can take is to admit they have an issue or problem. This simply means one have to overcome their denial. They have to stop being an ostrich and admit the shortcoming. None of us feel comfortable doing this. Admitting a shortcoming, issue, or problem is never easy. We all believe it reflects badly on us. Nevertheless, it is what it is. Denial will never solve the problem. These kinds of issues never heal themselves. On the contrary they tend to gradually get worse until they are seriously damaging the business.

Arrogance: Hubris may be the reason most leaders and owners do not admit that anything is wrong with their business. The business is their baby. They created it and they are proud of it to the extreme. Therefore, there cannot be anything wrong with anything they created. That would mean that there might be something wrong with them. That is just not possible.

The other kind of arrogance is the failure to admit that help is needed. In this case, the leader or owner believes they can fix things themselves simply because they had originally created what is now broken. They also created and grew the business. Everyone looks to them to lead and set policy and direction. They enjoy this role. They enjoy telling others what to do and how to do it. Being helpless and needing guidance from others is not what the are used to and they certainly don't like it.

Maybe consultants were brought in to help. If their diagnosis and prescription for improvement gets close to implying that the leader/owner is a large part of the root cause, this arrogance might well take over. When this happens, the consultants are summarily dismissed and admonished within the company for not understanding the nature of the issues and the culture of the organization.

Nostalgia: This is the case were the leader or owner is stuck in the past. It is a special past. It is the time when the current business processes were fresh and new. It was when those business practices and processes were cutting edge and worked wonderfully. The problem is that those business practices, processes, and management styles are no longer cutting edge or state of the art. They worked wonderfully then because of the market conditions of that time. Those business practices, processes, and management styles are simply sub-optimal for the todays market and competitive environment.

DAN provides a great framework in which to discuss why the leaders and owners have not solved their chronic issue. The issue still remains as to how to get them to seek out help to one and for all solve these chronic problems and issues. Unfortunately, this is probably more in the realm of art form or sales technique than anything else. It is definitely situational and based the personality of the leader/owner and the person delivering the message. This much is clear. The framework around this are much less clear.

We would love to hear how you have had success in this arena.