Mar

8

Every time you speak to an employee at an office of a company or government, a technician, or someone who has to manage a process/activity you have to face the "procedure" issue. Everything in the US (but in general in the Anglo-Saxon countries) is regulated by a procedure in the form of a checklist of specific actions to accomplish in order to obtain the desired output.

As an Italian, I cannot certainly advocate for the capability to rationalize and structure a process in a way that it could be managed by anyone who is provided with the necessary level of training! As a matter of fact the Italian culture makes all of this very difficult. As an example, even when you go to a restaurant in the US, the result is that waiters and waitresses apply the same procedure with regards to how a customer is served. Same way of greeting people, proposing the menu, same smiles (most of the times not really sincere), same way of managing the bill.

In terms of performance this "system" allows good average results. A good standard. But only in few cases can it provide excellent performances. A change of situation, if it is not scheduled in the "checklist," may generate confusion and bring disaster to the organization.

As an example, I went to a restaurant last week with my two daughters and I asked for a steak to be cooked without particular flavors and sauces: a simple, plain steak. I understand this is something probably very unusual here, but this is what the girls normally have in our country. As this request was not in the menu, the manager came to the table to see if that was what we really wanted. Later, much later, a steak arrived which was almost burnt. We complained and, after some time, another steak arrived in the same conditions. Comment: the chef in his checklist probably did not know how to cook it without sauces and the steak got too dry. Interestingly enough, the manager apologized and eventually she offered the dinner for free. (I will go back to that restaurant, but I'll order only what is on the menu! Actually I was surprised they even ageed to do something different from the menu.)

Other approaches, less structured and more inclined to leverage on the personality and the personal characteristics of whoever is in charge of a process/activity may generate peak performances, but lower standard/average responses. The overall characteristics of the single organizations are different. Depending on which field you are operating in, one approach could be better than the other. However, the society also reflects this different culture.

In trading we could probably experience something similar. An approach based on a number of variables to be managed with flexibility based on sometimes-qualitative assessments can bring peak performances, but lower average results. A systematic, structured approach may lead to less volatile, higher average results. In this last case, however, a specific market condition not provided in the "behavioral matrix" can bring the system to collapse. And in this case the dinner will not be for free!


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