Category: Evidence-based Management

Professor
and Organizational Psychologist Rob Briner from the University of London (Pictured to the left) has a
great interview in People Management  this month called "Tried
and Attested."   He is an articulate and compelling guy;
take this quote:

"Management fads are attractive, as they promise to deliver a lot and do
it fast. The alternative approach of a careful, sober, systematic consideration
of the problem, potential solutions and the evidence can seem, in contrast,
both boring and too slow. From the snake-oil salesman or quack to sub-prime
loans and fad diets, we show a strong preference for the quick fix. On the
other hand, if it seems too good to be true, then it probably is. Empowerment,
TQM, excellence, downsizing, emotional intelligence, business process
re-engineering and, my current personal favourite, talent management, are just
some of the fads that have been rapidly adopted and, as many observers have
argued, probably done more harm than good. Fads and fashions are also confusing
to managers because they offer completely contradictory advice."

He is singing my tune. I believe strongly in creativity and experimenting
with new ideas, but I get very skeptical when someone claims that some new idea
– or even an old one – will solve all your organization’s problems. And I am especially skeptical of breakthrough
ideas.  One of the most interesting parts of writing Hard
Facts, Dangerous Half-Truths, and Total Nonsense with Jeff Pfeffer (which
took about five years) was our long and unsuccessful search for breakthrough
management ideas.  The best summary of why people claim to have breakthrough business ideas probably came from Stanford Professor
Emeritus James March (probably the most prestigious living organizational theorist).
When I wrote him and asked if he could think of any breakthrough management
ideas, he wrote back that “most claims of originality are
testimony to ignorance and most claims of magic are testimony to hubris.”

Indeed, it is interesting that one management book after another seems claims
to have a breakthrough idea, while one Nobel Prize winner after another (we
read a lot of their acceptance speeches when working on the book) is careful to show that his or her ideas are simply a careful extension of prior work completed by others.

The comment from March (plus my
unfortunate experience in academia and business where mediocre scholars and
business gurus are constantly claiming that they deserve credit for ideas
that have been around for decades) led me to propose Sutton’s Law: “If you think
that you have a new idea, you are wrong. Someone probably already had it. This
idea isn’t original either; I stole it from someone else.”

P.S. We’ve got more of Rob’s work posted at www.evidence-basedmanagement.com, including a quiz to  help determine "how evidence-based are you?"

Check-out this insightful article that we posted over at our website Evidence-Based Management. As Jeff Pfeffer puts it so well:

"We have just posted an amazing article by an Israeli professor that has
some fascinating material on how things went so wrong for the Israeli army in
its recent struggles in Lebanon. The article highlights the importance of
assumptions, mental models, and mind sets as crucial to making better and
better informed decisions."

The article is by Raanan Lipshitz and here is the abstract: 

"This paper argues that the
Israel Defense Force (I.D.F.) failure in the second Lebanon war can be partly
attributed to commanders mindless and insufficiently critical decision making
processes at the individual, group and organizational levels, or the platoon/tactical,
division/operational and GHQ/strategic levels. Four cases are analyzed. The
first three cases confirm the proposition during planning and opening stages of
the war. The fourth case tests confirms its validity during the war’s second,
ground campaign phase. The paper presents an inclusive psychological
conceptualization of decision making that is radically different from the
calculative conceptualization that underlies mainstream decision research. The
descriptive and prescriptive implications of the paper’s findings and the model
that it presents generalize beyond the second Lebanon War and Military Decision
Making to decision making in business and the conduct of decision research."

That is the translation of the French version of Hard Facts. The complete title (see the comments in the prior post; thanks to everyone for sending them in) is something like "Facts and Bullshit about Management: A systematic method to demolish dangerous half-truths and stupid beliefs that often poison organizational life"

I like that title; it is easier to remember than the English title: Hard Facts, Dangerous Half-Truths, and Total Nonsense. And it is more fun. 

The book that Jeff Pfeffer and and I published last year on evidence-based management –– Hard Facts, Dangerous Half-Truths, and Total Nonsense — is coming out in French in a few months. My editor Marie-Pierre from Vuibert (who also worked on the French version of The No Asshole Rule ) sent me a picture of the cover last week.  I like the way it looks, but does anyone know what says?  Please forgive my ignorance.

P.S. Pfeffer and I also have a website on evidence-based management if you want to dig into the topic more.

I am constantly amazed and bewildered by what spreads on the web and what doesn’t.  And now I am bewildered by when ideas spread.  Consider a post that I put up here in February (which is a thousand years ago in blog time, from what I can tell) called Why Specialists are Grumpy and Generalists are Happy.  This post describes one of my favorite paragraphs ever written in an academic journal, by the University of Michigan’s Karl Weick. It got picked here somehow, and over 1200 people have stopped by to see it today. I actually don’t even know what this site is — hacker news or something.  But I love this quote so much that I am glad to see it getting recycled and seen by new people.

You can read more about it in the original post, but here is Weick’s inspired paragraph if you just want to see that:

Generalists, people with
moderately strong attachments to many ideas, should be hard to
interrupt, and once interrupted, should have weaker, shorter negative
negative reactions since they have alternative paths to realize their
plans. Specialists, people with stronger attachments to fewer ideas,
should be easier to interrupt, and once interrupted, should have
stronger, more sustained negative reactions because they have fewer
alternative pathways to realize their plans. Generalists should be the
the upbeat, positive people in the profession while specialists should
be their grouchy, negative counterparts (page 526).

P.S. This is from Weick’s article in the October 1989 Academy of Management Review article called "Theory Building as Disciplined Imagination."  Here is the abstract and a place to buy it, if you are really curious.

Here is another cover that I can’t read. Our Russian publisher just sent Jeff Pfeffer and me the proposed cover for the Russian translation of Hard Facts.  The colors suggest their "red" past has persistent effects on design choices.  I like it.

This quote comes from "Bill and & Dave’s Memos: A Collection of Bill Hewlett and Dave Packard’s Writings", a book that was edited by Albert Yuen and assembled with help from Karen Lewis, HP’s longtime archivist. It is credited to Bill Hewlett (who is standing next to Dave Packard in the picture).

The book doesn’t exactly have an organized plot and some of the memos aren’t exactly exciting — Hewlett and Packard  weren’t known for their charisma, just their competence.  And if you want to more complete story about HP, I recommend Michael Malone’s recent book "Bill & Dave," but as we saw in Dave Packard’s 11 Simple Rules, reading the original writing and speeches from these two guys provides a fascinating and unfiltered view of how HP used different such practices than most companies did then and do now. 

The most striking thing to me is that Bill and Dave often articulate such a different set of assumptions about what motivates human behavior, the purpose of a business, and how people ought to be treated. The statement by Bil Hewlett about the "low man" starts of the section on "Managing in Tough Times,"  and was used in his speech about why — during a downtown in 1970 — HP elected to give most employees a Friday off every two weeks (and thus pay them for only 9 instead of 10 days) instead of doing a 10% layoff. Hewlett emphasized that because everyone from him to the janitor got the same percentage in the profit-sharing plan at time, that the same principle of equality should be applied during hard times as well. And he talked about how everyone would need to work to stop overtime expenses and expenses generated by temporary workers. He did discuss some exceptions, notably a plant that has massive back orders, where it made no sense to give people every tenth day off.   Although HP certainly paid different amounts to different people in those days, this essay is striking because it seems to me that most companies go after the "low man" (or "low woman") first when times get tough.

Moreover, although Hewlett’s perspective is rarely articulated and acted by executives (and indeed, in this era of worshiping star employees, many companies  articulate and act on the opposite values), recent evidence supports the idea that laying off employees during a downturn is a bad idea, especially in a high tech firm,  It turns out that the costs of getting rid of excess employees, waiting for an upturn, and then hiring a new batch of employees often exceeds the cost of avoiding layoffs and waiting for an economic recovery. 

Check out the Bain & Company study on “Debunking Layoff Myths” that I’ve talked about before. They examined S&P 500 firms during 2000
and 2001. Bain found that it usually takes companies 12 to 18 months
before the financial benefits of layoffs kick-in, because of severance
costs and less obvious costs like the negative effects of layoffs on “survivor”
productivity.  By the time the savings can be enjoyed, the economy often begins to rebound, so companies then spend money hiring a new batch of employees. And those new people often have skills much
like those who were sent packing.  According to Bain, such “binge and purge”
employment practices are often misguided ways to control labor costs, especially when companies do knowledge intensive work.

The upshot is that HP’s approach may not only have been humane, it is consistent with some modern evidence.  Of course, some hard times stretch out too long to avoid layoffs and some companies have too many employees even for the good time. So the old HP approach will only work if you already have the kind of people that you need, but you just have too many of them for now.

This is one of those 50Lessons videos, where they ask an expert to make a series of short comment on several aspects of management.  They are now running these on The Times of London’s website, including one on The No Asshole Rule that was filmed before the book was written   They just put one up today with, Jeff Pfeffer, my friend and co-author. As usual, Jeff is proactive and evidence-based — and absolutely fearless about about naming the names of people and companies. Jeff, for example, lumps together Enron and GE in making his arguments in a manner that I find funny, disturbing, and as always, annoyingly logical.  Check out: Professor Pfeffer: Why We Would Rather Lie Than Be Associated With Failure.

I’ve written before about C.K. Gunsalus’s  compelling and useful book The College Administrator’s Survival Guide.   It is a great book that should be read by every college or university administrator — or anyone who wants to become one (plus I love the cover and can’t resist putting it up here again, that poor guy looks like he is in so much pain).  Tina continues to come-up with all sorts of gems about administration (she is one of my email pals), many of which apply to companies just as well as colleges.  Check out her post on the Harvard Press website, which considers the question: Are the the top leaders of today’s universities increasingly corporate and narcissistic?  I am not sure that simply being "corporate"is bad, as the private sector has some splendid leaders, but I agree completely that leaders who suffer from relentless selfishness and hubris are a terrible thing for universities or any organization. Check out Tina’s post. To warm you up, here are two of my favorite gems:

"My current favorite academic
oxymoron is “emergency strategic plan.”  What, exactly, is such a
beast, especially as they tend to be developed following the advice of
external consultants, and have remarkable similarities?"

And:

"The days of the reluctant
academic leader—an accomplished scholar who took on the role to serve
the institution or to give something back—what we used to call the
servant-leader, have been washed away in a tidal wave of narcissistic,
corporate-style leaders.  Characteristics of these leaders include
highly personalized “branding” of leadership, often complete with a
theme or tag-line and much publicity for the leader’s individual
virtues.  Web pages often prominently feature images of the leader,
including events where the leader has recently been feted or
headlined."

Tina’s observations are backed by a study
published in 1997 in the Administrative
Science Quarterly by Mathew Hayward and Donald Hambrick.  These researchers concluded that CEO hubris
led companies to pay excessive amounts when buying firms, which in turn
undermined long-term financial performance. The two examined the
"acquisition premiums" (the amount paid above the listed stock price)
paid in 106 large acquisitions. After ruling out numerous other competing
explanations through multiple regression, they found that firms led by apparently
"self-important" CEOs – those who were getting a lot of press, giving
a lot speeches, and that had enjoyed a recent surge in stock price — consistently
paid larger premiums.

So, hubris is not
only a bad thing in academia, it does plenty of damage in corporations too.

P.S. Many of you will also think of Jim Collin’s blockbuster Good to Great when you read these findings, and indeed, the message is similar to his argument and (modest) evidence about Level 5 leaders, those relentless and selfless leaders who are driven to do what is best for their companies rather than best for themselves.  I think that the strength of Collin’s evidence is overrated, but the message is on target and supported by much research (even though almost none of that research was mentioned by Collins — the book is a brilliant piece of writing and I believe has done much good, but the claims about the quality of the evidence and originality of the ideas are overstated).

P.P.S.  Also, forgive my cynicism, but since this hugely influential book came out, I have developed a hypothesis I would love to see tested:  LEADERS WHO TELL YOU THAT THEY ARE LEVEL FIVE LEADERS ARE RARELY IF EVER LEVEL FIVE LEADERS.