Category: Evidence-based Management

The
importance of identifying and testing the assumptions that determine how
organizations and technologies are designed sounds so obvious – yet we’ve
learned that, when we don’t press managers, consultants, and researchers
(including ourselves) to take a hard look at their deeply held beliefs about
what they are doing and why, they will unwittingly do horrible – or at least
very expensive – things over and over. In the management arena, the assumptions held by people who design
organizations are often dangerous half-truths. So, for example, assuming that human beings are always selfish and can’t
be trusted is dangerous because, if you operate on that assumption, you will
design a fear-driven organization that will encourage people to act that way –
and never give people a chance to earn trust.

Another area is teacher incentives and student
test scores. Politicians and school
administrators often argue that teacher’s pay should be linked to student test scores. That all sounds wonderful, until you start
examining the basic assumption: If teachers work harder, their students will do
better on standardized tests. Unfortunately, if you dig into this assumption, you will start realizing
that teachers have little or no control over which students they teach, how
many students are in their classes, what levels of resources they have, and
what materials they use.  So, even if
financial incentives do actually encourage teachers to work harder (another
suspect assumption), increasing motivation doesn’t increase student performance
much, if at all, because teachers don’t have enough control over the work. And,
at least in the short-term, incentives don’t affect teacher’s knowledge and
skill.

That
is why studies going back nearly 100 years show that teacher incentive pay has
little if any impact on student achievement scores. It does have other predictable
effects: teachers and school administrators will try to change things that
they can control: Like cheating on the tests to get their students higher
scores, either by changing the forms themselves or telling students the right
answers. And, as I’ve heard from researchers and parents in the Chicago school
system, teachers respond to these incentives by moving their weakest students
into special education classes (which are overflowing with kids who really
aren’t well-suited to those classes) and when they have a gifted child who
should probably skip a grade or move to a classroom or school of gifted kids,
they squelch efforts to take those kids out of their classes. In other words, the incentive pay does affect
teacher effort: They focus on ways to get their test scores up that they can
control, even though those changes have nothing to do with student learning,
and in fact, may actually undermine learning. Yes, incentives do drive behavior, but sometimes the wrong kind (See
Chapter 5 of Hard Facts for an
in-depth discussion of incentives).

What
does this have to do with escape from submarines? Perhaps the clearest, and most troubling,
case I know of a deadly assumption (that was held for over 50 years) has to do
with the problem of escaping from a sunken submarine. C.B. “Swede” Momsen was a colorful and
charismatic U.S. Naval officer who unwittingly perpetuated false and deadly
beliefs about the best way to ascend to the surface. Check out The
Terrible Hours to read about this maverick. Momsen was deeply disturbed by
several incidents where submariners were trapped at depths of 100 to 200 feet beneath
the surface, with no apparent means for escape. They all died waiting for a rescue that never came. “Swede” dedicated years of his life to
developing the Momsen lung in the 1930’s, a complicated apparatus that –- by
the time development was completed — included a mouth piece, a breathing bag,
a canister of soda lime, goggles, a nose clip, and a marker buoy attached to
500 feet of rope that had a knot every ten feet. The idea was “Escaping submariners were to
pause every ten feet, where they found a knot, so as to ascend no faster than
fifty feet per minute.”  The Germans had
used a similar device called the Dräger breathing set, going back to World War
I.

The
perceived need for these cumbersome devices – and the actions of people on
submarines –were based on the assumption that simply exiting the submarine and
swimming to the surface meant certain death. But research done after World War II showed that this assumption was
false: at depths of less than 300 feet, a trapped submariner’s best chance of
survival was a “free ascent.”  As Ann
Jensen’s 1986 article Why
the Best Technology for Escaping from a Submarine is No Technology reports:

The solution was a British suggestion. Inflate a life jacket while
in the submarine. The jacket would be designed with a flapper valve to release
the expanding air as it carried its wearer upward. “Once you’re out, you start
blowing as hard as you can blow,” said Schlech. “The jacket takes you up and
out of the water like a shot. We called the system ‘Blow and Go.’ There was a
lot of opposition at first, but eventually it got rid of the Momsen Lungs and
all the other equipment, and it’s still in use in depths of up to three hundred
feet.”

Moreover,
Jensen reports that German experience going back to World War I showed that –-even
without a life jacket — simply exhaling while making the ascent is effective
as well, although such experience was not known or was ignored as research focused
on developing better devices for escaping submarines, even though none were
needed. To quote Jensen’s article:

The case of the German U-57, which hit a
mine north of Scotland
in 1915, is typical. The U-boat went down in 128 feet of water with twenty men
alive inside. The air in the submarine quickly filled with chlorine gas as
seawater flooded the boat’s electric batteries. The fumes burned the men’s eyes
and made breathing nearly impossible. Their ears ached as pressure increased.
They found only four Dräger units aboard; believing their situation hopeless,
two of the men shot themselves. Then the captain decided to make one last,
desperate effort to save the remainder of his crew by opening a hatch.

To his amazement the hatch flew open and he was drawn out and
upward. He had no time to inflate his life jacket or even to take a breath. As
he recounted later, “I had no desire to inhale, but to forcibly exhale so that
I constantly had to blow air out.” The air in his lungs had expanded as he
rose. If he hadn’t exhaled, his lungs probably would have burst. The rest of
the crew followed him; seven survived the ascent and were later picked up.

The
upshot is that –- whether you are talking about teachers or technology –-
stopping to identify and test your assumptions is something that isn’t done
often enough, and can save a lot of money and a lot of lives. And a related
lesson, as I’ve written about before, is that the most effective people and
organizations are often masters
of the obvious.

I mentioned Rakesh
Khurana’s book Searching
for a Corporate Savior in my last post. After I wrote it, I realized that
Rakesh may have found an instance of Lovaglia’s Law: "The more
important the outcome of a decision, the more people will resist using evidence
to make it."

Rakesh’s book is so compelling because he blends
impressive quantitative data with insights from his in-depth research on how
senior executives are selected and evaluated by corporate boards. Rakesh described how directors of huge
companies had enormous faith in the power of CEOs that went beyond anything
that could be justified by any research, how they spent vast amounts of money
and time searching for new corporate saviors, and paid out huge sums to
executive search firms and to the CEOs they ultimately hired. Following Lovaglia’s Law, perhaps because
these decisions were so important, Rakesh found that when he asked corporate
directors if CEOs are worth all that money, they reacted with anger and
surprise, as if he had raised a taboo subject. He found that they had
“virtually religious” convictions on the subject, which led them to dismiss any
evidence showing that CEO quality is not a primary and powerful cause of company performance.
My hunch is that they would have been more receptive to evidence about more
trivial decisions, such as what colors to paint the walls or what music to play
in the elevators.

Today’s
Wall Street Journal contains an
entertaining story about the recent financial setbacks suffered by hedge fund
manager Robert Chapman. It makes for good reading, as Mr. Chapman is quoted as
saying that “We serve eviction notices to incompetent executives” The Journal reports how Mr. Chapman once
described the 78 year-old Chairman of a company as a “helpless Mr. Magoo-like
character" and its CEO as “The Dummy.” And they tell us that “Mr. Chapman’s office features a toy guillotine, a
shark skull and other symbols of gruesome destruction.”

Whether
Mr. Chapman is an effective intimidator and turn around artist is unclear at
the moment, but what struck me about the story was that it was yet another
indication that CEOs, or perhaps CEOs and their top teams, are treated as the
most powerful factor that drives organizational performance. The message in the business press – and from
headhunting firms too – is that if things are going good, than it is because a
company has great leadership. And if things are going badly, then it is largely
because of bad leadership – so if you replace the CEO or perhaps the senior
team (serving them with “eviction notices”) then everything will be fixed. As we show in our leadership chapter in Hard Facts, a related conclusion is
accepted by economists like Michael Jensen, who argue that if you get the CEO’s
incentives “properly aligned” with organizational goals, then, boom,
performance will improve because they will be properly motivated to act in the
firm’s best interest.  Indeed, many experts who draw
on economic perspectives like agency theory complain that the problem with CEO
pay is that they are paid well when things go wrong or right, and if companies
would just provide CEOs with the right incentives, then the CEO pay controversy
would – or at least should — go away.

The
problem with these arguments is that they all are based on the assumption that
CEOs have a lot of influence over performance. After all, if CEOs didn’t have much influence, tying their rewards to
performance or getting rid of bad leaders wouldn’t matter much. It is
instructive to compare this unwavering faith in the power of CEOs with the best
evidence. Yes, leaders do have some
impact, but far less than most people think. My colleague Jeff Pfeffer published a paper in 1977 in the Academy of Management Review showing
that leader’s actions rarely account for more than 10% of the variation in organizational
performance, and often, account for much less. Subsequent studies have confirmed this general pattern. Leaders do have
a somewhat stronger effect on performance when companies are small and
young. But a host of experiments and
field studies show that the business press and other observers consistently
give leaders far more credit and far more blame than they deserve. Apparently this
happens because people are brainwashed by cultural myths about the power of
leaders and because it is requires less mental effort – and is more comforting
– to view, say, Procter & Gamble as AG Lafley or Oracle as Larry Ellison, then to think about the long list of factors that actually cause performance.

Jeff
Pfeffer emphasized that leaders have, at best, modest control because there are so many
factors that are simply impossible for them to control – economic conditions,
industry structure, fixed costs, what competitors do, what happened before the
CEO took over, and what a nuances of what the other hundreds and thousands of
people in the company do. A few years
ago, I was talking with Spencer Clark, a former GE executive who had led a
large business during Jack Welch’s reign about the limits of CEO power. Clark  remarked “Jack did a good job, but everyone seems
to forget that the company had been around for over a hundred years before he
ever took the job, and he had 70,000 other people to help him.” Indeed,
although CEOs can certainly make a difference, especially founders, many of the
greatest companies – take Toyota
or Procter & Gamble – have succeeded because they have such great systems
that it makes it easy for competent people to succeed, not because of the work of leaders with magical powers.

Another
reason that leaders don’t have as much effect as most people think is what
statisticians call “the restriction of range” problem. Although, as Mr. Chapman
says, evicting incompetent leaders is no doubt important, some researchers –
notably Stanford’s James March – have argued that nearly all people that are seriously
considered for senior management positions are competent (as they are heavily
screened, trained, and all have shown that they can do the work) so it doesn’t
make much difference which finalist you choose. March, the master of challenging conventional wisdom with logic and
evidence – and his charm – once wrote:

Management may be extremely difficult and important even though
managers are indistinguishable. It is hard to tell the difference between two
different light bulbs also; but if you take all the light bulbs away, it is
difficult to read in the dark. What is hard to demonstrate is the extent to
which high performing managers (or light bulbs that endure for an exceptionally
long time) are something more than one extreme end of a probability
distribution generated by essentially equivalent individuals

March’s
perspective is bolstered by evidence that corporate boards place irrational
faith in magical superstar CEOs, as a savior who will ride in on a white horse and transform a struggling company
into an industry leader. See Rakesh
Khurana’s lovely book Searching
for a Corporate Savior for some of this work.

What does this all mean in practice? There are a
lot of nuances, but the most important implication is that bringing in
a new CEO is rarely a magical quick fix. Executive search firms love CEO
changes –especially external hires – because they make money on each search and
hire. But the weight of the evidence suggests that bringing in a new CEO
doesn’t help that much, often makes
no difference at all, and can even do moderate damage.

Venture capitalist Steve Dow is one of the few
people in industry I’ve talked to who actually seems to get and act on this
evidence. As we wrote in Hard Facts:

Start-ups have notoriously high failure
rates, no matter how well they are managed. Dow has been a general partner at VC firm Sevin Rosen since 1983 and served on
dozens of boards over the years. He tells us that many board members,
especially young venture capitalists who lack operational experience, are quick
to talk about replacing the CEO at the first hint of trouble. Dow asks them,
“Now, suppose you were CEO, what would you do differently than the one we have right now?” Dow
says that most of the time they can’t think of much, if anything, they would
change. Like everyone else, until they think about it carefully, these venture
capitalists can’t separate the CEO’s performance from the firm’s performance.

Michael Lovaglia
is a Professor and Department Chair in the Sociology Department at the Iowa. Michael wrote Jeff Peffer and me a charming and
insightful email a few weeks back about evidence-based management that I can’t
stop thinking about.

Michael proposed:

Lovaglia’s
Law: The more important the outcome of a decision, the more people will resist
using evidence to make it.

I can’t stop thinking about this law because, although it
sounds like a joke, if I think about the basics of sociology, economics, and
psychology, many signs are that Michael is right.  Sociologists are really obsessed with power
and status. The upshot of much of their work is that, the more is at stake, the
more that people will be motivated to push for solutions that increase their
power and decrease other’s power – and not motivated to take steps that help
other people or other groups, let alone that help the system as a whole.

The concept that drives much economic research is
that people strive to do what is in their individual self-interest (Indeed, some
people claim that there is no underlying theme in Freakonomics.
I always beg to differ because each chapter is a brilliant example of how Steve
Levitt has applied the concept of self-interest in a different setting.) Clearly, the more important the decision, the
more people involved stand to lose and gain, and the more strongly they push for outcomes that enhance their
self-interest rather than are best for everyone involved.

Finally, psychologists have documented many ways
that human decisions are flawed, swayed by biases rather than rationality (see
Max Bazerman’s book on decision-making)
whether the decision is important or not.  But if you look at research on what happens to
human beings when we are under stress, a host of studies show that we cling
even more tightly to what we know and can do best, and that is especially hard
for us to process unfamiliar ideas and to change how we do things when we work under severe time pressure and public scrutiny or when the stakes are high.

A partial, and paradoxical, solution is implied by
Karl Weick’s work on small wins (see my last post): If important decisions
provoke so much greed, distress, and irrationality, it might be best to try to reframe big decisions as small ones –- to fool yourself and others into
believing that what seems big is really small!   I
confess, this is one of those ideas that sound really dumb when you start applying it: How would you convince the
players in the Lebanon
nightmare that, actually, the terms for the cease-fire really aren’t all that
important?  Pretty stupid, huh? But it may prove more practical in everyday decisions made by organizations: who to hire,
what business strategies to pursue, what products to release, and so on. Perhaps framing
them as less important to performance than they actually are can increase your success
rate!

I throw out this weird idea for fun; I am not sure
I believe it.  I also confess that part
of me doesn’t want to believe it even if it is true.  But if Lovaglia’s Law and my fretting about
basic behavioral science theory are right, then it just might work.  Perhaps it is time for a management book called something like "It Doesn’t Matter: The Power of Indifference." I think I am joking about that, but I am not sure.

Jared Sandberg has a nice little discussion of the problem of working for a "yes man" in his Cubicle Culture column today in the Wall Street Journal. He was kind enough to interview me for it, and I found him to be an unusually smart — and straightfoward — journalist. In his column,I talk about how one problem with working for someone who says "yes" to everything is that their subordinates end-up doing lots of things, but without the time to do anything well. Plus I describe some of the research on innovation reviewed in Weird Ideas That Work that shows how some of the most creative people in organizations routinely ignore and defy their bosses.

I talk about the problem that subordinates face when their bosses insist that they implement some program or plan that is clearly a bad idea. To expand on that point, if arguing the facts with your boss doesn’t work and you don’t want to quit your job or get fired, sometimes the lesser of multiple evils is to strategic incompetence.

As Jeff Pfeffer and I wrote in Hard Facts, “Unfortunately, as we’ve seen, many managers and other employees face pressures to do things that aren’t just untested, but are known to be ineffective. In such cases, a challenge, a genuine moral dilemma can arise because, if they follow orders from superiors, people can knowingly harm their organizations, colleagues, and customers. We hesitate to recommend what might be called “evidence-based misbehavior.” But a case can be made that when leaders are wrong – and people don’t have the power to reverse their commands – that ignoring orders, delaying action, or implementing programs incompletely may be best for all involved.”

We go on to show how people trapped in such predicaments sometimes feel as if there is no other alternative to such passive resistance.  As we describe, I once spoke with the superintendents of two large school districts who were instructed to implement educational policies to “end social promotion”, policies that would result in flunking more kids.  These policies that have been shown in numerous studies to undermine both educational achievement and student graduation rates.

As we say in Hard Facts about these two superintendents, “So, both felt forced to go ahead and implement the policy anyway. But they were both doing it as slowly and incompletely as they could in their schools. Indeed, both explained – in defensive and somewhat angry tones — that, in perfect world that was free of politics, they wouldn’t have to act that way, but that their subtle resistance would result in the least damage to their schools and students. The message was that either they resisted that way, or they would get fired and replaced with someone who loved social promotion and would do far more harm. In short, resistance and foot-dragging isn’t always futile. A case can be made that evidence-based misbehavior is the best that you can do for your organization at times.”

Of course, this is a massively flawed soloution, but I thought that they made an interesting and persuasive argument, albeit one that does not appeal to the idealistic part of me, but one that may do the least harm in a bad situation.

P.S. I was amused to see that the Wall Street Journal editors elected not to print my assertion that working for yes men “sucks,” they censored it by printing “s—s.”  It didn’t even occur to me that “sucks” was an offensive word until I thought about it for awhile. Then I remembered that this isn’t the first time I have had that word censored by the Wall Street Journal.  The first time that I was quoted in the Journal was in 1988, and the article (about how irrevlevant much management research is to real world problems) ended with me saying “I’ve been in the real world.  It stinks.”  I was misquoted; I actually said “It sucks.” I guess they won’t be printing the name of my next book, The No Asshole Rule!

I am taken by the comments by people about my
post on Strong
Opinions, Weakly Held. Just as the
first time I heard this idea from Bob Johansen at the Institute for the Future, it strikes
many people as a compelling test of whether a person is wise or not. There is an intriguing footnote to all this
in Rich’s comment, where he points out that historian A. J. P. Taylor is
credited with a similar remark that was published in the 1970’s, describing
himself as having “Extreme views weakly held.” I also got a number of emails about other variations on this theme. I especially liked the one from Marc Garrett,
who writes since1968.com. Marc tells me the tagline he has been using
for several years is "Fierce opinions, briefly held, quietly disowned." I admire both the wisdom and the honesty in that statement.

I bet if
we dug into it enough, we could find variations of this saying that go back for
thousands of years. Certainly, the idea of having the courage to express
yourself and act, but to update your ideas when better facts and ideas come
along, goes back at least to Plato’s writings.  A lovely example of the impossibility of tracking
down who said what first can be found in a 1965 book by the late sociologist Robert C.
Merton, On
the Shoulders of Giants Merton
documents his quest to discover who first developed a saying that is often
attributed to Sir
Isaac Newton, “If I have seen farther, it is by standing on the shoulders of
giants.” As Merton shows, Newton didn’t invent this
saying. The originator turns out to be
impossible to find, as this charming book shows. Merton – with the help of many colleagues —
finds variations that go back at least 1,000 years before Newton’s time. My favorite is  “A dwarf
standing on the shoulder of a giant may see farther than the giant himself.”

The
ignorance, arrogance, and lack of humility that too often goes along with
claims of originality has led me (as I said in an earlier post) to propose Sutton’s
Law in Hard Facts: “If you think that you have a new idea, you
are wrong. Someone else probably already had it. This idea isn’t original either;
I stole it from someone else”

PS: Merton’s son, also Robert
C. Merton, won the Nobel Prize in economics in 1997 — quite a family!

The final point
that Jeff Pfeffer and I make in Hard Facts is about failure. We emphasize that is impossible to run an
organization without making a lot of mistakes. Innovation always entails
failure.  Most new products and companies don’t survive.  And if you want
creativity without failure, you are living in a fool’s paradise.  It is also impossible to learn something new
without making mistakes. A scary thought, for example, because new surgeons
have higher fatality rates than experienced surgeons – but new surgeons can
only learn so much by reading, watching others, and practicing on cadavers.  The only way to learn to do the real thing is
to do the real thing.  And every system
breaks down at times (even Toyota is having some quality missteps lately) and even the best-trained people make
mistakes at times.

Failure will never be eliminated, and so the
best we can hope for from human beings and organizations is that they
learn from their mistakes, that rather than making the same mistakes over and
over again, they make new and different mistakes.

The upshot for Jeff
Pfeffer and me is that, perhaps the single best diagnostic to see if an organization is
innovating, learning, and capable of turning knowledge into action is “What happens when they make a mistake?”
Stealing some ideas from research on
medical errors, leaders and teams can “forgive and forget,” which may be temporarily comforting,
but condemns people and systems to make the same mistakes over and over again –
in the case of hospitals, this means you bury the dead (or close the incision)
and don’t talk about it.  Or you can remember
who made mistakes, chase them down, humiliate them, and thus create climate of
fear. In such situations, the game becomes avoiding the finger of blame rather
than surfacing, understanding, and fixing mistakes (see Harvard’s Amy
Edmondson’s wonderful research on drug treatment errors for evidence on
this point).  Or you can Forgive
and Remember, which is not only the title of a great book by Charles Bosk,
it is the philosophy that the best teams and organizations use. You forgive
because it is impossible to run an organization without making mistakes, and
pointing fingers and holding grudges creates a climate of fear. You remember –
and talk about the mistakes openly –so people and the system can learn. And you
remember so that, even though you have tried to retrain people and teach them,
if some people keep making the same mistakes over and over again, then, well,
they need to be moved to another kind of job.

This brings me to
my recent episode with Amazon.  As
reported in an earlier post, I was having trouble with two of my books, where
the wrong information kept appearing and my publishers and I were having
trouble getting them to fix it.  As I
said, I wrote to jeff@amazon.com, as that
is supposed to be the CEO’s email.  I still don’t
whether it was really him who answered, but I got an immediate concerned response and promise to
look into it.  Within 48 hours it was
fixed and I got a detailed note from Mike
Frazzini at Amazon expressing concern and
apologizing, describing the steps they were taking to fix it, and inviting me
to talk with him further if I’d like. I was really impressed. As I wrote to Mike, I know it is impossible  to keep Amazon’s complex database running without
making errors, but the best that any human organization – or human-being – can do
is to respond to complaints and problems in a non-defensive way, and try to
learn from them.  They passed our “What
happens when they make a mistake” test with flying colors. The upshot of this
is that I am even a bigger fan of Amazon then when this whole episode started –
plus I wish that Jeff Bezo’s was CEO of my cell phone company!

I’ve been pretty
obsessed about the difference between smart people and wise people for
years. I tried to write a book called
“The Attitude of Wisdom” a couple times. And the virtues of wise people – those
who have the courage to act on their knowledge, but the humility to doubt what
they know – is one of the main themes in Hard Facts. We show how leaders including Xerox’s Ann
Mulcahy, Intel’s Any Grove, Harrah’s
Gary Loveman, and IDEO’s David Kelley
turn this attitude into organizational action. Perhaps the best description I’ve ever seen of how wise people act comes
from the amazing folks at Palo Alto’s
Institute for the Future. A couple
years ago, I was talking the Institute’s Bob Johansen about wisdom, and he explained that – to deal
with an uncertain future and still move forward – they advise people to have “strong
opinions, which are weakly held.”  They’ve been giving this advice for years, and I understand that it was first developed by Instituite Director Paul Saffo.  Bob
explained that weak opinions are problematic because people aren’t inspired to
develop the best arguments possible for them, or to put forth the energy
required to test them. Bob explained that it was just as important, however, to
not be too attached to what you believe because, otherwise, it undermines your
ability to “see” and “hear” evidence that clashes with your opinions. This is what psychologists sometimes call the
problem of “confirmation bias.”

Last week, I was
talking to an executive from a big software company about the virtues of
evidence-based management. I argued that, when you dig into how some of the
best companies operate, you see that there is a commitment to finding, facing,
and acting on the facts – no matter how unpleasant those facts might be.  I talked about examples including P&G,
Google, Cisco, Yahoo!, Harrah’s, Men’s Wearhouse, and one my favorites, the
home shopping channel QVC (which ranks third among U.S. broadcasters in
revenue, has a website that has grown to the sixth largest among U.S. internet
retailers, and although it is a bit smaller than Amazon, is twice as
profitable).

I also used the
example of Mark Hurd
at HP, who is among the most fact-driven executives in American business. I hesitate to bash his predecessor Carly
Fiorina as she has received more than her share of blame. Unfortunately,
however, former HP executives tell me that Fiorina declared that the merger was
complete and successful even though there was much evidence that it was far
from over – in other words, she wasn’t facing the hard facts. Mark Hurd and his
team are still working to take out hundreds of millions of dollars a year in IT
costs that persist from the unfinished merger integration. As one former HP
executive described it to me, Carly’s speech was a lot like George Bush’s
infamous “mission accomplished” speech on the aircraft carrier: Victory was
declared far too early in both cases.

The executive agreed with all this, but he complained that the idea of
evidence-based management almost certainly wasn’t original and that perhaps,
rather than devoting all this time to telling people what they already know, I
should devote my energy to finding some breakthrough ideas, some revolutionary
business practices, that companies don’t know about already. My reaction – not just to this executive, but
to this general sentiment – is that I can’t find any breakthrough business
ideas. I read Harvard Business Review’s annual list of 20 or so
Breakthrough Business Ideas closely every year, and although many are
useful and interesting, I don’t think I’ve ever seen one that was a breakthrough. Between Jeff Pfeffer and me, we’ve had three
“breakthroughs” on those lists, and none of ours are actually original either.  In 2004, one of these “breakthroughs” was “the
no asshole rule,” which my father explained to me when I was about 8 years old,
Another, in 2005, was evidence-based
management, which, of course, isn’t original with us either. 

Every claim that
I’ve ever investigated of a “breakthrough” or “revolutionary” business idea has
turned out to be either overstated or overstated. They all turn out to be old
ideas dressed in different language (see my Changethis essay for an
example).  My disgust with all this
nonsense 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. As with other bodies of knowledge,
rather than searching for instant cures or magical management ideas, the best
organizations focus on implementing what is known to work and innovate by
experimenting with new blends of existing knowledge “stolen” from other
companies and industries, or from other parts of their own company. That is why my co-author proposed Pfeffer’s
Law: Instead of being interested in what is NEW, we ought to be interested
in what is TRUE.

If you are
interested in learning about the varying ways that evidence-based perspectives
are used – and about what happens when people fail to follow sound logic and
data – I recommend Tracy Allison Altman’s Evidence Soup. I like how Altman unearths and dissects cool new studies from every corner – medicine,
education, agriculture, engineering, and management too. And I like how she
often rates the quality of evidence in the summarized studies and explains their
imperfections. After all, although
imperfect data are better than no data at all, and no study is perfect, and it
is important to understand limitations before using research to guide what your
organization or team does. Reading Altman’s
blog is like taking an ongoing course in how to make evidence-based decisions
and how to take – and evaluate – evidence based actions.