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.

Diego Rodriguez of Metacool, my mentor in this
blogging madness, had an intriguing post recently about the power of
simplicity. Diego described the stunning simplicity with which Associate
Supreme Court Justice Sandra Day O’Connor described the ideas on the U.S.
Constitution. Diego’s post reminded me
of something that organizational theorist Karl Weick always talks about when he
describes the stages that people go through when they make sense of overwhelming
events or ideas. To quote Weick, “people
often go through at least three stages when they deal with the inexplicable:
superficial simplicity, confused complexity and profound simplicity.” Weick explains that our first reactions to
events or a body of knowledge is to develop dangerous oversimplification,
usually wrong and downright destructive. Then we face the difficult stage of realizing that we are
oversimplifying things, which means that we are flooded with confusion and develop
excessively complex ideas and solutions. After what can be years of struggle with the complexity, some people
develop the ability to identify and explain to others what really matters. 

Sandra Day O’Connor has reached this level of
wisdom with the law, as Diego shows, and it is sight to behold when it happens
– so long as you realize that there is also danger in listening to
such gifted people because they can make things that are very hard to learn look
very easy. Weick applies this
perspective in his lovely online essay Leadership
When Events Don’t Play By The Rules, but this is just one example, it can
be applied to almost any problem where there is overwhelming information or emotion.  Or if you want to go to the original source, see William
Schutz’s book Profound
Simplicity – which is out of print, but you can get used copies on
Amazon.