GUEST POST from Greg Satell
Mark Twain is reported to have said, “It’s not what you don’t know that kills you, it’s what you know for sure that ain’t true.” Ignorance of facts is easily remedied. We can read books, watch documentaries or simply do a quick Google search. Yet our misapprehensions and biases endure, even in the face of contradicting facts.
The truth is that much of what we believe has less to do with how we weigh evidence than how we see ourselves. In fact, fMRI studies have suggested have shown that evidence which contradicts our firmly held beliefs violates our sense of identity. Instead of adapting our views, we double down and lash out at those who criticize them.
This can be problematic in our personal lives, but in business it can be fatal. There is a reason that even prominent CEOs can pursue failed strategies and sophisticated investors will back hucksters to the hilt. Yet as Adam Grant points out in Think Again, we can make the effort to reexamine and alter our beliefs. Here are three myths that we need to watch out for.
Myth #1: The “Global Village” Will Be A Nice Place
Marshal McLuhan, in Understanding Media, one of the most influential books of the 20th century, described media as “extensions of man” and predicted that electronic media would eventually lead to a global village. Communities would no longer be tied to a single, isolated physical space but connect and interact with others on a world stage.
To many, the rise of the Internet confirmed McLuhan’s prophecy and, with the fall of the Berlin Wall, digital entrepreneurs saw their work elevated to a sacred mission. In Facebook’s IPO filing, Mark Zuckerberg wrote, “Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.
Yet, importantly, McLuhan did not see the global village as a peaceful place. In fact, he predicted it would lead to a new form of tribalism and result in a “release of human power and aggressive violence” greater than ever in human history, as long separated—and emotionally charged—cultural norms would now constantly intermingle, clash and explode.
For many, if not most, people on earth, the world is often a dark and dangerous place. When your world is not secure, “open” is less of an opportunity to connect than it is a vulnerability to exploit. Things can look fundamentally different from the vantage point of, say, a tech company in Menlo Park, California then it does from, say, a dacha outside Moscow.
Context matters. Our most lethal failures are less often those of planning, logic or execution than they are that of imagination. Chances are, most of the world does not see things the way we do. We need to avoid strategic solipsism and constantly question our own assumptions.
Myth #2: Winning The “War For Talent” Will Make You More Competitive
In 1997, three McKinsey consultants published a popular book titled The War for Talent, which argued that due to demographic shifts, recruiting the “best and the brightest” was even more important than “capital, strategy, or R&D.” The idea made a lot of sense. What could be more important for a company than its people?
Yet as Malcolm Gladwell explained in an article about Enron, strict adherence to the talent rule contributed to the firm’s downfall. Executives that were perceived to be talented moved up fast. So fast, in fact, that it became impossible to evaluate their performance. People began to worry more about impressing their boss and appearing to be clever than doing their jobs.
The culture became increasingly toxic and management continued to bet on the same failed platitude until the only way to move up in the organization was to undermine others. As we now know, it didn’t end well. Enron went bankrupt in 2001, just four years after The War for Talent highlighted it as a model for others to follow.
The simple truth is that talent isn’t what you win in a battle. It’s what you build by actualizing the potential of those in your organization and throughout your ecosystem, including partners, customers and the communities in which you operate. In the final analysis, Enron didn’t fail because it lost the war for talent, it failed because it was at war with itself.
Myth #3: We Can “Engineer” Management
In 1911, Frederick Winslow Taylor published The Principles of Scientific Management, based on his experience as a manager in a steel factory. It took aim at traditional management methods and suggested a more disciplined approach. Rather than have workers pursue tasks in their own manner, he sought to find “the one best way” and train accordingly.
Before long, Taylor’s ideas became gospel, spawning offshoots such as scientific marketing, financial engineering and the six sigma movement. It was no longer enough to simply work hard, you had to measure, analyze and optimize everything. Over the years these ideas became so central to business thinking that they were rarely questioned.
Yet they should have been. The truth is that this engineering mindset is a zombie idea, a remnant of the logical positivism that was discredited way back in the 1930s and more recent versions haven’t fared any better. To take just one example, a study found that of 58 large companies that announced Six Sigma programs, 91 percent trailed the S&P 500 in stock performance. Yet that didn’t stop the endless parade of false promises.
At the root of the problem is a simple fact: We don’t manage machines, we manage ecosystems and we need to think more about networks and less about nodes. Our success or failure depend less on individual entities, than the connections between them. We need to think less like engineers and more like gardeners.
Don’t Believe Everything You Think
At any given time, there are any number of clever people saying clever things. When you invoke a legendary icon like Marshall McLuhan and say “Global Village,” the concept acquires the glow of some historical, unalterable destiny. But that’s an illusion, just like the “War for Talent” and the idea of “engineering” your way out of managing a business and making wise choices.
Yet notice the trap. None of these things were put forward as mere opinions or perspectives. The McKinsey consultants who declared the “War for Talent” weren’t just expressing an opinion, but revealing the results of a “yearlong study…involving 77 companies and almost 6,000 managers and executives.” (And presumably, they sold the study right back to every one of those 77 companies).
The truth is that an idea can never be validated backward, only forward. No amount of analysis can shape reality. We need to continually test our ideas, reconsider them and adapt them to ever-changing conditions. The problem with concepts like six sigma isn’t necessarily in their design, but that they become elevated something approaching the sublime.
That’s why we shouldn’t believe everything we think. There are simply too many ways to get things wrong, while getting them right is always a relatively narrow path. Or, as Richard Feynman put it, “The first principle is that you must not fool yourself—and you are the easiest person to fool.”
— Article courtesy of the Digital Tonto blog
— Image credits: Pexels
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The knowledge funnel is a useful concept learned from Roger Martin in the Design of Business. The concept highlights how any new area creating information (and hopefully knowledge) starts very much as a mystery, but as our understanding of the topic area increases, we begin to identify heuristics and make sense of it. For me, this is where we begin to move from data and information to knowledge, and then as our knowledge increases we are able to codify this knowledge into algorithms.
