UPFRONT : Finetuning the bullshit detector

New Zealand Management, Aug 1, 2006

If you have half a memory and think the latest, best, breakthrough bit of management advice has a familiar ring, you're probably right.

That's according to Robert Sutton, professor of management science at Stanford Engineering School and author of a bunch of books including Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management co-written with Jeffrey Pfeffer and published earlier this year by Harvard Business School Press.

In a recent article entitled "Management Advice: which 90% is crap?" (see www.changethis.com) he laments that there is no 100 percent reliable "management advice crap detector" but does come up with five guidelines for deciding which advice should be ignored and which earmarked for an implementation trial.

The first is to "treat old ideas as if they are old ideas" because history has a nasty habit of regurgitating notions that have already proved to be of little value - though that usually escapes collective memory at the time of their revival. The second, somewhat related warning, is to "be suspicious of breakthrough ideas or studies". Sutton notes that management publications are overly fond of listing "breakthrough" business ideas that usually turn out to be old or common bits of wisdom repackaged in new lingo.

The next is to question "what are the incentives for the people who are selling you the idea?" Why, he asks, do investment banks keep promoting the benefits of mergers when analysis shows they are mostly of little benefit to shareholders and the majority of them fail?

Fourth is to check whether you're being told that "all the best/ Fortune 500 companies do it" which, says Sutton, reminds him of the blunt old saying: "Eat shit. 100 billion flies can't be wrong." The "prevailing wisdom" isn't always right and what works for one company doesn't necessarily translate well to another, he warns.

The fifth guideline is to ask if the idea seems "too obvious". If it is, that's probably a good thing because most of the best management ideas are relatively simple and easy to implement. The most effective companies, says Sutton, are "masters of the mundane".

He says that while Hard Facts contains much research, the main idea is that the best leaders and companies have "the attitude of wisdom". As he puts it: they have the courage to act on what they know now but the humility to change their course if they encounter new evidence; they also know how to argue as if they are right and listen as if they are wrong so they can develop and think about their ideas without becoming narrow-minded or slaves to bad or incomplete ideas.