Three Myths of Management

In a new book, Stanford professors Jeffrey Pfeffer and Robert I. Sutton assail popular yet shaky—maybe even harmful—management practices. The catalogue of poor decision practices is immense - here are three of the most common - and most harmful to companies.

Casual benchmarking. There is nothing wrong with learning from others' experience—vicarious learning, as contrasted with direct experience, is an important way for both people and organizations to learn how to navigate a path through the world. After all, it is a lot cheaper and easier to learn from the mistakes, setbacks, and successes of others than to treat every management challenge as something no organization has ever faced before. So benchmarking—using other companies' performance and experience to set standards for your own company—makes a lot of sense. In the end, good or bad performance is defined and measured largely in relation to what others are doing.

Three questions to ask:

1. Is the success you observe by the benchmarking target because of the practice you seek to emulate?
2. Why is a particular practice linked to performance improvement—what is the logic?
3. What are the downsides and disadvantages to implementing the practice, even if it is a good idea?

Doing what (seems to have) worked in the past. Suppose you went to a doctor who said, "I'm going to do an appendectomy on you." When you asked why, the doctor answered, "because I did one on my last patient and it made him better." We suspect you would hightail it out of that office, because you know that the treatment ought to fit the disease, regardless of whether or not the treatment helped the previous patient. Strangely enough, that logical thought process happens less than we might care to admit in most companies.

Three questions to ask:

1. Are you sure that the practice that you are about to repeat is associated with the past success?
2. Is the new situation—the business, the technology, the customers, the business model, the competitive environment—so similar to past situations that what worked in the past will work in the new setting?
3. Why do you think the past practice you intend to use again has been effective?

Following deeply held yet unexamined ideologies. The third flawed and widespread basis for decisions often does the most damage because it is the most difficult to change. It happens when people are overly influenced by deeply held ideologies or beliefs—causing their organization to adopt some management practice not because it is based on sound logic or hard facts but because managers "believe" it works, or it matches their (sometimes flawed) assumptions about what propels people and organizations to be successful.

Three questions to ask:

1. Is my preference for a particular management practice solely or mostly because it fits with my intuitions about people and organizations?
2. Am I requiring the same level of proof and the same amount of data regardless of whether or not the issue is one I believe in?
3. And, most important, are my colleagues and I allowing our beliefs to cloud our willingness to gather and consider data that may be pertinent to our choices?

(Excerpted by permission of Harvard Business School Press from Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management. Copyright 2006 Jeffrey Pfeffer and Robert I. Sutton. All rights reserved.)