HARVEY SCHACHTER

Hard Facts, Dangerous Half-Truths, and Total Nonsense

By Jeffrey Pfeffer and Robert Sutton,

Harvard Business School Press,

It's considered a truism that the best organizations have the best people. Another axiom believed especially by managers is that strategy is destiny. And the belief that great leaders are in control is widespread.

But those and other familiar nostrums are dangerous half-truths, according to Jeffrey Pfeffer and Robert Sutton, two professors at Stanford University's Graduate School of Business. Unfortunately, they say, managers and the companies they lead fail to seek evidence to back up such operating practices and ignore what evidence exists.

"If doctors practised medicine the way many companies practise management, there would be far more sick and dead patients, and many more doctors would be in jail," they note.

Medicine and management both deal with unknowns. But doctors prescribe based on the available evidence. And managers ought to follow a similar, evidence-based approach, they say.

"Practising evidence-based management is neither arcane nor extraordinarily difficult -- and it can produce superior results. It can also generate sustained competitive advantage, because since so few organizations and their leaders do it, the likelihood of imitation is not high," they observe.

Take the belief that the best organizations have the best people. In fact, the authors argue, great systems are often more important than great people, as Toyota Motor Corp. has shown with its lean manufacturing. Similarly, strategy can be vital but it's not destiny; ultimately competitive success often comes down to not only knowing what to do but also having the ability to do it.

The authors suggest that great leaders aren't in control, as the mythology suggests, but in fact have quite limited powers in gargantuan organizations. Moreover, trying to be too powerful as a leader can wreck an organization. Instead, leaders need to act and talk as if they are in control, projecting confidence and talking about the future while building systems that allow others to flourish and take the organization forward.

That's a brief description of a very detailed, incisive and interesting analysis of each nostrum by the authors, showing the extent to which it is accurate and inaccurate. They also probe three other common beliefs that on closer examination prove shaky: Work should be fundamentally different from the rest of life so that we act differently in the workplace from at home; financial incentives drive company performance; and organizations must change or die.

The authors offer six guidelines for evaluating the barrage of management ideas and knowledge around us:

When old ideas are offered like laundry detergent in a new, improved format -- total quality control, for example, morphing into Six Sigma quality improvement -- ignore the rhetoric and uncover the actual roots of the idea so that you can better figure out its track record and likelihood of working for your organization.

Be suspicious of breakthrough ideas and studies. We may innately want some silver bullets, but they rarely occur. Most improvements are incremental.

In religion and politics, gurus are portrayed as extraordinary but often dangerous leaders. Business might well take a similar approach, becoming wary of the oversimplifications of management gurus.

Emphasize virtues and drawbacks. Most management ideas are presented as having no negative side. But just as every drug has a side effect, every management idea has its strong and weak points, which should be highlighted.

Vivid case studies of success and failure grab our attention, show us what to do, and inspire us. But the eyewitness accounts on which they are based are suspect, and the approach is not ideal research, so treat them with care. To overcome biases, look for failures embedded in success stories and successes embedded in failure stories. "This could mean, for example, that we should look back at what Enron and WorldCom did right rather than what they did wrong!" the authors suggest.

Take a neutral, dispassionate approach to ideologies and theories. Since people routinely ignore evidence about management practices that clash with their political convictions or idiosyncratic personal histories, we need to put aside our pre-existing beliefs in order to learn.

Ultimately, they are calling for wisdom, to separate truth from fiction so we understand the difficulties we will face after adopting a certain approach. And they present us with a wise book, sobering and illuminating, as they lead readers through some complicated issues, sifting evidence from fiction.

In Addition: In Getting Engaged: The New Workplace Loyalty (Mattanie Press, 175 pages, $21.95), Toronto-based consultant Tim Rutledge shows what organizations must do to get engaged employees and what you, as a manager, must do irrespective of your organization's zeal in this area. Top managers are highly engaged with employees and highly engaged with the work, creating an environment in which employee enthusiasm and engagement will be captured.

The editing is uneven -- the key chart has some labels wrong; the writing is loose; and a clever device in which the writer and an alter-ego converse is used only sporadically. But many of the ideas are shrewd and the tips are helpful.