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.
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