Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management

Some years ago a discipline was developed called evidence based medicine. It is based on using studies of outcomes to make medical decisions rather than on subjective feeling. An early example of evidence based medicine was the decision to see if blood letting was an effective way of treating various ailments. It was found that sick people who were treated with blood letting died at a higher rate than sick people who received no treatment at all. Blood letting had been one of the corner stones of medicine for centuries and in fact the leading British medical publication is still called the "lancet" the device used to drain blood.The writers of this book suggest that like any ideas Management theories should be tested to see if they actually work. They are of the view that some ideas work, some don't and some are counter productive. To illustrate the notion of testing they first discuss a Casino in Nevada. The running and management of casinos has had what could be called basic unchallenged assumptions. They are:* High rollers should be encouraged by the provision of free rooms alcohol and the like* Large ostentatious buildings are important in attracting customers* Advertising is effectiveThe writers talk about a Casino manager who rather than become a captive of the notion of accepted wisdom tried different things and then measured the financial gain. The managers name was Gary Loveman. What he found out was that the group who targeted the greatest revenue were retired people who would play machines for longer periods of time as a form of entertainment. The source of these customers were the local area. Direct mail was the best means of encouraging these people and as they lived in the area they were not interested in free rooms. What they responded to was the gift of $60 worth of playing chips. Other groups such as families with children were much less profitable as they had much less of their income to gamble and were poor targets for advertising.On the cost side Loveman found that if money was spent on staff selection and training and some realistic notion of what the job was like was communicated to staff retention rates increased 50%.Having outlined the idea of a methodology of approach the book looks at some of the conventional management approaches. One of the accepted truisms of modern management is incentive style pay systems. Do they in fact work? The answer is sometimes they work, sometimes they don't and other times they can be disastrous.The best example of a successful incentive scheme is assembly production. The authors speak of a plant in which windscreens are installed in cars. In this case an incentive scheme achieved big productivity gains. The worst example is that of the New Orleans police. New Orleans had a big increase in crime and incentives were designed to reward police for reduction in crime figures. What happened was that instead of a decrease in crime the police simply faked the figures reporting offences as less serious matters. This initially led some of them to get reward payments but led to a clean out of the New Orleans police with large numbers of senior management being sacked. Clearly there are some differences which are important in working out when incentive schemes will work. With a production line it is easy to see if someone is cheating. One can look at the production for both quantity and quality. With a civilian authority dealing with a police department the flow and knowledge and the ability to understand what is going on is more limited.It is clear however that incentive systems can send out rather bad signals and often can be counterproductive. Thus one of the goals of most organisations it to have their employees to work as a team. Another goal is to have the employees think that they are valued. Both of these goals are ones that run contrary to a system which may encourage competition and feelings of being seen as inferior to other employees. The point that the book makes is simply that such systems cannot be seen as by default good and their effects in a given system must be measured to see how they perform.Another good example is the discussion of strategic plans. One of the writers attended a function run by a large law firm. The law firm had a secret strategic plan. The writer said the he was certain that he could guess the secret plan. He suggested that it was:* Growing high margin areas* Getting out of low margin areas* Easing out historically low profit partners* Bring in more profitable partners* Move from a location based to practice based structureThe thing is that a large number of consultancy firms make a living out of working with law firms and offering such advice. The reality is that the advice is simply a set of truisms and that the key is not having those ideas but being able to move toward the goal. They key in any organisation is not the plan but the execution. As a result strategic plans have been going out of fashion and are seen as mainly effective at providing revenue streams for consulting firms.The book suggests that there are no simple answers to any question and the best management tool is for managers to be open minded and to know their limitations and when they do not know the answers.

Hard Facts: Dangerous Half-Truths & Total Nonsense by Jeffrey Pfeffer and Robert I. Sutton lays out an argument for how powerful evidence-based management can be. The gist of the book is to explore how so many "common sense" actions we take in business may not be the best choice, after all, when the underlying data is looked at objectively. The aim of the authors is to encourage us to research for ourselves what the best course of action for our particular group should be and to make small tests to see how well it fits in with our current culture.For example, many companies look at a successful competitor and blindly copy what they are doing in one area, thinking they can therefore have the same results. But maybe it's an entirely different area which is leading to the success. Maybe the company is doing well in spite of that specific practice. It's only by looking at a number of examples - both of successful and failing companies - that the real patterns can emerge. And even if there is a trait that does work at other companies, it still might not work in the target location. Every technique should be tested and evaluated in its destination before it's fully implemented.In another example, some companies reward the top 10% of employees as the best. But perhaps the other employees are equally the best at what they do, but it's just measured in a different way. Or maybe they could be the best if they had a different boss or were in a different position.Some jobs focus on providing monetary rewards, when employees might crave recognition or a more flexible work schedule. If a manager thinks, "I just need to throw more money at them to get the job done", because that seems common sense to him, he could miss out on a much productive work force.A key message of Hard Facts is that a company should be viewed as an unfinished prototype. It should always be tweaked, polished, and examined - but not blindly. A change should not be forced in just because a neighbor is doing it. Experiments should be conducted to see if the change is really beneficial for the company in question. In the same way, every "sacred cow" should be up for exploration. With a culture of innovation and curiosity, a company can increase its ability to adapt and stay viable in the ever-changing marketplace we all now live in.There is a wealth of enormously helpful advice in the book. But I also feel that in order to make its points that "no normal practice should be unexamined" that the book sometimes gets a bit extreme / silly in its examples. It seems to look down on the wearing of uniforms by medical professionals and police - but those uniforms serve a purpose in setting an expectation in civilians who encounter them. It puts down rules against dating colleagues, when there is little way that a boss-employee relationship cannot be completely separated from the power relationship. It instructs people to be true to their nature - but what if a boss is naturally short tempered? Surely that boss should work on altering his nature to be more supportive of his staff.In a section talking about how a culture of "helping others" is good for a company, they use an example of someone who is annoyed to help but does it anyway. I'm not sure if that's a great example of the culture a company wants to foster. They praise a company who refused to tell potential employees what their salary would be. I'm sorry, but if I am quitting my job to work for someone else, I need to know they're going to pay me more than $800 a year!I think their purpose was to get readers to stretch their minds about areas they might have hard-set beliefs in. However, by making some of those examples so extreme, they undermined their effectiveness in getting their message across. I want to be nodding my head in agreement as I read a book of ideas, not shaking my head in disagreement.Still, the underlying message is sound. Don't reject a strategy as being flawed when it might be the implementation that is iffy. Be willing to put aside existing beliefs and give other ones a try. Release your commitment to the "current way" and be willing to see if other ways might be better. Sure, sometimes they won't be. But at least by trying, testing, and experimenting, you don't miss the chance to make things even more efficient and supportive.Well recommended, with a grain of salt in their examples. Evaluate them and test them with your own mind.I purchased this book with my own funds in order to use it as a textbook in a Leadership class.

I enjoyed this book. It gives you the pluses and minuses of the half-truths discussed. It has case studies to show companies that do well and those that don't. The best part is that this book isn't selling you a fix it all strategy. Instead it shows the importance of wisdom and evidence in leadership. I think all leaders of all kinds would find value in this book if for nothing else but to make them question their own reasoning behind decisions.

I was introduced to Jeffrey Pfeffer's work at a management course in 2008. Thereafter, I read and reviewed his book, Managing with Power, and was impressed by his analysis of power in organisations. It was with this in mind that I bought Hard Facts, Dangerous Half-Truths and Total Nonsense. My my! I was not disappointed.We have all heard the phrases, "war for talent", "keep work separate from life", "getting financial incentives right", "strategy is destiny", and "we need more leadership". We often latch on to these snippets of conventional wisdom, translating them into organisational policy, yet seldom stop to question the assumptions behind conventional wisdom.In this brilliant book, authors, Jeffrey Pfeffer and Robert Sutton, remind us to practice evidence-based management. They show how surprisingly many management decisions are driven by the ideology and charisma of managers, and not necessarily by the evidence. They tackle some `conventional wisdoms' of the management literature. I'll rehash some of the more important of these `wisdoms' here:1. GREAT LEADERS ARE IN CONTROL OF THEIR COMPANIESThe business press and our contemporary culture are obsessed with leadership; therefore, we lionise corporate leaders like Jack Welch and Lee Iacocca. Pfeffer and Sutton emphasise that leaders do make a difference. Indeed, some of the defining social changes of the last century may not have occurred without the leadership of people like Gandhi, Martin Luther-King and Mother Theresa.While leadership matters (as a Nigerian, I have seen my fair share of questionable political leaders), Pfeffer and Sutton suggest that the myth of leadership is a half-truth, especially in large organisations. Citing research on human psychology, they (Pfeffer and Sutton) put it down to human nature: "when we look at organisations, we see people who are in charge; we don't see the constraints that affect their behaviour and company performance". We tend to attribute to much blame for mistake--and credit for success--to leader. One GE executive interviewed in the book joked, "Jack [Welch] did a good job, but everyone seems to forget that the company has been around for over 100 years...and he had 70,000 other people to help him".2. FINANCIAL INCENTIVES DRIVE COMPANY PERFORMANCECiting recent research, the authors show that financial incentives are used to drive performance because individuals believe that other are motivated by money, even as they (the individuals) know that they are much less so. Often, financial incentives are overused and tend to attract the wrong kind of talent: people only interested in making a buck. Pfeffer and Sutton show that there are cases in which financial incentives work well: where work is mostly done by single individuals, who do not work in interdependent settings. Once people work in large interdependent settings, then financial incentives alone are not the key drivers of company performance (see for example, Amazon, SouthWest Airlines and CostCo).3. STRATEGY IS DESTINYBusiness schools, governments, the military and corporations are fixated on strategy (defined as what the organisation does based on its competences and where it can add value). The authors question the logic and evidence for why conventional wisdom states that strategy is destiny.Using examples of successful companies like Dell, Intel and Amazon, the authors show that these companies did not succeed by having proprietary (secret) strategies; if anything, their strategies were public knowledge. Dell's strategy, for example, was to bypass the wholesalers and sell directly to the consumer using just-in-time inventories. Even though Dell's competitors knew this strategy, they could not replicate Dell's success. What made the difference then? The authors stress that implementation of Dell's strategy was the key to delivering the goods. No, strategy is not destiny. While a company will benefit from good strategic planning (what business to be in and how to compete with other firms), it will almost certainly benefit from the less glamorous details of implementation (keeping it simple, learning as you do etc).In the words of John Maxwell, conventional wisdom is borne of "lazy thinking". Pfeffer and Sutton's Hard Facts is a reminder to challenge this lazy thinking and to practice evidence-based management, a commitment to using the facts--and only the facts--to inform the management of organisations. This means that management should be based on the best available evidence of what works in a given organisational setting. Pfeffer and Sutton make their case with clarity, wit, healthy skepticism and conviction. It is a message that every senior executive should hear. Pfeffer and Sutton's Hard Facts deserve five glittering stars.

Clarity that more people need

Good book. Expecially meant for the fools who believe in theories of hype and hoopla. Pin points that all you read need not necessarily be true.

One of the best from Dr Jeffery Pfeffer and Bob Sutton. And also my favourite. Clear thoughts, well expressed

I like this book a lot. It differs from the mass of other books in that it indicates what not to do rather than giving the one thousandth interesting idea of what else you could try. It would get a fifth star from me if it met its own standards fully: based entirely on statistics than anecdotes. It goes pretty far in that direction, but there are still a number of spots where I feel it could be improved in that respect. This is a standard by which even Peter Drucker would fail, but it is the whole point of the book, and I expected to see it applied rigorously throughout. In all other respects, though, it is really a very helpful work.