The hard facts about half-truths

BUSINESS CLASSIC: After reading this, you won't trust your gut feeling until you've got some facts to back it up, says Stefan Stern.

by Stefan Stern
Last Updated: 24 Feb 2015

During the Enlightenment, philosophers grappled with the question of what if anything we could know for sure. Modern management is different: fads, gut feel and myths ‘inspire’ leaders to do some pretty silly things.

Pfeffer and Sutton, both professors at the Stanford Graduate School of Business, call time on amateurism and guesswork in this punchy book. They urge leaders to base their decisions on facts – ‘evidence-based management’ – and not hunches.

A particular target are ‘half-truths’, which the authors describe as ‘ideas and principles that are partly right at times, but are flawed and misleading often enough to get organisations into serious trouble’.

One such half-truth is that ‘financial incentives improve company performance’. Where colleagues need to work together, individualistic targets can lead to damaging behaviour. Financial incentives do work, in the right setting. So pick the right ones in which to deploy them.

And test things before introducing company-wide initiatives. ‘There are three ways to get fired at Harrah’s [the US leisure group]: steal, harass women or institute a programme or policy without first running an experiment,’ they write approvingly.

Stick to the facts, handle half-truths with care and avoid total nonsense, and all should be well.

Stefan Stern is visiting professor at Cass Business School. Follow him on Twitter: @StefanStern

Hard Facts, Dangerous Half-truths and Total Nonsense: Profiting from evidence-based management by Jeffrey Pfeffer and Robert Sutton is published by Harvard Business School Press (2006)

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