Last Updated Apr 20, 2009 6:25 AM EDT
In the previous blog I argued that it was hubris that led to managers making mistakes. How do you control hubris using evidence based management is to me the key message that comes from the Pfeffer-Sutton book Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management.
The authors define evidence-based management is about making decisions based on facts rather than conventional wisdom, history, ideology or assumptions. Pfeffer and Sutton highlight three typical ways managers make decisions which typically end up seriously harming the organisation:
1. Casual benchmarking: when we copy what organisations do mindlessly â€" but are we copying the right things?
2. Doing what seems to have worked in the past. The problem with experience is that you see what you expect to see. If we think something worked, we think it will work again which can sometimes lead to one year of experience repeated 20 times.
3. Following deeply held yet unexamined ideologies
All these methodologies are characteristic of someone with a high Politician; copying a benchmark from a large organisation they admire, and being aggressively persistent about ideas and techniques they have used before are very characteristic of a manager with high Politician component.
Pfeffer & Sutton suggest that the way to control these character flaws is to adopt "The Attitude of Wisdom. This is a way of thinking that was first defined by Plato and is known as Socratic ignorance. Socrates, was described by the Delphic Oracle as the wisest man in Greece because paraphrasing Socrates' words "I am better off than the expert for he really knows nothing, and but thinks that he knows. I neither know nor think that I know." Socrates had realised that what gets you into trouble is not what you don't know; you can always find that out. It's what you think you know, that turns out not to be true which is the real problem.
In my own life I used Socrates very successfully when raising $10 million for the first retail Venture Capital Fund in 1984. As I made some 40 calls in two weeks to the stockbrokers I was constantly asked what I knew about venture capital. My reply at the time was that "I am like Socrates, I know nothing."
After two years as venture capitalist I realised that none of my peers in Australia actually knew anything about VC except what they had gleaned from newspaper and magazine articles. My tag line then changed "I would say not only do I know nothing about venture capital, I know more than anyone else in the industry."
Socrates defined himself as a seeker of truth and that probably is the essence of evidence based management. In large organisations governed by politics this approach can be difficult. On the other hand it is useful to remember the words of Queen Elizabeth I, probably England's greatest ruler.
The foolish sovereign rewards the courtiers who tell her what she wants to hear; the wise sovereign bestows her gratitude on those who struggle, however vainly, to reach the truth.