Two MUST READ business book classics

The “Knowing-Doing Gap” and its sequel “Hard Facts, Dangerous half-Truths & Total Nonsense” are two of the best business books I have ever read.

They should be required reading for all business people, but especially for consultants and other advisors. They also need to be read in tandem, as the second volume, Hard facts, completes the weaker first book.

The Knowing Doing Gap deals with the mystery of how companies - exactly like human beings - know at a certain level what they need to do to succeed (knowing), but cannot seem to successfully execute their plans (doing).

Its core weakness is that it tends to over analyse the “gap” without giving enough substance of how to accomplish the “doing”.

The follow-up volume Hard facts, Dangerous Half-Truths & Total Nonsense documents the results of the ruthless application of critical thinking to much of what we take for granted in the Western Business model.

It addresses the “doing” problem identified in The Knowing Doing Gap by applying the principles of Evidence-based Medicine to business and then offering 9 step plan to get from evidence to action, and thereby close the circle opened by The Knowing Doing Gap.

The authors systematically expose cherished business myths, management received wisdom and articles of faith as total nonsense. Much of “the gap” is due to the misapplication of these damaging management and business principles.

The 6 dangerous half-truths or total nonsense exposed in the book are:

• Separation of “work” and “private” life a good thing? Not necessarily.
• The best organisations have the best people? Surprising not.
• Financial incentives drive performance? Mostly no.
• Strategy is crucially important? Not really.
• Keep up with change or die? Actually it is often change that kills.
• Great leaders control their companies? No, they lead them.

The authors identify and treat the three most damaging poor decision practices that stunt businesses:

• Casual Benchmarking or copying what others do, not what they think
• Doing what seemed to have worked in the past (or elsewhere)
• Following deeply held but unexamined ideologies

The set out a series of guidelines for judging business ideas.

Kent Blumberg has done a good job summarizing them on his blog:

1. “Treat old ideas like old ideas.” No idea springs full blown out of nowhere. And many - if not most - management ideas are really repackaged old ideas. Insist that the authors of “new ideas” provide reviews of past work that led to this “new idea” and information on the sources of ideas. Don’t throw out a program that works just to implement something with the latest catchy name.
2. “Be suspicious of breakthrough ideas and studies.” Breakthroughs are actually pretty rare. Instead, knowledge moves forward as the sum of previous work suggests the next step. Look for patterns across a wide variety of studies and writings.
3. “Celebrate collective brilliance, not lone genius.” Gurus don’t generate ideas - communities do. And a single person cannot implement a change in your organization - it will take the collective wisdom of all your folks.
4. “Emphasize the virtues, drawbacks and uncertainties of research and proposals.” So many authors and consultants present only the virtues of an idea or proposal. Insist on honest exploration of the negative possibilities.
5. “Use stories to illustrate practices, not as valid evidence.” Anecdotes and stories are not valid evidence that a hypothesis is correct. And observation is much better than recollection.
6. “Take a neutral approach to ideologies and theories.” The authors quote Simon and Garfunkel, “A man hears what he wants to hear and disregards the rest.” Work to be sure that you see all the data and evidence about a suggested practice, not just that which fits your assumptions and biases.

What are the 9 Steps from Evidence to Action?

1. Treat Your Organisation as an Unfinished PrototypeDevelop the “Attitude of Wisdom”, know what you know and don’t knows and find a mid-point between over-confidence and insecurity. See the business a work in progress. Lead with the idea of the best direction for now and change direction when new facts arise. As the author wrote on his blog:
   

   .…Perhaps the best description I’ve ever seen of how wise people act comes from the amazing folks at Palo Alto’s Institute for the Future. A couple years ago, I was talking the Institute’s Bob Johansen about wisdom, and he explained that – to deal with an uncertain future and still move forward – they advise people to have “strong opinions, which are weakly held.” They’ve been giving this advice for years, and I understand that it was first developed by Institute Director Paul Saffo. Bob explained that weak opinions are problematic because people aren’t inspired to develop the best arguments possible for them, or to put forth the energy required to test them. Bob explained that it was just as important, however, to not be too attached to what you believe because, otherwise, it undermines your ability to “see” and “hear” evidence that clashes with your opinions. This is what psychologists sometimes call the problem of “confirmation bias.”

2. No Brag, Just Facts Tone down the braggartry and exaggeration. Self-promotion and puffery serve delusions thinking and obscure the real operational picture. This principle is used on the battlefield too. Legendary mercenary Colonel “Mad” Mike Hoare of 5 Commando fame had several rules, one of which stated “Tell no lies in battle. All information must be accurate or your sub unit may suffer. Exaggerate to your girl friend later but NEVER in battle. ” So as it is in battle, it is in business. Commit to no-bullshit.
3. Master the Obvious and MundaneMake common sense common practice. be mindful, pay attention to details. Look with fresh eyes at what you are doing.
4. See yourself and your organisation as Outsiders doEvidence-based management requires good metrics and good metrics give a sober view of your reality. You need to face the naked lunch, examine the horror on the end of the fork. Sometimes this means facing the reality of your or your organisation’s real reputation. To defeat self-serving biases and delusions, you need to tackle group narcissism. You need to ask and hear the answer to the question: Does our organisation’s backside look fat in these behaviors.
5. Power, Prestige and Performance Make you Stubborn, Stupid and Resistant to Valid EvidenceEgo is the great destroyer and power corrupts. Fear and timidity have sunk companies, but overconfidence and arrogance have sunk vastly more. If you are a leader, admit your doubts, mistakes and ignorance. Work on the assumption that the mere act of stepping into a powerful position will corrupt you into stupidity, stubbornness and evidence-resistance. Be ready for it and consciously prepare to countervail against this very well know tendency.
6. Evidence-based management is not just for senior executivesIt is a culture of critical thinking. The best organisations are those where there is a responsibility at all levels to gather and act on quantitive and qualitative data; and to help everyone else learn what has been discovered. It should be everyone’s job to invent, find, test and implement the best ideas. This is the Wisdom of Crowds applied to organisations and it has massive benefits.
7. Like Everything Else, You Still Need to Sell ItWatch out for the host of biases arrayed against You and your unsexy evidence: Biases towards the new and novel, over reliance on authorities, juicy stories of massive success elsewhere.Perhaps the best tactic is to make valid evidence come to life. Learn how to communicate and sell the evidence properly. Use the principles of Stickiness and the new breakthroughs on how to present ideas. Netter ideas do not necessarily triumph. learn how to shape your messages and persuade.
8. If all else fails, slow the spread of bad ideasIn a situation where evidence is ignored and sound policies are never implemented or actively undermined, resort yo Evidence-based misbehavior. When leaders are wrong, and you do not have the power to reverse their foolishness, then ignoring orders, and deploying delaying tactics or sabotage may be the only option. Now this is a VERY dangerous tactic, but you might be protected if it blows up because you can present the evidence in your defense, and thereby introduce it forcefully perhaps to more senior decision makers.
9. The best diagnostic question: What happens when people fail? This is the core diagnostic question. Answer it honestly and understand the answer and you have the answers to all your problems.

Now clearly this is a very rushed taster to get you interested. Now go and read the books!