A Book on Evidence-Based Management

by Krishna on July 7, 2007

I recently finished reading “Hard Facts, Dangerous Half-Truths and Total Nonsense”, a management book by Jeffrey Pfeffer and Robert I. Sutton. In this book, the authors describe how business leaders and managers should use actual evidence as the basis for decisions. You may think that this is the case, but most people actually base their judgments on emotion and intuition than real facts.

The authors discuss a variety of issues such as:

  • Is work very different from other aspects of life and should it be?
  • Do the best companies have the best people?
  • Is company performance driven by financial incentives?
  • How important is strategy to a company’s performance?
  • Can a company survive if it doesn’t continue to change?
  • How significant is the role of leaders in driving the results produced by their companies?

You may be surprised at some of the conclusions of the authors. They explain how many common assumptions that typical managers have are based on their fears, hopes, experiences and ideologies. Managers generally do not know and do not care to find out if these assumptions are validated across other companies and organizations.

One of the things I liked about the book is its exploration of “half-truths”, which it calls “dangerous”. A half-truth is a statement that has some truth to it, but has several caveats to it. For example, it is true that financial incentives can drive company performance forward. But what are the side-effects of financial incentives? They have the potential to create friction between colleagues and also create conflicts with customer service which only has an indirect effect on financial performance through building goodwill.

A quote I liked from the book was

Wisdom means … striking a balance between arrogance (assuming you know more than you do) and insecurity (believing that you know too little to act).

In fact, real management is always about balance. The moment you go crazy about or against something is when you stop being rational and start succumbing to your emotions in guiding you through messy real-life management situations. Such behavior is usually guaranteed to end in tragedy.

I would qualify this book as a must-read. Unlike typical management books, it does not provide any ready-made prescriptions or formulas for solving management problems. Instead, it encourages one to consider making decisions using verifiable facts instead of unproven assumptions. As the authors say: stop and take the time to reflect.

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