Why do smart people make wrong decisions?

The most important part of leadership is making decisions. Decisions about products and markets to invest in, people to hire and to promote, IT-systems to select, to continue or terminate projects plagued by setbacks, mergers & acquisitions, etc. These decisions determine the success or failure of organizations, projects and individuals. 

Ever since my graduation in the field of Sociology, I have always been very interested in the topic of decision making in organizations. At university, I loved the lectures of Professor Lawler about concepts like bounded rationality. I also loved reading books on this topic, including ‘Essence of Decision’ (about decision making in the Kennedy administration during the Cuban missile crisis) and Barbara W. Tuchman’s classic ‘March of Folly’.

Do we really need another book on this topic?

Against this background, I was a bit concerned when my friend and former PA Consulting Group colleague Wim van Hennekeler, told me that he was writing a book about decision making. This was mainly due to my concern about whether he could possibly add value to the vast body of work that was already published on this topic.

Continue reading

Pump up the volume!

Time-efficient alternatives for reading business books

During my years in college, one of the first rap songs that became extremely popular was ‘Paid in full’ from Eric B & Rakim in the Coldcut mix. Its signature ingredients contained the soundbite ‘Pump up the volume’. 

‘Pump up the volume’ also was the phrase that resounded in my head when I recently read a bestseller from a well-known Harvard Business School professor. The entire book was based on a single concept that could easily have been explained on one single page. Instead, the author used more than 230 pages, which cost me the better part of a Sunday to read.

Why I like reading business books

I like reading business books for four reasons:

  1. To satisfy my intellectual curiosity
  2. To help me to make sense of what I personally observe about the way organizations ‘work’ (or not!)
  3. To enhance my skills 
  4. To keep me ‘current’

Why I am often disappointed after reading them

However, more often than not, I feel reading them is not the most efficient use of my time. The reason why is that (like the example mentioned at the beginning of this post), business books often try to expand ideas and concepts that could be explained in a couple of pages to the size of a book. This almost always means they need to cross the magical border of 200 pages.

I think this phenomenon is caused by the fact that business books mean ‘business’. Although it is not easy to gain insight into the market for business books, creatively extrapolating existing statistics indicate that each year more than tens of millions of business books are sold across the world. Therefore, the market for business books might be around one billion dollar. NB: This estimate excludes the sales of textbooks for higher education.

From articles to books

It is common practice that articles in business magazines are being pitched by the authors as possible book ideas, or vice versa. 

The difficulty obviously is that not every idea published in the form of an article justifies the expansion into book size. 

Therefore authors often rely on two strategies to ‘pump up the volume’ of their articles. The first one is to increase the number of concepts or ideas they covered in their article. This might be a good reason to turn an article into a book, but is hard to do. The second strategy is much easier: simply expand the number and/or size of the examples used in the book.

Blue Ocean Strategy

Let me use an example to illustrate this point. In the October 2004 issue of the Harvard Business Review (HBR), W. Chan Kim and Renee Mauborgne published their great and groundbreaking article ‘Blue Ocean Strategy’. The central idea of their article is that the vast majority of businesses traditionally compete in the same market space. This ‘bloody’ competition leads to winners and losers. The authors, therefore, call these markets ‘Red Oceans’. The alternative they suggest is to find uncontested markets, so-called ‘Blue Oceans’.

This HBR article is indeed excellent. The authors produce compelling arguments for their central ideas and illustrate these with relevant examples. 

However, then they decided to publish a book around this idea. A very successful decision from a commercial perspective; the book sold more than 4 million copies.

After reading both, however, I did not feel the book had added any significant value. Actually I felt I wasted probably about 5-6 hours reading it.

My strategy to stay current

The question is how to stay current with new developments in the world of management, without wasting time by reading business books that prove to be a waste of time. I am not sure there is a golden formula, but I am happy to share my ‘T-shape’ strategy to keep my knowledge up to date.

  • Deep – I am a devout reader of the Harvard Business Review for two reasons. First, I always find at least three-four articles in this bi-monthly issue interesting. Secondly, rightfully or not, it is regarded as the ‘gold standard’ in the world of business publications. Ideas published in this magazine are often considered to be a ‘must know’ in the business world.
  • Width – Twitter is a very good way for me to keep track of interesting articles being published by a range of different outlets. Excellent magazines like ‘The Economist’, ‘Fast Company’ and ‘Wired’, as well as a number of consulting firms, announce interesting articles and publications on Twitter. Therefore, I find Twitter the best way to fight my personal ‘FOMO’ (Fear Of Missing Out) on noteworthy business publications.

My strategy to select the right business books

Does this mean I do not read business books anymore? Absolutely not! I have hundreds of them, and, just like Umberto Eco said: ‘I love the smell of book ink in the morning’. This year I enjoyed for instance ‘Mindf*ck’ by Christopher Wylie, ‘The four’ by Scott Galloway, ‘The art of employee engagement’ by Marijn van Faassen, ‘Foute besluiten’ by Wim van Hennekeler and ‘People Matter, People Matter’ by Gary Hays. At this moment, I take a lot of pleasure from reading ‘Facebook’ by David Levy. 

When I reflected on which business books I liked, I discovered the ones I liked most told stories. Stories either about a very interesting history of a corporation (e.g. ‘Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of Blackberry’ by Jacquie McNish and Sean Silcoff), or honest auto-biographies. Books in this category include for instance ‘Lost and Founder’ from Rand Fishkin and the ‘The hard things about hard things’ by ‘Ben Horowitz. I stress the word honest, because too many books in this category squarely belong in the ‘How I did it’ category (the HBR column with the self-gratifying ‘rags to riches’ fairy tales of senior leaders).

When I am tempted to buy a business book, I often check its reviews at www.goodreads.com. This site provides a variety of often well-grounded opinions. It also circumvents the problem that established magazines and websites in the ‘eco-system’ of business publications, only tend to publish favorable reviews.

© Dirk Verburg 2020

Disclaimer: Views, thoughts, and opinions expressed in the text belong solely to the author

Mindf*ck: Politics, Psychology and Social Media

In 2018, the Cambridge Analytica scandal shocked the world. It became clear that Cambridge Analytica had used data from tens of million Facebook users, to influence the elections in the US, and the Brexit referendum

Continue reading

The Art of Employee Engagement (Book Review)

Employee engagement is a topic close to my heart. In the past two decades I have designed, managed and implemented the findings of engagement surveys multiple times, and also managed to write an article with my point of view on how to make them ‘work’.

Given my interest in this topic, I was very pleased to receive a copy of ‘The Art of Employee Engagement’ by Marijn Faassen. I read it in one go, because I found it a fascinating read, for a number of reasons:

Continue reading

Decision making for a new Decade

Every year millions of people around the world make New Year’s resolutions. Given that we are currently starting the 2020’s, we have the exciting opportunity to make resolutions for a whole new decade!

I decided to make mine around decision making. The reason for this was the fact that I had the opportunity to read ‘Unlocking Leadership Mindtraps – How to thrive in complexity’ by Jennifer Garvey Berger during the Christmas vacation.

One of the key notions in this book is that the world has become much more interconnected and therefore more complex. Unfortunately, our decision-making skills are ‘brilliantly designed – for an older, less connected, and more predictable version of the world’. In this context, Jennifer Garvey Berger mentions five mind traps we can find ourselves in, one of them being trapped in ‘Simple stories.

Continue reading

Unleash the Wimpy Kid!

illustration managing the wimpy way-1

Why I consider ‘Lost and Founder’ by Rand Fishkin to be a must read

At the beginning of my career, I managed a high profile ERP project. A couple of weeks before the go-live deadline, the customer introduced completely new requirements but did not want to shift the deadline. Needless to say, this significantly compromised the amount of time available for testing, something every available textbook warns one about. However, due to a combination of intimidating behavior of the customer, my own unwarranted optimism and lack of experience, I agreed to implement these new requirements and limit the amount of time available for testing. A decision which resulted in a rather ‘volatile’ go-live scenario which was highly visible for everyone in the company…

It is common wisdom that we learn more from our mistakes than from our successes. If anything, success has a tendency to make us complacent, whereas mistakes force us to take a step back, reflect on why our actions and behaviors did not work out as planned, and stimulate us to make changes in the way we approach opportunities and challenges.

Continue reading

Book Review: Pariahs, Hubris, Reputation and Organizational crises

Tw Cover PariahsA ‘must read’ for the C-suite.

By Dirk Verburg

Ever since the industrial revolution, large corporations have played an important role in our society. Due to the globalization in the past decades, their influence is continuously increasing.

At the same time it seems that the number of scandals caused by these large organizations is growing as well. Established names, such as Barclays, Siemens, Wells Fargo, Ahold, VW, BP, Shell, Worldcomm, Tyco, Enron, Olympus, Arthur Anderson, E&Y, the BBC and many others, have all experienced scandals, and some no longer exist as a result.

What complicates this situation even is that governments and other institutions (e.g. regulators and ‘independent’ accounting firms) do not seem to be able to control, or at least monitor, the way companies in the private sector are operating. Continue reading