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.

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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

Freud on change management

One of my core beliefs as a management consultant is that the root cause of why change projects fail is the lack of a clear and convincing business case. In my experience, the vast majority of people are willing to change (even if this change has negative implications for them), as long as they understand the rationale behind the change and have the means (resources) to change.

However, I also have come across a number of people who did not want to change, even when there was a clear need to do so, and they had all the required capabilities and resources at their disposal.

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The Negative Feedback Paradox

Let me start with a confession:I never liked receiving negative feedback, and have spent the largest part of my professional life ignoring it.

I found ignoring negative (or perhaps I should euphemistically say ‘corrective’) feedback to be quite easy. Depending on the situation, I either did not take the person who gave me feedback seriously (‘that is rich – from him?’), comforted myself that the feedback concerned only a minor issue in the grand scheme of my behavior (and that other aspects of my behavior would compensate this), or convinced myself that the person giving me feedback did not understand the context in which I acted the way I did or said the things I said.

It was not until I hit a serious roadblock in my career, that I started to see the fact that systematically ignoring feedback was not necessarily a great idea. 

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Always put your oxygen mask on first

Illustration Oxygen Mask (Pexels)Increase your personal effectiveness by dealing with your actions first

For many senior business people, their day in the office resembles drinking from a fire hose. Not only do they need to attend a large number of meetings (often back to back), they are also hit with a continuous stream of ad-hoc questions from their staff, peers, customers, and line managers which require their attention and action.

A couple of years ago I started to get really worried about my personal effectiveness. Despite the outrageous number of hours I spent at work, I found it increasingly difficult to complete my tasks and finish my projects.

In order to address this, I decided to analyze my workload to find out what I could do to change this.

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