Deconstructing Management Maxims
It’s partly true, too, but it isn’t all true. People always think something’s all true.
—J.D. Salinger, The Catcher in the Rye
Thoughtful people mull over inconsistencies.
—Malcolm Gladwell
Tidy absolutes and truisms have always been problematic for those of us afflicted with healthy skepticism. However, if presented with objective data and other credible evidence, I’ll drop my guard and embrace the occasional maxim, aphorism, proverb, carbon-dated factoid, or immutable law of physics or chemistry. For instance, I don’t question that under normal conditions the freezing temperature and boiling point of water are, respectively, 0°C and 100°C, or that force equals mass times acceleration (F=ma), or the principle of Boyle’s Law (the volume of a gas varies inversely with the applied pressure).
But in the less precise realms of management and the behavioral sciences, it is unsettling to hear business people confidently dispense phrase-length wisdom that makes a Twitter post read like a Tolstoy novel. The impetus for this book stems from repeatedly witnessing common business axioms incorrectly presented as truisms. Many of these mendacious sayings have transcended our business lexicon by jumping species from management speak to the mundane language of our larger culture.
We casually drop these literary jewels to emphasize key points, using them as evidence to win closing arguments. It is often evidence with no backbone, such as these maxim-inspired assertions: It’s no wonder your business failed, you didn’t have a mission statement! And, If you had a business plan, you would have known what to do when the market shifted! Or, how about, Treat your customers right and they will be loyal. These absurd claims are representative of the general beliefs that mission statements are akin to oxygen for organizations, that a business plan is a ticket to entering a competitive market, and customer bliss is all you have to worry about to be successful. However, none of these statements are close to being a universal truth. At the root of these flawed exclamations are seemingly harmless maxims. For example, the guilty maxims for the assertions mentioned above are, respectively: Mission statements are a must; Business plans are required for entrepreneurial success; and the royally dubious decree of Customer is king.
The intent of this book is to debunk several sayings that I believe are the worst offenders when it comes to pretending to be global truths, when in fact they are often wrong even when presented as harmless suppositions. For starters, I refer to these pearls of business pseudo wisdom simply as management maxims, and often more succinctly as maxims. A maxim may be defined as a “general truth, fundamental principle, or rule of conduct . . . a proverbial saying.”1 Even the great Aristotle weighed in on maxims, advocating:
One great advantage of maxims to a speaker is due to the want of intelligence in his hearers, who love to hear him succeed in expressing as a universal truth the opinions which they hold themselves about particular cases. . . . and people love to hear stated in general terms what they already believe in some particular connexion. . . . There is character in every speech in which the choice is conspicuous; and maxims always produce this effect, because the utterance of them amounts to a general declaration of what should be chosen; so that, if the maxims are sound, they display the speaker as a man of sound character.2
Apparently even back in ancient Greece it was commonly thought, “We hear what we want to hear.” Similarly, management practitioners become conditioned to the general belief systems and lingo of their particular disciplines. Author Chris Mowles, in Rethinking Management, alludes to a form of managerial peer pressure, warning of a “universal and dominant currency of management language one must accumulate to be recognized.”3 Buttressed by the writings of sociologist Pierre Bourdieu, Mowles views leadership theories and trends through the lens of managerial social capital. Mowles acknowledges the difficulty with going against the prevailing winds of management thought, speaking about fashionable leadership practices with:
As they become ubiquitous so they are harder and harder to oppose. To put forward an alternative understanding of leadership, to worry away at the taken for granted assumptions that are left unexplored in currently accepted formulations, is to risk calling one’s own professionalism into question.4
Bucking the trend or party line can indeed be an occupational hazard. In Hard Facts, Dangerous Half-truths & Total Nonsense, Stanford’s Jeffrey Pfeffer and Robert Sutton caution us about the incorrectness of conventional wisdom. They claim practitioners in most fields are “unwilling or unable to observe the world systematically because they are trapped by their beliefs and ideologies. Their observations are contaminated by what they expect to see, or because they aren’t logical enough in their thinking.”5
Indeed, hardly just a recent phenomenon, Aldous Huxley alluded to this occupational conundrum and “intellectual inconsistency of men” by writing:
Men have to live before they think; and to one who would live efficiently, peace of mind is of vastly greater consequence than logical consistency. If peace of mind can be obtained only by sacrificing logic, then logic goes by the board, not merely unregretted, but unnoticed by its generally quite unconscious sacrificer.6
Like popular management trends, maxims are hard to dislodge when they attain mainstream appeal. Given that maxims are notoriously succinct and loose in the evidentiary department, many have a corresponding contra maxim. These paradoxical pairs allow the teller to present whichever side of the parable he or she is partial to depending on the situation. For instance, consider the following dueling maxims: The bigger the better versus Good things come in small packages; Birds of a feather flock together juxtaposed with Opposites attract; and It’s better to be safe than sorry pairs neatly and disharmoniously with Nothing ventured nothing gained.7
A business leader or investor can easily gravitate to a two-sided maxim. For instance, The bigger the better is a bite-sized rationale for extolling the economies of scale, market clout, and synergies sure to be had with a large corporation, say a McDonalds’s, Toyota or General Electric. It also helps set the table as simplified justification for merger and acquisition activity. While in contrast, Good things come in small packages is equally poignant when applied to the nimbleness of small, entrepreneurial ventures or autonomous new product teams unencumbered by large bureaucracies. It works just as well when playing up the benefits of miniaturization or selling smaller cars or shrunken food portions.
In some ways maxims are the ultimate implement in a spin master’s communications toolbox: a versatile, two-way convincing device. A maxim permits you to begin a discourse with an innocuous claim. Debaters can enrich an argument with a strategically placed aphorism as filler in between real data or evidence. Additionally, an apropos maxim can be used to seal the deal, for final buy-in or icing on the case, if you will. Why take a chance with an original thought when you can rely on concise epigrams of conventional business wisdom?
The maxims treated in this book are, by and large, not of the dueling variety. The lack of dichotomy found in management maxims contributes to their controversy (at least when rebuked). The one-sided nature of management maxims makes them different from general, nonbusiness aphorisms. My attempts at dulling the absoluteness of these proverbs will likely provoke disagreement with some readers. You may not subscribe to the maxim reorientations presented in these pages. My goal is not to reverse the polarities of these statements by hailing their opposite forms. Instead, my objective is to uncover flaws and expose maxims that are incorrectly presented as absolutes. For example, my fight is not with Customer is king as an ideal, but with Customer is king as a patronizing, given, and necessary mantra for a successful business enterprise.
Some of the maxims you will encounter in this book have degraded to the status of, dare I say it, cliché! Cliché is a harsher, more insidious term, summed up as “a trite phrase or expression . . . a hackneyed theme, characterization, or situation . . . something that has become overly familiar or commonplace.”8 To dramatize the deep, 2,400-year-old roots of this device, we turn again to Aristotle as he expounded on the more pedestrian utility of a maxim with, “Even hackneyed and commonplace maxims are to be used, if they suit one’s purpose: just because they are commonplace, everyone seems to agree with them, and therefore they are taken for truth.”9
A prime example of such a hackneyed phrase is the management maxim we examine in Chapter Two: Customer is king, a variation of the cliché the customer is always right. Oddly enough, the customer is always right has limped along as a passé, outdated joke of sorts that remains nostalgically popular via some bizarre form of disaffected group pride. Many regard it as patronizing and untrue, even when stubbornly referring to it. The muttering of customer is always right is often accompanied with requisite eye-rolling by both its perpetrators and listeners alike.
Yet Customer is king prevails as a surprisingly believable and overused tenet borne of good intentions yet violated by nearly all of our cellphone and cable television companies, city halls, and departments of motor vehicles. What makes Customer is king a management maxim worthy of a chapter in this book is that it is often blatantly untrue. We’ll get into specifics as to how and why it is so deceitful in Chapter Two, but suffice it to say there are glaring examples of wildly successful firms that only give lip service to this maxim. Indeed, we’ll explore how many organizations feel no obligation to subscribe to this battle cry despite our consumer society’s insistence that they must. For instance, your cable television provider is very likely a large, profitable company with little regard for you as a customer. Customer is prey is a more accurate maxim in many of these cases.
Before previewing the remaining chapters and their respective maxims, we should answer the following question: Why all the fuss about these seemingly harmless proverbial sayings? Surely we can navigate our way around frivolous elements in our vernacular. We must know when we are bending the meanings of these half-truths and corporate myths to fit our sense of style and argumentative purposes, relying on the safety of generalized figures of speech. Are we justifying being close enough in terms of the clichéd language and superficial evidence we employ when arguing a point? The problem is these maxims have become so ingrained in our business communication patterns that we have taken them as absolute, literal truths without questioning them in context. Our very notion of truth silently erodes each time some nebulous piece of folklore masquerades as fact. The status quo selfishly guards the implicit approval of our collective naiveté.
For example, when employees hear Failure is not an option over and over again from their boss, from films (e.g., Apollo 13), and from National Football League (NFL) coaches on television, we internalize and think of it as an absolute truth, a truism. The danger of internalizing this falsehood about failure is that we may not try hard enough, or try at all. We may not discover our performance limits. We may sheepishly avoid all risks, playing not to lose instead of maximizing our potential. Think of the implications on research and development if failure were prohibited. If Failure is not an option becomes an involuntary, hard-wired response to challenging work situations, we may just sit back defensively and let events unfold around us. Better to be safe than sorry, I guess. We will cover some specific examples relating to the repercussions and benefits of failure later in Volume Two, or at the very least we’ll try!
To their credit, maxims are convenient, simple statements that help us explain our world. Maxims function as guidelines and mental models that serve our harried agendas and time-starved decision-making events. For example, a manager may tell her employees to use Customer is king as a rule of thumb, so whenever in doubt just be sure to do whatever it takes to make a customer happy. However, the trade-off of this simplification and so-called efficiency may lead to the misreading of problematic situations. Making every customer happy at all costs is not always prudent or possible. Some demanding customers, based on their value to the organization, are not profitable enough for the organization to over serve, or maybe even serve at all.
Reliance on maxims is not just a problem confronted by businesses. We find a propensity for passive acceptance of the short and sweet even in science. Physicist Leonard Mlodinow, author of The Upright Thinkers: The Human Journey from Living in Trees to Understanding the Cosmos, warns that even when looking at the scientific process, “The oversimplification of discovery makes science appear far less rich and complex than it really is.”10 Indeed, to Mlodinow’s point, we often misconstrue scientific achievement in our attempts to dumb it down, making it more digestible or entertaining. Furthermore, the oversimplification of business practices may be even more disquieting than similar violations committed in the hard sciences. As a social science, management is fraught with measurement and validity issues unlike the more quantifiable metrics found in other scientific disciplines.
Another recent example of maxims running amok comes from Spencer Raskoff, CEO of the online real estate service Zillow. Mr. Raskoff claims, “Most axioms are not supported by data, [such as] you should buy the worst house on the best street—that’s a terrible idea.”11 Conversely, the dozen homeowners I queried recently thought this to be a sound, value-oriented real estate mantra.
Many people assume that most top performing companies got that way by treating customers exceptionally well, or that these high achieving firms always scored well on great places to work or most admired companies lists. However, as Phil Rosenzweig points out in The Halo Effect and Eight Other Business Delusions that Deceive Managers, most of us think too simplistically and assume—incorrectly—that there is a simple cause-and-effect relationship.12 Sure there is often (but not always) a strong correlation between superior financial performance of a company and its grade on customer orientation. However, what came first? Did the perception of a customer focus at the company prevail before or after the firm achieved financial success? Did the company become a great place to work because it so successfully exploited its market monopoly power and now offers onsite day care services for employees? Did the creature comforts, premium insurance benefits, and above average salaries cause Google to become a leader in search and online ad revenue? If we are asking if there are clear, cause-and-effect relationships in these questions, the answer is probably no.
Chapters at a Glance, Volume One
As stated earlier, Chapter Two starts us off with the deconstruction of Customer is king. Several firms will be identified for systematically violating this maxim, some for going out of their way to treat customers more like prey than kings. Sadly, many successful organizations remain that way in spite of their woeful customer etiquette. I’ll include survey data as well as several baffling examples of customer disservice.
Chapter Three, People are our most important asset, centers on the hypocrisy of corporate communication doublespeak that stresses how vital employee effort, health, training, and development are to an organization’s success. Many companies have outsourced nearly all facets of their human resources (HR) function, much of which is neither human nor resourceful. Thus, where do employees rank in relation to other business assets? I’ll provide some sobering evidence on the status of human capital and the general malaise of HR. Globalization, short-time horizons, the rapid pace of automation, and a lack of employee engagement are just some of the challenges facing this largely disposable asset.
A rather controversial topic is our faux maxim for Chapter Four: Diversity improves performance. There is some evidence of diversity’s benefits with cross-functional teams, problem solving, and strategic thinking. However, there are enormously successful institutions that lack diversity (e.g., the nursing profession; the National Basketball Association; and Silicon Valley’s start-up and venture capital communities). Much of the empirical research done on traditional diversity attributes shows little or no support for diversity’s impact on organizational performance. The polarizing nature of this topic makes it imperative that we take a dispassionate look at evidence surrounding this phenomenon. A broader scope of what constitutes diversity, including diversity of perspective, as well as ways to more effectively leverage differences in the workforce are discussed.
Chapter Five deals with the notion (held by many smart people) that a Competitive advantage is necessary to compete. I will sift through some semantics to clarify what a competitive advantage is and then review several successful firms with no true competitive advantage. However, these firms work hard with what they have and remain viable over time. In fact, you don’t have to look far to find sustainable enterprises with no clear competitive advantage. As for the holy grail of strategy, the sustainable competitive advantage, that rare and exotic creature belongs on the endangered species list.
The sacrosanct saying that a Business plan is necessary for entrepreneurial success is our maxim du jour in Chapter Six, the final chapter of Volume One. How important is it for a fledging entrepreneur to write a formal business plan? Once thought unassailable by mere mortals, there has been a great deal of research looking into the need, use, and effectiveness of business plans. A brief review of the research literature and select case studies are provided to illuminate the false certitude commanded by the business plan requirement. The list of both the freakishly and modestly successful entrepreneurs sans business plan is a long one indeed.
Preview of Volume Two
The much heralded maxim stating that a Mission statement is a must is fodder for the first chapter of Volume Two of Deconstructing Management Maxims. Although a common inclusion in management, new venture, and strategy texts, as well as a starting point for management consultants to begin invoicing their clients, I have uncovered evidence showing that a mission statement is not as indispensable as once thought. This research has unveiled a surprising number of blue chip firms that do not subscribe to the mission statement mantra. A review of the literature as well as my own data collection and analysis of the S&P 100 and Fortune 500 are provided. Also, there is a short quiz you can take to test your corporate mission knowledge.
Another controversial topic gets the critical treatment in Chapter Two of the second volume. For years, Americans have been bashed for not knowing their world geography and for speaking only English, especially when compared to Europeans. However, I contend that the cry for English speakers to learn a second language is not nearly the necessity it has been portrayed to be. While I am a committed globalist and believer in the richness of intercultural competency, I also subscribe to the widely held position that English is the lingua franca for international business. This chapter examines the growing trend of companies in non-English speaking countries adopting English as their official business language. Yes, that’s right, many home-grown companies in non-native English-speaking countries require their employees to speak English at work—among themselves!
Next up for critical examination is the common yet mistaken notion that Introverts cannot lead effectively. Our culture tends to gravitate toward the boisterous and charismatic. We seem destined to follow those with outward confidence, extraverted leaders with enthusiasm and ceaseless energy. In contrast, I’ll provide examples of accomplished leaders that are more sedate and reserved, yet as impressive as their chest thumping counterparts.
The act of worrying has gotten a bad rap over the last several years. The misleading maxim of Worrying is counterproductive is an outgrowth of all that research telling us how bad stress is for our health. Marriott Hotels ran an ad campaign recently spouting, “When you’re comfortable, you can do anything,” highlighting the comfy confines of their hotels. However, I’ll provide several examples where sweating the details and staying up late pondering what if scenarios can yield tremendous benefits. A strong dose of healthy paranoia can be great for business.
The pop sensation maxim Failure is not an option is one that warrants particularly thoughtful criticism. While not a desired result, failure happens. If failure is feared too much or rarely seen in you, your team, or your organization, then you are not pushing hard enough for growth and results. This chapter includes numerous examples extolling the benefits of normalizing failure.
Organizations often praise participatory and democratic management systems. The last maxim for discussion in Volume Two, Consensus decision making is optimal, has gained momentum from the movement of progressive team management techniques. However, consensus is often employed by risk-averse managers and teams lacking conviction. This tepid behavior is fostered by organizational cultures that are intolerant of dissidents. There are also instances where individuals with positional, expert, or charismatic power may force group members into reluctant consensus. The facade of a team’s unified front often takes precedence over making the best decisions.
Each chapter (excluding this one) ends with a handful of contra maxims intended to reflect more of the truth seen in management practice. These contra maxims are not meant to be epigrammatic taunts aimed at their semantic brethren, but are merely reflective of more evidentiary thinking. Furthermore, the list of flawed management maxims presented in these volumes is by no means complete. In the interest of time and space I left several maxims alone and will tackle them in subsequent editions.
Lastly, I have done my best to give a balanced account of the behaviors and implications surrounding the management maxims discussed in this book. I have endeavored to provide the reader with empirical, scholarly evidence from both sides of the maxims. That being said, I have included a pertinent quotation from Albert Madansky of the University of Chicago, who has written and lectured extensively about the great business books of all time. With the reader in mind, Professor Madansky writes:
The approach taken by most readers today, though, is to overemphasize resonances at the expense of searching for counterexamples. They read their books much like they read the op-ed pages of the daily newspaper, they either agree or disagree with the writer’s propositions and leave it at that.13
It is the responsibility of the business book writer and reader to challenge assumptions about the behaviors and attitudes of various business stakeholders. Too often, we just accept a given business practice or maxim as gospel without questioning it. Frankly, I expect very few readers to completely agree with my positions in this book, which is fine with me. I hope you read this book and wrestle with many of the maxims analyzed. Compare the examples I provide with your own experiences. Use the premise of each chapter as a launching point with your colleagues to delve into the finer points and implications of specific maxims. Challenge each other’s assumptions and evidence. Think critically and reflect. Question the unquestionable. Perhaps this thinking will enhance your management perspectives, career, or organization in some way.
Notes
1. Merriam-Webster’s Collegiate Dictionary, 11th ed. (Springfield, MA: Merriam-Webster, Inc., 2003). s.v. “maxim.”
2. Aristotle, “Rhetoric Book II, Chapters 20–22,” in The Complete Works of Aristotle, 2nd ed. Jonathan Barnes, 2223–2224 (Princeton, NJ: Princeton University Press, 1984).
3. Chris Mowles, Rethinking Management: Radical Insights from the Complexity Sciences (Surrey, England: Gower, 2011), 106.
4. Ibid.
5. Jeffrey Pfeffer and Robert Sutton, Hard Facts, Dangerous Half-truths and Total Nonsense (Boston, MA: Harvard Business School Press, 2006), 14.
6. Aldous Huxley, Proper Studies (London, United Kingdom: Chatto & Windus, 1927), 82.
7. Richard Nordquist, “What are Dueling Maxims? Examples of Contradictory Maxims, Proverbs, and Aphorisms,” http://grammar.about.com/od/qaaboutrhetoric/f/maximqa.htm (accessed May 13, 2015).
8. Merriam-Webster’s Collegiate Dictionary, s.v. “cliché.”
9. Aristotle, “Rhetoric Book II, Chapters 20–22”, 2222–2223.
10. Leonard Mlodinow, “It Is in Fact, Rocket Science,” The New York Times, 28 May 2015, A19.
11. Spencer Rascoff, “How Did I Get Here?” Bloomberg Businessweek May 25–31, 2015, 76.
12. Phil Rosenzweig, The Halo Effect and Eight Other Business Delusions that Deceive Managers (New York, NY: Free Press, 2014).
13. Albert Madansky, “How to Read a Business Book,” University of Chicago Magazine, Feb 2001, http://magazine.uchicago.edu/0102/features/read.html (accessed May 6, 2015).