6 Popular Ideas that Fail | Digital Tonto

「Nobody ever gets fired for buying IBM」 was once a popular belief that seems quaint now.  It's hard to imagine that people used to buy IBM products simply because they were so dominant.
 
We are all, however, chauvinists for our own age, caught up in our own moment.  We take refuge in the safety of numbers.  We don't trust the short line at the store.  Quantity has a quality all of its own.
 
The following is a list of seven ideas that, like choosing IBM a few decades ago, won't get anyone fired.  Nevertheless, they probably should.

1. Pay For Performance

One of the things you hear with metronomic regularity in the business world is the importance of performance pay.  However, as Daniel Pink reveals in his book Drive, there is an enormous gap between what science knows and what business does.

He draws on decades of studies that show that for problem solving and creative tasks (i.e. most of what professionals do today), incentive pay often decreases productivity.  He recommends that giving employees opportunity for autonomy, mastery and purpose is far more effective.

My experience suggests that he's right.  Incentive pay is more likely to result in efforts to 「game the system」 than to create value and I have found that, even with salespeople, individual performance pay often backfires.  I've had better results with group bonuses, but even then you need to be careful with structure and not give them too much weight.

That doesn't mean that that incentives have no place at all. They can signal priorities and help people keep track of how they are doing.  However, in general they're overdone and more qualitative forms of feedback can be far more effective.  After all, if employees aren't intrinsically motivated, you have bigger problems than compensation.

2. Brainstorming

Another standard practice that is taken on faith is brainstorming.  However, again there is little or no evidence that it works and a there is a vast body of evidence to the contrary.  This paper(pdf) suggest that brainstorming results in fewer and poorer ideas and cites studies dating back to 1958.

Others suggest that brainstorming results in more ideas, but is less likely to result in a viable solution (this is more consistent with my experience – 150 crappy ideas that are quickly forgotten).

Either way, the fact remains that brainstorming sessions rarely result in productive outcomes.  While in some circles the practice takes on a mystical significance, almost akin to a séance in which the spirits of brilliance will magically appear on white-boards, there are much better ways to unlock creativity.

3. SWOT Analysis

SWOT analysis, the identification of strengths, weaknesses, opportunities and threats has become nearly universal in strategic discussions.  However, like brainstorming, there is little evidence that it works.  This article by  J. Scott Armstrong at the Wharton school cites research that shows that the method is more likely to do harm than good.

Nevertheless, whenever anybody wants to put on their strategic hat, you can expect some form of SWOT analysis to follow.  The result, at least in my experience, is some silly conclusion like 「Our strengths are our weaknesses and our opportunities are our threats.」

In other words, a complete waste of time.

4. Marketing ROI

Okay, maybe this isn't so ridiculous.  Marketing is an investment and some effort must be put forth to determine return.  However, ROI as normally practiced usually obscures more than it reveals.

Too often, the discussion about ROI revolves around myths rather than reality.  This is especially true when it comes to digital ROI, which invariably ignores the fact that the bulk of budgets remain offline.  

Worse, ROI is commonly used as a sales tool by media owners, who for some reason think that it's helpful for clients to receive a dozen or more ROI estimates from as many salespeople. These usually employ incredibly convoluted calculations in the name of transparency, seemingly in an attempt to redefine the term 「oxymoron.」

There are, of course, some sensible ways to approach ROI.  However, they entail having full access to marketing data. So if you're not a marketer yourself or an agency with an ROI contract, it's an exercise in futility.

5. Social Media Followers

An interesting offshoot of the ROI madness has been the extremely misguided use of metrics in social media marketing, particularly with respect to the number of followers.

As I wrote before, adding followers won't build your community.  What's really important is how engaged they are in their interactions with each other.  So rather than focusing on what numbers show up on your Twitter profile or Facebook page, try and give them something to talk about.

Be interesting, have a story and help them connect with each other.  It's internal links that drive social networks rather than simply how many people you can get to link to your brand.

6. Experts and Experience

We all have to come to terms with our own ignorance.  No matter how hard we try, there will always be vast chasms of dark space in our knowledge.  So, it's understandable that we're constantly on the lookout for experts. However, their value is often overstated and can sometimes even be negative.

First of all, research suggests that people often get worse with experience, so the fact that someone has been doing something for a long time doesn't necessarily make him good at it.  Second, innovative breakthroughs happen when people cross domains and usually not by through expertise in just one area.

Finally, as I wrote about in my post on elegant gurus, just because someone comes with impressive credentials doesn't mean that they have their facts straight.  In actuality, some seem to think that having a gold-plated resume means that they no longer need to be diligent and rigorous.

Don't Believe Everything You Think

Why is it that practices become so widespread with little or no evidence to support them?  Bertrand Russell had this to say:

「If a man is offered a fact which goes against his instincts, he will scrutinize it closely, and unless the evidence is overwhelming, he will refuse to believe it. If, on the other hand, he is offered something which affords a reason for acting in accordance to his instincts, he will accept it even on the slightest evidence. The origin of myths is explained in this way.」

In other words, we tend to search for information that supports what we already believe and disregard evidence to the contrary.  Brainstorming feels creative, therefore it must be.  We like having big numbers next to our names, therefore it feels good when we have a lot of followers.

When called on to make a choice between our beliefs and our well being, we have a strange tendency to choose our beliefs.

The foolishness, of course, doesn't stop with the six examples cited above.  Stanford professors Jeffery Pfeffer and Bob Sutton have uncovered a wealth of popular yet mistaken management notions and advocated for what they call evidence based management.

The moral is clear:  Don't believe everything you think.