photo by ktylerconk
“I doubt, therefore I am” René Descartes
Today, I was part of a practice debate. The subject of the debate was: “that executives’ bonuses should be slashed”. I was part of the negative team that is supposed to argue that the claim is wrong. The positive team, which is the first to argue, started by claiming that they do not think that bonuses, which they defined as stock options and monetary compensation, should be totally slashed, but they should be taken down to a reasonable level. Now, I can talk about the subject itself (which I guess I pretty hot in today’s economy), the arguments (who determines what is reasonable?) and about the experience (I recommended it) but I want to talk about something else. Why didn’t they claim that bonuses are ineffective?
I admit that I did not think about this straight away. Like the positive team and without any relation to what my team was supposed to argue, I also took it for granted, that such bonuses are effective in creating productivity and results. I thought about this question later when I was reading an article called “Evidence Based Management” by Jeffery Pfeffer and Robert I. Sutton. In it, the writers claim that managers often take decisions without considering relevant and available evidence. One of the examples they give is the following:
There is, in fact, little evidence that equity incentives of any kind, including stock options, enhance organizational performance. A recent review of more than 220 studies complied by Indiana University’s Dan R. Dalton and colleagues concluded that equity ownership had not consistent effects on financial performance
In this blog I write from time to time about the fact that there are conventional wisdoms of management which are just wrong. As times goes by, I am surprised to see how many are there and how widespread they are. I don’t know if the incentive idea is wrong or right. It might be that the inconsistency is part of the fact that there isn’t one way to create motivation. But the fact remains the same. I think most of the managers you will ask will say it is a good idea. It is a conventional wisdom.
Just today, Seth Godin, in his post, writes about another example of a conventional wisdom: bigger and not better. A short quote:
You’re at a conference, talking to someone who matters to you. Over their shoulder, you see a new, bigger, better networking possibility. So you scamper away. It’s about getting bigger. Compared to what? You’re never going to be the biggest, so it seems like being better is a reasonable alternative.
So, why does this happen? I don’t know. But from my limited experience and according to Pfeffer and Sutton’s article, it happens all the time. So, as managers, what can we do? My answer? Doubt. We need to cast doubt all the time.
The problem is it is harder than it sounds. Besides all the regular hurdles, like pride, the sense that we know better, our preference to our own experience over others experience and more, new brain research actually shows that our brain is such a lazy machine, that it does everything it can not to think about new ideas and concepts. This means we have to make it. We have to create processes that will make us cast doubt. All the time.
So, as managers, we should create processes that facilitate the casting of doubt on a regular basis. I am sure you know better than I do how to do it at your place of work. The question is when is the last time you cast doubt on what you take for granted?