Decision-Making

Un-tested Assumptions

A few days ago I posted a video from Dan Pink about the latest research on motivation.  Today I ran across an article on entrepreneurial leadership by George Cloutier from Entrepreneurship Magazine.  Cloutier proposes that a benevolent dictatorship is the only way to run a business. He suggests that pay for performance is critical to success. But according to Pink, pay for performance actually reduces the level of performance in tasks that are cognitively demanding.

Cloutier is a management consultant with many years of successful consulting.  But what I’ve noticed recently is that many management consultants rely on past experience, gut instinct, received wisdom and a thirty year old management education.  Recent research on our decision-making processes shows that we are subject to many biases. His advice might actually have some real value, especially in the area of accountability.  But some of his advice runs contrary to what recent managerial research shows to be effective. 

We all have assumptions that we carry around with us. They enable us to make decisions more quickly with less effort. The problem is that many of our assumptions have been proven false by research in the past few years. This means that the average manager, (and consultant) can never stop questioning their assumptions, and can never stop educating themselves about the latest advances in understanding management. We need to rely on sources that have strong evidence and are rigorously tested, not on a management consultant’s assumptions and opinions.

Be aware of what you read.  Are the author’s assertions supported by research or personal experience? Is the research from a reputable source? Are there enough different sources or studies to support the idea? Is the evidence based on multiple companies or people?  Before you jump on any managerial bandwagon, make sure that the idea is solidly supported by evidence. Make no un-tested assumptions, they’ll get you into trouble every time.

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