LinkedIn and Bad Science

Another day, and another LinkedIn post from a well-meaning consultant using “science” to support their argument. This post links to a YouTube video about business leadership and makes a perfectly reasonable point about how much interconnectedness there is in the world. The author could support the argument using ideas from Systems Thinking, for example.  However, they invoke, and mangle, the idea of entanglement from quantum mechanics; a favourite subject for purveyors of woo.

Entanglement states that the way sub-atomic particles interact means their quantum state cannot be described independently regardless of physical location. In other words, a change in the spin of one entangled particle will be replicated in the other no matter how many light years separate them.    Now, this might be OK if entanglement was limited to an analogy, but we are urged to believe that this long-distance connection between sub-atomic particles explains some mystical connection between all humans because, of course, we are all made of atoms!

Logically, this is the equivalent of stating that humans are born from clouds because we mostly consist of water and, you guessed it, water comes from clouds too!

The principles of the scientific method are to test hypotheses to find out if they stand up.  The assumption is that most hypotheses will be replaced by better ones as we learn more. Sometimes they withstand testing and experiment sufficiently well to become a theory that provides a robust explanation of something significant.  A good example is the theory of evolution.  Non-Scientists often misunderstand the meaning of the word theory in a scientific context.  The misunderstanding is given away by statements such as: “Evolution? It’s only a theory”.

Free speech is important so, by all means, everyone should be free to post any idea that crosses their mind, but if you don’t understand the science you want to cite, please use a quote from Chris Morris’s “Brass Eye” and state: “…there’s no evidence for it, but it’s a scientific fact”.  At least then we’d know you were only joking.

 

Houses of Parliament

The Commission on the Future of Management and Leadership

Houses of Parliament

Houses of Parliament

The All Party Parliamentary Group on management in conjunction with the Chartered Management Institute(CMI) set up Commission on the Future of Management and Leadership. Today they publish their report: “MANAGEMENT 2020: Leadership For Long-Term Growth” which provides the basis for a new campaign for a Better Managed Britain, which Cambridge Management Sciences are happy to support and promote.

The Commission have published an open letter to the press expressing their support for the CMI campaign for a Better Managed Britain:

“Dear Sirs
Over recent months, the need to rebuild trust in business and public services has been widely discussed. But a core debate which too often gets overlooked is the quality of UK’s leadership and management.
Are UK’s managers short-sighted, short-termists, or long-term, growth visionaries? As the Commission on the
future of management and leadership makes clear, we are at a tipping point.
We need to raise our sights to a longer-term global agenda.
Those who cut costs and overheads seem to earn more respect for such hard-nosed decisions than those who take the riskier, more innovative paths that lead to growth in revenue, jobs and profits. This approach infects the public sector and social enterprises too, when financial targets are put before service delivery and creating social value.
Whilst cost and profit are important we need management to create value for all stakeholders: shareholders, society and staff alike. Our future prosperity and global competitiveness depends on this. So today, we are supporting the launch of CMI’s campaign for a Better Managed Britain.
For a Better Managed Britain, organisations need to focus on three critical areas: Purpose, People, and
Potential.
Boards must refocus on their organisation’s longer-term purpose, beyond just making money or meeting targets – and to set measurable commitments to customers, suppliers, employees, communities, and the environment, as well as to investors.
We need managers who inspire and support their teams to succeed. Managers who are recruited not only
because of technical skills but because they have the right attitudes, values and ethics. Managers who are assessed and paid not only on their results, but on how they got them.
We need to focus on the long-term over the urgent distractions of the short-term. We must build for the future,
by supporting our education system through providing access to the world of work, by training, mentoring and nurturing new managers and leaders.
Today we are calling on those responsible for leading businesses, public services and third sector enterprises
to start with an honest self-appraisal of their Purpose, People and Potential, identify where they could make improvements, and take action to do so.
Together we will create a better Managed Britain with long-term sustainable growth for the benefit of all.

<Ends>

Steve McGrady, Managing Director of Cambridge Management Sciences, and a Fellow of the Chartered Management Institute, is a co-signatory of the open letter.  “I am pleased to be able to demonstrate our support for this campaign”, said Mr. McGrady, “it is important to highlight that organisations should focus on their long-term commitments to all stakeholders and move away from over-emphasising cutting costs to increase profits and shareholder returns.”

Fundamental corporate governance reform required

Corporate governance has been reformed and improved, but recent evidence suggests there is more to do.

Financial Services

As Standard Chartered Bank and HSBC join Barclays in the rogues gallery of banks that have suffered severe failures of corporate governance, the reputation of commercial banks can, surely, only be recovered through fundamental reform of corporate governance rules, and the associated regulatory bodies for the financial services industry.

Other industries

Today’s revelation that Oracle Software will pay $2m (£1.27m) to settle federal civil charges of failing to prevent secret payments in its Indian sales operation and the recent fiasco here in the UK surrounding the inability of G4S to fulfil its contractual obligations to give security for the Olympic Games suggests that corporate governance issues extend to businesses in other industries beyond financial services.

Corporate governance regulation and culture

There have been number of actions in recent years that should have improved things. In the UK, for example, there have been changes to the regulatory bodies responsible for financial services, but the evidence suggests that there are too many cases of the FSA having to ‘cure’ problems and not having prevented the problems in the first place.
In many cases of systems failure, the cause can be attributed to lack of commitment of people to, in this case, the regulatory regime and, therefore, the principles underpinning it.
Cleaning up the behaviour of people inside businesses requires significant change to the culture of many corporations. The culture is informed by the values which, in young, small firms are set by the founder and in large, more mature corporations are set by the Board. In both cases, the existence of a culture that allows, or in extreme cases, condones bad practice is a failure of leadership.
Reinforcement of the standards expected by society can be addressed, at least partly, by flies and regulation. In this case, the failure of regulation could also be a failure of leadership which, in this case, means political leadership. However, as the financial and political strength of corporations grows alongside their international reach, political failings aren’t always attributable to political leaders. In many countries the ability of national regulation to control global businesses is severely limited due to the relative political and economic weakness of small nation states relative to large, global corporations.
If we take banking as a defined segment of the financial services market, it might be time for national governments to recognise that co-operation towards a unified international corporate governance framework of principles, regulation and enforcement backed up by co-ordinated action through national governments is overdue.

Gut instinct or intelligence?

The Institute of Leadership and Management was offering a “master class”on Spiritual Intelligence(SQ) as part of their Professional Development programme.  As a Fellow of the Institute I am interested in any professional development, but as a proponent of evidence-based management this offering troubled me.  A small number of members posted comments on the ILM website, LinkedIn and Twitter.  Maybe because of this criticism, or possibly independently, they changed the name of the event to “Increase your Intelligence” and  now, instead of referring to a higher, metaphysical intelligence, the outline is much more down-to-earth and describes intelligence in our heart and gut that interact with the intelligence in the brain.

There is nothing wrong with suggesting a hypothesis such as gut intelligence, but as with all these New Age, pseudoscientific claims, they hijack selective pieces of scientific research and make claims that cannot be proven and, therefore, should not be made.

For example, the revised outline states that: “We each have 3 separate intelligences (head, heart and gut) operating in our bodies and how these brains communicate and operate with each other is vital for congruence, success and happiness.”   However, you only need to undertake the smallest amount of research to discover that there is no such evidence.  For example, Scientific American has an article on the subject which states that: although its influence is far-reaching, the second brain is not the seat of any conscious thoughts or decision-making.  It also quotes Michael Gershon, chairman of the Department of Anatomy and Cell Biology at New York–Presbyterian Hospital/Columbia University Medical Center, and an expert in the emerging field of neurogastroenterology: “The second brain doesn’t help with the great thought processes…religion, philosophy and poetry is left to the brain in the head…” 

Clearly there is new information being discovered all the time, and who knows where it may lead. For example, as the revised outline correctly describes, scientists have discovered networks of neurons in the intestines. These are sometimes referred to as our ‘second brain’ but right now to talk about gut intelligence is unproven and, as Carl Sagan famously said: “…I try not to think with my gut. If I’m serious about understanding the world, thinking with anything besides my brain, as tempting as that might be, is likely to get me into trouble.”

 

Tim Cook told climate-change denying investors to sell their Apple stock

In the same week that Apple CEO Tim Cook told climate-change denying investors to sell their Apple stock, an interesting, and challenging, report from strategic advisors lavery/pennell suggests that a new, sustainable model for industry has emerged estimated to be worth €100bn in additional profits for European companies, with the benefit of creating 168,000 new jobs and, most importantly, a 14.6% reduction in greenhouse gas emissions. The new model is a response to today’s business challenges involving three stages:

1) Improve non-labour resource efficiency
2) Reinvest some of these efficiency savings in sustainable inputs (materials & renewable energy)
3) Develop innovative new products and grow market share

The report cites a carpet tile manufacturer (Interface) as evidence of the success of this approach. The company has cut it’s energy use by 40 per cent since 1996, and now recycles 43 per cent of its raw materials.  It has also reduced its emissions of carbon dioxide by 90 per cent, sends zero waste to landfill, and recycles all its water. As a result, Interface is now the largest carpet tile company in the world, with revenues of $1 billion.

Intuitively, this kind of approach makes sense – this report is a valuable contribution to building an evidence base to demonstrate the value that well-planned and executed ‘green’ initiatives can have for people and the environment which can also be profitable.

Good Strategy/Bad Strategy: The difference and why it matters

A section in the book Good Strategy/Bad Strategy: The difference and why it matters
by Richard Rumelt describes how we naturally adopt a scientific approach to strategy.  This doesn’t appear to be a widely held view, although we use it in our practice, so it is interesting to see that the Institute for Operations Research and Management Science (INFORMS) Board of Directors approved the creation of a new journal called Strategy Science.

This new publication is being launched under the leadership of Daniel Levinthal from The Wharton School. It will publish outstanding research directed to the challenges of strategic management in both business and non-business organisations.

The subjects will range from relatively macro-level concerns of industry dynamics and the institutional context in which organisations operate to more organizational-level focused work, such as processes of organizational change, and work that links the organization to its external context, such as questions of firm boundaries and strategic positioning.

The journal will be open to a variety of disciplinary approaches including economics, operations research, political science, psychology, and sociology providing the work enhances meaningful understanding of substantive issues in the strategy domain. The journal encourages authors to take chances to produce work that pushes the field forward.

The first issue is scheduled to be published in 2015. For more information see the submission guidelines at http://pubsonline.informs.org/page/stsc/submission-guidelines.

We welcome this new journal and look forward to finding out what insights it will give.

Management development that ignores evidence is lazy

An April 2013 New Scientist article “Body language: what our movements really reveal”, by Caroline Williams, highlights a number of myths about “reading” body language, many of which are presented as ‘facts’ in management training and development programmes without the supporting evidence to demonstrate their accuracy. This lazy repetition of assertions that make the trainer sound insightful or that are simply attractive sound bites is bad practice and could cause damage by perpetuating myths that are either untrue or,at best, half-truths.
For example, how many trainers will admit to repeating one of the canards cited in the article rather than checking the evidence first: that 93 per cent of our communication is non-verbal, and only 7 per cent is based on what we actually say. This figure came from research conducted over 40 years ago by Albert Mehrabian, a social psychologist at the University of California, Los Angeles. He found that if the unspoken message conveyed by tone of voice and facial expression differed from the word being used (for example, saying the word “brute” in a positive tone and with a smile), people tended to believe the non-verbal cues over the word itself. From these experiments Mehrabian calculated that perhaps only 7 per cent of the emotional message comes from the words we use, with 38 per cent coming from tone of voice, and 55 per cent from other non-verbal cues.

The article explains that Mehrabian has spent much of his time in the past forty years explaining that he never meant this formula to be generalised, and that it only applies to very specific circumstances — when someone is talking about their likes and dislikes. Mehrabian claims that “unless a communicator is talking about their feelings or attitudes, these equations are not applicable” and so the oldest stat in the body language book isn’t quite what it seems. As Williams points out, if we really can understand 93 per cent of what people mean without using words, we don’t need to learn foreign languages and we would never get away with telling a lie.