One of the great problems in management theory is that there is quite a bit of humbug and I think there are several reasons for that. Management thinking is, due to its very nature, entrepreneurial and everybody who has an idea wants to ensure that it is read by as many people as possible and maybe make a few bucks is the process. More than any other science, management ideas are primarily developed to make money and people are thus willing to pay good money for them.

However, not many management theories are underpinned by solid scientific research. As a working manager you need to be equipped with a pretty good ‘bullshit radar’. Looking around the management section of the average bookshop the volumes on sale do not seem to meet the rigour of academic research. Many books give you ’simple solutions’ to success. Good to Great by Jim Collins is one of the best selling volumes in this genre.

The Business Pundit blog provides a great criticism of Collins’ work which is basically pseudo-scientific. The book is touted to be based on solid scientific analysis of data, but in fact relies on Jim’s intuition (p. 11):

“We all have a strength or two in life, and I suppose mine is the ability to take a lump of unorganized information, see patterns, and extract order from the mess – to go from chaos to concept.”

Collins did not use any detailed statistical analysis of the data, there are no indications of statistical validity of his findings. Although he repeatedly emphasises focusing on the data, his interpretation of the data is not scientific, but based on intuition. There is nothing wrong with using intuition to make specific decisions, but you can not call it science and generate general rules for good business management.

The reason pseudo scientific books like Good to Great are popular is because our brains are not naturally wired to be critical thinkers. The success of a lot of business literature is based on confirmation bias and the Forer Effect. We prefer information that confirms our  preconceptions. Also, most popular management theory does not go beyond self-fulfilling prophecy and broad sweeping general statements and its popularity is in essence based on the same psychological principle that explains the success of astrology and other forms of divination.

Another problem is that the average manager does not have the capability or drive to fully understand complex theories that underpin human behaviour. Managers don’t want to read complicated scientific theories and if you like to write a management best seller, stay away from using complex statistical analysis.

Management is in essence a social science that aims to influence human behaviour in order to achieve a collective goal, whether that be increasing profit or creating a great piece of orchestral music. Management seeks to influence the behaviour of customers to convince them to purchase goods or services. Management seeks to influence employees to ensure goal oriented behaviour. Management theory is also about influencing or anticipating behaviour of the external world, i.e. the stakeholders and possible competitors.

As a social science, management does not follow the strict rules of the natural sciences. There are no simple formulas to ensure staff motivation, increases sales volumes or ensure customer satisfaction. Management is about human behaviour, which is intrinsically unpredictable. I have criticised Collins for not using scientific methods in Good to Great. There are, however, limits as to what the scientific method can achieve in management. All we can hope to achieve is to develop  statistical models. These models do, however, not produce nice statements about nice sounding concepts such as ‘Level 5 Leadership’ and the ‘Hedgehog principle’. At best, scientific analysis provides partial insights into a very specific phenomenon instead of the organisation as a whole.

There are also too many practical and ethical issues with undertaking full scale management experiments that would be required to make the sort of claims that Collins promoted in Good to Great. Simply looking at sets of data from the past can not generate such claims because there are too many confounding variables that are not covered by the data. In other words: the principles distilled by Collins might not be the only reasons these hand picked companies were successful.

Theory does, however, remain an important means to regulate our intuition. Before we had a consistent theory of gravity, architects were very limited by the size of buildings they could create. As our theoretical and practical knowledge of structures improved, so did the size of the buildings. Theory is required to propel human knowledge and even though management is many times more complex than skyscrapers, using only intuition will not improve our knowledge of managing organisations.

In conclusion, because management is a social science, we can not rely on theoretical models alone. Working with people requires insight and intuition that can only be obtained by life experience. However, theory is an important underpinning of our intuition and in the end, there is nothing more practical than a good theory.