Pseudoscience and ‘success’ books - the dangers of simplifying everything.

Many of our belief systems about work are based on largely unquestioned nonsense. To understand why, we must journey back to the 1950s and 1960s when new disciplines such as organisational behaviour and management research emerged. These disciplines sought to understand the inner workings of organisations and determine how to make them more efficient. This early research gave rise to the ‘management guru’ phenomenon, epitomised by Charles Handy and W. Edwards Deming, who developed hugely influential leadership and management theories.

These theories had the same philosophical foundation as the religious and military models that preceded them, namely:

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1. Leaders can determine and control the future of the organisation.

2. Organisations behave as rational, predictable systems.

3. The right leaders with the right structures, processes, and incentives will inevitably produce the optimal outputs.

This philosophy fits our Nonsense Framework perfectly - reducing uncertainty, providing the illusion of sense-making, and promising control over the future. Despite much criticism, this philosophy still forms the foundation of almost all approaches to organisational research, MBA teaching, and leadership development today.

If you believed that leaders could determine and control the future, then you would focus your research efforts on trying to identify and isolate the leadership ‘behaviours’ or ‘characteristics’ that were predictive of success (not dissimilar to the ‘active compound’ approach in useless nutritional supplements). You would seek to do the same with organisational structures, processes, incentives, performance management, etc.

And, of course, this is precisely what has happened. But these are hugely biased starting points. Leaders can have an impact, not because they are superior beings, but because of their pure concentration of decision-making power. We have unwittingly created a vast pseudoscience industry by assuming that leadership is the dominant variable and that we can simplify the complexity of organisational life and solve all problems by just getting the ‘right’ leaders in place. There’s simply no evidence to support this belief.

In other areas of academic and scientific research, this kind of bias was largely killed off by the invention of the scientific method. The Wikipedia entry(1) for the scientific method describes it as follows:

“The scientific method involves careful observation coupled with rigorous scepticism because cognitive assumptions can distort the interpretation of the observation. Scientific inquiry includes creating a hypothesis through inductive reasoning, testing it through experiments and statistical analysis, and adjusting or discarding the hypothesis based on the results.”

The number one mantra of scientific research is that correlation does not imply causation. This refers to the inability to legitimately deduce a cause-and-effect relationship between two events or variables solely based on an observed association or correlation between them. The idea that correlation implies causation is an example of a questionable-cause logical fallacy.

For example, the divorce rate in the US state of Maine from 2000 to 2009 had an almost perfect (99.26%) correlation with the per capita consumption of margarine(2). When Maine residents ate more margarine, the divorce rate went up. When they ate less, the divorce rate went down. So, why didn’t we see conservative Christians advocating for a ban on margarine sales to protect American family life? Because that would be silly. Despite the extremely high correlation, no evidence suggests eating more margarine makes you more likely to get divorced. Correlation does not prove causation.

Yet this same fallacy is evident in vast amounts of organisational research and many bestselling business books. In what was to become a blueprint for thousands of research efforts, in 2001, the author Jim Collins, a former McKinsey consultant, released his book Good to Great(3). The book went on to sell over four million copies.

The Financial Times described the book as “…the biggest selling and most influential management book of the new millennium”, with Management Today calling it “a must-read”. The findings in the book were held up as the outcome of five years of ‘rigorous’ research into the performance of 1,435 ‘good’ companies over 40 years - finding 11 companies that became ‘great’. According to Collins, the good-to-great companies averaged cumulative stock returns of 6.9 times the general market in the 15 years after their pivot to ‘greatness’.

Collins claimed that the research showed that greatness could be explained by a framework that drove the differences in these 11 companies compared to the rest. The framework started with leaders with “a paradoxical blend of personal humility and professional will” who get “the right people on the bus,” instil a “culture of discipline,” and apply “technology accelerators.” He described these elements as “the enduring physics of great organisations”.

From a research perspective, several issues caused these conclusions to be later criticised by the media(4) and leading academics. Follow-up research(5) into the financial performance of the ‘great’ companies published in the Academy of Management Perspectives six years later concluded: “Only one of the 11 companies continues to exhibit superior stock market performance according to Collins’ measure, and none do so when measured according to a metric based on modern portfolio theory.” Oh dear. Collins’ enduring physics didn’t endure for very long.

A significant issue with the book and its methodology was the assertion that correlation implied causation, the cardinal sin of research. Just because a sample of successful companies shared some characteristics does not mean those characteristics caused their success. The reverse hypothesis is equally as plausible. Being successful could have caused these companies to behave in similar ways.

There were other issues with the methodology. Much of the research for the book involved reading press articles (not famed for accuracy or impartiality), business school case studies (typically oversimplified and prone to bias) and financial reports (one-dimensional outputs). Interviews, although there were only 84, had leading questions and failed to consider any hindsight bias on the part of the interviewees. It was hardly surprising that managers talked about leadership, customer-centricity, values, strategic focus, etc. All of these are likely to be post-success rationalisations. They reflect the factors managers had been previously conditioned to believe caused success.

However, the most fundamental issue is the implicit assumption underlying the research, namely that the skill or capability of the leaders ultimately causes business success. Collins and his team were mainly blind to the role of luck, accidental discoveries, random interactions, unforeseen trends, unintended consequences of decisions and the myriad other possibilities of complex systems. Our rational brains tend to completely ignore the role of accidental success – despite the many billions of dollars in profits generated by famously happy accidents such as the discovery of Gore-tex(6), 3M’s Post-it-Notes(7), and the runaway success of Pfizer’s accidental discovery(8) of the erection-forming side effects of an angina drug undergoing trials (now sold as Viagra). They did not look for much other than rational, linear explanations. They saw what they wanted to see based on the constraints of the mental models they held about how success could be achieved.

The book was targeted towards senior managers and executives, who one might expect, through higher-than-average levels of education, to have a greater chance of being exposed to concepts such as the scientific method. They should have had at least some critical thinking capability. So why did millions of them unquestioningly accept its conclusions? Let’s deconstruct the appeal of Good to Great using our Nonsense Framework.

Step one. Trigger aversion to uncertainty: You [executives] don’t understand how to take your companies from being good to being great. Your future is uncertain.

Step 2. Create the illusion of sense-making: Our ‘rigorous’ five years of research into over 1,400 good companies identified 11 that became great. And we know exactly how they did it: by following a repeatable framework that sets them apart.

Step 3. Promise control over the future: Buy this book and learn the lessons of greatness. You will understand the “enduring physics” of great companies that deliver over 6.9x the market return. And you will be able to become great, too.

It appears we can’t resist this type of pseudoscience despite plenty of evidence that it’s all nonsense. In his seminal 2007 book The Halo Effect and the Eight Other Business Delusions that Deceive Managers(9), business school professor Phil Rosenzweig takes the genre of ‘success books’ to task, demonstrating how poor research methodology and questionable data undermine their ‘prescriptions’ about how to succeed. The author of The Black Swan, Nassim Nicholas Taleb, described Rosenzweig’s book as “one of the most important business books of all time”.

In the aftermath of the global financial crisis in 2008, Forbes placed Rosenzweig’s book at #1 on a list of Five Must-Read Books for The Chastened CEO in 2009, suggesting that the economic downturn had brought “even the most arrogant CEOs to their knees” and created a “potentially valuable teaching moment for those would-be masters of the universe”. Unsurprisingly, the teaching moment didn’t last long, and things reverted to business as usual shortly afterwards. ‘Success books’ continue to be the most popular genre of business books.

The Billion Dollar Secret: 20 Principles of Billionaire Wealth and Success(10) by Rafael Badziag was featured in the Wall Street Journal, Forbes, USA Today, on the BBC and in Inc. and Entrepreneur magazines. According to Badziag, the book is “based on in-depth interviews with 21 self-made billionaires” and “teaches you how to think like a billionaire and achieve amazing success in business”.

Why do we believe we will be more successful if we adopt the waking-up routines, exercise regimes, meditation habits, and diets of a few billionaires? This is ridiculous on many levels. Let’s take just two. Firstly, the sample size of this ‘research’ is tiny and not at all random (just 21 people, all chosen by the author, all billionaires) - going against all research best practices. Enlarging the sample size to thousands of randomly selected people would likely show that many far less successful people had similar routines. It would likely also show that other groups of very successful people had entirely different routines. Secondly, we come back to the questionable-cause logical fallacy. An implicit cause-and-effect assumption is at play here that has no basis in reality. Why do we think that habits are the root cause of success? What about education, parents, background, location, network, experience, opportunity, luck, accidental discovery, being in the right place at the right time and a million other variables? It’s all nonsense.

Stephen Bartlett’s bestselling 2023 book, The Diary of a CEO: The 33 Laws of Business and Life(11), claims to have deduced a set of principles from his ‘journey’ and his podcast interviews that are “the fundamental laws that will ensure excellence”, a “set of principles that can stand the test of time, apply to any industry, and be used by anyone who is search of building something great or becoming someone great”. He modestly claims that these “laws” will work “now or 100 years from now”. Sound familiar? It’s beyond ridiculous.

Maybe these books contain some insights, good stories, and nuggets of wisdom from interesting people. If nothing else, they might inspire people to have greater ambition. But we must collectively learn to refute the utter nonsense of ‘laws’ or ‘principles’ that claim to explain past and future success in life and business universally. There is no evidence that such things exist in a complex world. The next time you are in a bookshop, make a conscious effort to resist the siren call of the success book.

Excerpts from Magnetic Nonsense: A Short History of Bullshit at Work and How to Make it Go Away

1. https://en.wikipedia.org/wiki/Scientific_method

2. https://blogs.ams.org/blogonmathblogs/2017/04/10/divorce-and-margarine/

3. Good To Great: Why Some Companies Make the Leap... and Others Don’t, Jim Collins, Random House Business, October 2001

4. Luck Inc,. Drake Bennett, Boston Globe, April 13th 2009

5. From Good to Great to…Bruce G. Resnick and Timothy L. Smunt, Academy of Management Perspectives VOL. 22, NO. 4, November 2008

6. https://en.wikipedia.org/wiki/Gore-Tex

7. https://en.wikipedia.org/wiki/Post-it_note

8. https://en.wikipedia.org/wiki/Sildenafil

9. The Halo Effect: .and the Eight Other Business Delusions That Deceive Managers, Phil Rosenzweig, Simon & Schuster, May 2007

10. The Billion Dollar Secret: 20 Principles of Billionaire Wealth and Success, Rafael Badziag et al., Panoma Press, June 2019

11. The Diary of a CEO: The 33 Laws of Business and Life, Stephen Bartlett, Ebury Edge, August 2023