Simon Caulkin writes a management column in the Observer, a UK-based paper, and has written a couple columns that draw on ideas from Hard Facts. His first one, back in March, has the kind charming title that you don’t get in the states “Bosses in Love with Claptrap and Blinded by Ideologies.” Caulkin recently wrote a column called “You Could be a Genius - If Only You had a Good System,” which draws a bit on our chapter on talent in Hard Facts. He uses recent examples of failures by British sporting teams to show how coaches and critics focus on “naming and shaming” individual athletes, rather than on problems with the system.

This tendency to look for individual goats – and heroes – isn’t just a problem that permeates the world of sports. It is reflected in many misguided ideologies and management practices, which focus excessive energy on hiring stars and weeding-out mediocre and poor performers, and insufficient energy on building a great system that enables most competent people to succeed.



I agree – and can show you evidence – that there are huge differences in individual skill and ability in every occupation. BUT we’ve also got a lot of evidence that ordinary people can perform at top levels in a well-designed system, and even a superstar is doomed to fail in a bad system. Unfortunately, HR and too many other executives believe the advice in books like The War For Talent. (In fact, one of the authors is now head of HR at eBay.. perhaps another reason to short the stock). This is one of the worst management books ever written in my opinion: There is bad evidence from the authors’ own research, no mention of a massive body of research that contradicts many of their claims, and excessive claims are made that if leaders follow the authors’ advice, they can expect “expect a huge impact in a year.”



I will focus on just one claim from this bad book. I quote the authors, “We call it the Rule of Crappy People: Bad managers hire very, very bad employees, because they are threatened by anyone who is anywhere near as good as they are.” This claim is bold, but can’t be supported by any systematic research that I can find. There is evidence that people hire others like themselves, so a reasonable inference is that crappy people will hire equally crappy people -- but there is no direct evidence on that hypothesis. I spent weeks and weeks trying to find even a hint that a single article in a peer reviewed journal supported the belief that bad performers systematically hire even worse performers. It is one of those management myths that don’t appear to have any empirical basis.

The worst part about focusing on keeping out crappy people, however, is that it reflects a belief system that “the people make the place.” The implication is that, once you hire great people and get rid of the bad ones, your work is pretty much done. Yet if you look at large scale studies in everything from automobile industry to the airline industry, or look at Diane Vaughn’s fantastic book on the space shuttle Challenger explosion and the well-crafted report written by the Columbia Accident Investigation Board , the evidence is clear: The “rule of law crappy systems” trumps the “rule of crappy people.”

Sure, people matter a lot, but as my colleague Jeff Pfeffer puts it, some systems are so badly designed that when smart people with a great track record join them, it seems as if a “brain vacuum” is applied, and they turn incompetent. Jeff often jokes that this is what happens to many business school deans, and indeed, these jobs have so many competing and conflicting demands that they are often impossible to do well.

If you want to see a more chilling and systematic analysis, read the chapter by the Columbia Accident Investigation Board that compares the Challenger explosion with the Columbia accident. Sally Ride, the first American woman in space, comments about the “remarkable echoes” of the Challenger accident that can be seen in the Columbia fiasco. Indeed, there was close to 100% turnover at NASA between the two accidents, but the system was largely unchanged. According to the report (which is more useful and better written than most management books), NASA remained a dysfunctional bureaucracy where, rather than deferring to people with the greatest expertise, administrators believed that “an allegiance to hierarchy, procedure, and following the chain of command” decreased the odds of failure. People with greater power ignored and stifled, and overturned recommendations people with more expertise but less power. As a result, the Board warned “NASA’s problems cannot be solved simply by retirements, resignations, or transferring personnel.”

As we discuss in Hard Facts, an interesting contrast is The U.S. civil aviation system. It is one the safest in the world and has become even safer over time, partly because of its accident and incident reporting system. This system permits pilots (and others) to report incidents to the Federal Aviation Administration such as near misses and equipment problems. The agency follows up on these reports and takes action to repair root causes of problems.

There are smart people in both the FAA and NASA (in fact, people from NASA run key parts of the accident reporting system), but one system is difficult to succeed in because it is crappy. And the other is comparatively easy to succeed in because it is well designed. Again, I still believe that people matter. The very best organizations have both smart people and well-designed systems – Google seem to qualify and so does Cisco.