Building a culture of honest inquiry

I might owe Tom Peters an apology.

Last week I mentioned a Fast Company article in which Peters said he’d faked his data. According to a follow-up in Business Week shared by reader Ed Kimball, it appears Peters (and invisible co-author Robert Waterman) did nothing of the kind.

Peters reviewed and approved the Fast Company article, but now claims Fast Company’s writer, Alan Webber, invented the quote. Webber politely and obliquely disagreed. So either Tom Peters faked faking his data, or Fast Company faked his faking it for him.

Reliable evidence, and relying on evidence, is vital to making smart decisions in business. In Good to Great, Jim Collins quotes Lyle Everingham, CEO of Kroger during its transition from muddling through to 25 years of outstanding performance: “Once we looked at the facts, there was really no question about what we had to do.” A&P, its lackluster competitor, pretended. It created a new store concept, The Golden Key, to test ideas. Its executives didn’t like what its evidence told them so they closed it.

Kroger had a culture of honest inquiry — where executives, managers and employees do their best to use trustworthy evidence to drive decision-making. Creating a culture like this takes work, persistence, and sometimes political dexterity. Here are some specific measures you can take to foster a culture of honest inquiry in your workplace:

• It starts with wanting to know what’s really going on out there. Enron and WorldCom happened, in part, because their executives were so busy trying to make their companies look good that they obscured what was really going on to themselves. Your dashboards, financial reports, and other forms of organizational listening are to make you smarter. If not, don’t bother.

• Confidence comes from doubt. Certainty, in contrast, comes from arrogance. If an employee is confident and can explain why, wonderful. If that employee’s certainty pre-empts everyone else’s ability to make their case, the employee is on the wrong side of things.

• Start every decision by creating a decision process. You don’t have to be in charge to encourage this habit. Just ask the question, “How will we make this decision?” That changes the discussion away from who wins to how to create confidence in the outcome. The results: A better decision, a stronger consensus, and a few more employees who see the benefit of honest inquiry.

• Don’t create disincentives for honesty. If you ask for honest data, and use it to “hold people accountable,” you won’t get honest data. Why would you? The superior alternative is to employ people who take responsibility without external enforcement, and to create incentives for that kind of behavior. This works much better, and takes less effort.

• The “view from 50,000 feet” is for illustration, not persuasion. A high-level strategic view is essential for focusing the efforts of the organization. High-level logic, in contrast, is oxymoronic: Detailed evidence and analysis is what determines whether the high-level view makes sense, or just looks good in the PowerPoint.

• Evidence too far removed from the original source is suspect. Don’t trust summaries of summaries of summaries, especially if they tell you what you want to hear. Even with the best of intentions the game of telephone is in play. And many of those on the side of intellectual relativism don’t have the best of intentions.

• Be skeptical of those with a financial stake in the decision. But don’t ignore them. A conflict of interest suggests bias, but doesn’t automatically make someone wrong. Be wary and dig into their evidence, especially if their evidence is a summary of a summary of a summary. But if you demonstrate to your satisfaction that they’ve cooked the evidence … go ahead and ignore them from now on. They’ve earned it.

• Beware of anecdotes and metaphors. They’re useful … for illustrating a point, or for demonstrating that something is possible. For anything else you need statistically valid evidence. Yes, Disraeli said there are three types of lie. He miscounted — argument by anecdote is far more pernicious than argument by statistics, and argument by metaphor is even worse. Yes — you do have to understand statistics well enough to evaluate the evidence. Sorry. That’s part of your toolkit.

If you work in a business culture infected with intellectual relativism, it will take time and patience to build the habit of rationalism. You won’t do so by preaching and lecturing about the general principle.

The way to build a culture of honest inquiry is one decision at a time.