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Functional stupidity

Posted on Sat 01 September 2018 in Au coin du feu


stupidity paradox

I'm currently reading a 2016 book on workplace organization and the business world : "The stupidity paradox : the power and pitfalls of functional stupidity at work". It was written by two researchers in organisational behaviour and management, and questions lots of commonly held beliefs regarding the so-called intelligence of our societies.

As my reading progresses, I will try and extract the main ideas out of it with no personal comment (unless mentioned) and sum them up the best I can (given the density of the book's content). And realising how much work is involved in redacting the next articles, I add that most of the time I will not quote the sources mentioned in the book ; but don't hesistate asking for them on a particular point if you wish.

The book stems from a feeling commonly shared among friends or colleagues in anecdotal form : that most companies and organizations find themselves doing stuff that seems stupid as soon as it is appreciated with some hindsight. They seek advice from consulting companies who send them recently-graduated employees with no expertise, and do not apply their advice anyway, spend more in communicating around changes they make than in actually applying them, use mindless procedures that are never questioned, ... While all levels of society brag about the intelligence of companies, their management, their employees, and society as a whole, the reality seems to tell another story.

A few striking examples are put forward to illustrate that feeling. First among these is that of the 2008 financial crisis, which was mainly caused by the introduction a few years before by "quants" (brillant mathematicians who turned to bank and trading agencies) of financial models and products that were extremely profitable but so complicated and disconnected from reality that using them would eventually prove dangerous. Very few insiders raised warnings on those packages that had magically turned into safe investments while they were mainly made from rotten obligations. One can only get stunned by the thoughtlessness that had become the norm in those companies that were so full of smart people ; the crisis that eventually followed was a cruel reminder, and its consequences were unfortunately not limited only to those responsible for it.

The second example is that of the management methods that were promoted at Pepsi's during the "Cola wars" in the 80s. Former senior executives describe meetings that resemble cult following, with uniforms and order of entry into the room that depended on the hierarchical rank, managers that were brutally asked for explanations in the event of a single negative result, and publically humiliated in case of repeated failures, .. The employees liked to think of themselves as the "Marine Corps" of business. That extreme competition among the staff, endlessly requiring from each manager to prove his masculinity, his loyal and total devotion, his ability to handle pressure, had overall positive consequences for Pepsi, which went from a hardly-known company to Coca-Cola's major competitor ; but at what human cost ? All that, as the authors remind us, with the unique goal of selling ever more of a soda whose dietetical and sanitary qualities are well known.

The third - short but remarkable - example comes in the form of a recent psychological experience. The goal was to test the reaction students would have when faced with the obligation to think for a short period of time ; the subject was asked to remain seated all by himself in an empty room and to get entertained with his own thoughts, for 5 to 15 minutes. Most reported difficulties in staying focused, and half thought the experience was not enjoyable. Even worse, in another version of the experience, nearly half of the students elected to deliver themselves electrical shocks to keep themselves entertained instead of sitting still with only their thoughts during that rather short period of time.

The thesis of the authors that aims at giving a meaning to all those observations gives the book its title : most organizations are stuck in what they call functional stupidity, which means they get otherwise smart people to do many stupid things. The paradox holds in the fact that this stupidity often has positive consequences in the short term (which explains why it keeps sticking around), but catastrophic consequences in the long term.

They will obviously try to demonstrate this thesis in the remainder of the book, exhibiting a few facts on the way ; most jobs regarded as intellectual are not as intellectual ; seeming smart is more important than actually being smart : most people do not like to think : companies usually look for conformance instead of creativity ; letting employees think too much lowers their productivity , motivation, and short-term implication.

... many points, and yet a few others that will be expanded upon in several articles to follow !

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