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Management

Six Ways to Be a Better Manager


Kill consensus and beware the false negative, says one Stanford GSB professor.
January 25, 2017 | by Bill Snyder

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Good managers buck consensus, says one Stanford GSB professor. | iStock/littlehenrabi

Do good managers look for consensus and strive to predict the future? Not according to
William Barnett, a professor of business leadership at Stanford Graduate School of
Business. Humans fear being a fool much more than they hope to be a genius, he
said during a recent discussion at the business school. Rather than risk looking foolish,
employees may opt to support a consensus view or fear to voice controversial ideas,
and that can lead to poor strategic choices for a business, he says.

Barnett says that if people in your organization are afraid that breaking from the consensus is bad
for their careers, its a sign that you need to rethink your approach.

He shared this and other insights on managing and building successful companies during a
Stanford GSB Faculty Lecture on Oct. 24. His main points:

Search for the Foolish


Geniuses make mistakes. Einsteins work, for example, contained arithmetic errors; Bob Dylan
doesnt always hit the right note, argues Barnett. But their genius is recognized. Its easy to
overlook genius when an idea seems outside the norm. In the search for genius, if you want
genius, look for systems that create foolishness, he says.

By foolishness, Barnett really means ideas that fall out of the consensus view. If a company only
approves ideas that are within the norm, it is likely missing the unconventional but potentially
groundbreaking ideas, Barnett says.

If you find a system thats creating foolishness, there might be a chance of genius, he says. If
youre finding a system that never does anything foolish, theres no way you get genius.
Look for Arguments, Not Consensus
Likewise, when it comes to a competition between business plans, avoid the consensus pick,
Barnett says. What I want to see in a business plan competition is the plan that generates the
biggest argument. For example, when Irwin Jacobs founded Qualcomm, a maker of chips for
mobile applications, no one thought that the chips could be based on a controversial technology
called CDMA (or Code Division Multiple Access). It was a non-consensus idea and a controversial
business plan. But it succeeded, and now CDMA is one of the major radio systems used in
cellphones.

Connect the Dots Looking Backward


Apples Steve Jobs presented this now famous injunction to Stanford students when he spoke at
the universitys graduation ceremony in 2005. Barnett echoed this message in his talk: Great
leaders are people who understand that it is not their job to know the future. It is their job to
create a system that discovers that future.

Trying to connect the dots (or game out all the possible outcomes of an action) is a recipe for
paralysis, Barnett says.

Look to Jobs own company for an example. In 2001, Apple Computer introduced iTunes. At the
time, Apple considered itself a computer maker and iTunes was merely a device to boost hardware
sales. But when music downloads skyrocketed, Jobs realized he could change the companys
direction by making iTunes a Windows application. Within two months, there were an additional
15 million downloads, and later Apple dropped computer from its name.

If Apple executives had connected dots forward to continue to focus on selling computers, they
would have missed this major opportunity, Barnett says.

Manage for Variance Sometimes


Managing for variance, which means allowing change and acting unpredictably, is often a good
strategy. Clearly it was for Apple. Singapore, on the other hand, stifled variance when it tried to
encourage it. In the 1990s, the country encouraged street musicians to generate a Greenwich
Village-like atmosphere but insisted they dress neatly and sing government-approved songs. Not
surprisingly, the effort failed. You see what happens when we try to control the innovation
process. We think were pushing up the mean. What were doing is were pushing down the
variance, Barnett says.

Of course, managing for variance is not appropriate in every environment, Barnett says. The
person who flies my airplane? I want them to take off and land the exact same way every time.

Think Before You Pivot


Pivoting, or moving in a sharply different direction from an early strategy, is all the rage these
days, says Barnett. [Young people] all say the word pivot all the time. So the recipe is that you
try something, it doesnt work, you pivot, and youre rich, he jokes. But handled incorrectly, a
pivot can be a major mistake. You do want to pivot if the very logic that you think is true here is
failing its test. But if all youre doing is just looking at a result without thinking through the logic of
the business, you want to think again before you pivot, Barnett says.

Beware the False Negative


Testing a strategy with data can result in actionable information. But it also could lead to a false
positive or a false negative. False positives are self-correcting. False negatives are not. If I get a
false negative, Ill pivot. And I wont realize I was right. A false positive, Im going to do it again,
Barnett says. If, for example, the early feedback on Qualcomms use of CDMA technology had
incorrectly indicated that it would not succeed and Irwin accepted that false negative, he might
well have adopted another, less successful strategy. And he would never have learned that basing
Qualcomm technology on the CDMA standard was correct.

Organizational Behavior, Leadership, Management

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