These days, people know a lot. Thousands of business books are published around the world each year. U.S. organizations alone spend more than $60 billion a year on training -- mostly on management training. Companies spend billions of dollars a year on consulting. Meanwhile, more than 80,000 MBAs graduate each year from U.S. business schools. These students presumably have been taught the skills that they need to improve the way that companies do business.
But all of that state-of-the-art knowledge leaves us with a nagging question: Why can't we get anything done? It's a mystery worthy of a business-school case study. If we're so well trained and so well informed, then why aren't we a lot more effective? Or, as Stanford professors Jeffrey Pfeffer and Robert I. Sutton ask in their useful book, The Knowing-Doing Gap: How Smart Companies Turn Knowledge Into Action (Harvard Business School Press, 2000), "Why is it that, at the end of so many books and seminars, leaders report being enlightened and wiser, but not much happens in their organizations?"
To answer that question, Fast Company talked to Jeffrey Pfeffer, 53, the Thomas D. Dee Professor of Organizational Behavior at Stanford Graduate School of Business. Here, Pfeffer offers 16 rules that explain why, despite so much knowing, there's so little doing -- and what you can do to get something done in your company.
1. Doing something requires ... doing something!
One culpable party is the literature of knowledge management -- almost the cult of knowledge management -- that has grown over the past few years. Advocates of knowledge management as "the next big thing" have advanced the proposition that what companies need is more intellectual capital. While that is undeniably true, it's only partly true. What those advocates are forgetting is that knowledge is only useful if you do something with it.
The reason that we've fallen into this knowing-doing gap is this: Doing something actually requires doing something! It means tackling the hard work of making something happen. It's much easier and much safer to sit around and have intellectual conversations, to gather large databases, to invest in technical infrastructure -- and never actually implement anything.
Compare all of this knowing with the good old Yankee ingenuity of the past -- or even with Bill Gross's idealab! of today. Around the turn of the century, Edison Labs was a place filled with people who were tinkering and doing. Thomas Edison did more than create great inventions; he built a place where people tested their ideas, occasionally blew things up, and then tried again. The closest thing to that today is idealab!, which, in spite of its name, isn't just about ideas. Idealab! is a fabulous example of an organization that not only has ideas but also tests those ideas and turns them into action. It's the same spirit that existed at Edison Labs. But unfortunately, most companies today are too far removed from that spirit.
2. Would you let a great talker perform heart surgery on you?
Today, there are experts on everything except how to get things done. And we reward that expertise -- in the IPO market, in the academic world, and in the job market. For example, there's no question that the stock market has had an influence on the business shift from doing to knowing. The market has made it eminently clear that it is willing to pay -- and pay well -- for ideas. Whether you can actually execute those ideas or not is irrelevant. Today, there are countless companies that have come up with great ideas but can't implement them. But the market still rewards those companies.
The educational establishment must take some responsibility for this problem. Think about what business schools do: They train people to talk about ideas. But the one thing that business schools don't do is train students to do anything.
Ask yourself this question: Would you undergo heart surgery if the surgeon had been trained in the same way that business-school students are trained? Imagine that the surgeon had sat around in medical school discussing heart-surgery cases, watching heart-surgery videos, and listening to great heart surgeons talk about what they did -- and now you're lying on the operating table, that surgeon's first real patient. Would you actually let that surgeon cut you open? I don't think so!
The truth is that business school is all about talking, not doing. And what's one of the top jobs that B-school students take when they graduate? Management consulting! I've always found the job market to be perplexing for this reason: You can be a plant manager -- actually have what it takes to run a plant -- and make $80,000 to $100,000 a year. Or you can talk about plant management and make twice that. Why do people get paid more for talking about things than they do for actually doing them? The message from the job market is that it's more important and more valuable to be clever than it is to have the ability to make something happen.
3. Do you think that you can outthink the competition?
The good news is that companies are beginning to recognize that it's not only critical to know; it's also very important to do. We've been through the phase in which every company thought that it could outthink the competition. And, in fact, companies were able to outthink the competition -- for a while. But today, the advantage that you get from outthinking the competition lasts an incredibly short period of time. Put simply, the speed with which your competitors can copy even the best idea has increased much faster than the advantage that you get from having come up with that idea in the first place.
Look at what's happened with patents: The economic life span of most patents has decreased. The time lag between coming up with an idea, introducing that new idea to the market, and having it copied has decreased. And that's happening in a variety of industries, both in products and in services. So while having knowledge is useful, it's not sufficient. It gives you much less competitive leverage than it once did.
4. Doing means learning. Learning means mistakes.
If companies genuinely want to move from knowing to doing, they need to build a forgiveness framework -- a tolerance for error and failure -- into their culture. A company that wants you to come up with a smart idea, implement that idea quickly, and learn in the process has to be willing to cut you some slack. You need to be able to try things, even if you think that you might fail.
The absolute opposite mind-set is one that appears to be enjoying a lot of favor at the moment: the notion that we have to hold people accountable for their performance. Companies today are holding their employees accountable -- not only for trying and learning new things, but also for the results of their actions. If you want to see how that mind-set affects performance, compare the ways that American Airlines and Southwest Airlines approach accountability -- and then compare those two airlines' performances.
American Airlines has decided to emphasize accountability, right down to the departmental -- and even the individual -- level. If a plane is late, American wants to know whose fault it is. So if a plane is late, what do American employees do? They spend all of their time making sure that they don't get blamed for it. And while everyone is busy covering up, no one is thinking about the customer.
Southwest Airlines has a system for covering late arrivals: It's called "team delay." Southwest doesn't worry too much about accountability; it isn't interested in pinning blame. The company is interested only in getting the plane in the air and in learning how to prevent delays from happening in the future.
Now ask yourself this: If you're going to be held accountable for every mistake that you make, how many chances are you going to take? How eager are you going to be to convert your ideas into actions?
5. Have no fear.
One of the most pervasive emotions in the American workplace today is fear. The reason that there is so much fear is that everybody wants to build a learning organization, but nobody actually wants anyone to learn. Learning requires tolerating people who make mistakes. Learning requires tolerating inefficiency. Learning requires tolerating failure. Learning requires letting people try things that they've never done before, things that they probably won't be very good at the first time around.
Look at a company like AES Corp.: It's completely out of control! At AES, people are doing things that they've never done before, trying things that are beyond their existing abilities. Now, either you can ask, "How can they do that?" or you can ask, "Why doesn't everybody do that?" The only way that people can learn is by doing things that they've never done before. If we do only what we already know how to do, then we won't ever learn anything new.
6. Learning comes at a price. Pay it.
The truth is that there's no easy way to encourage people to learn. You have to accept the fact that there's always going to be a trade-off between proficiency and learning. Learners are never as proficient as experts. So learning comes at a price. The price is that the experts might not get to use their expertise and that the learners might make mistakes. Go back to AES. At AES, everyone thinks like a businessperson, and thousands of people are able to do lots of different things. But the company pays a price for that -- and the price that it pays is the cost of all of that learning. If you genuinely want to build a learning organization, you have to be prepared to make the necessary trade-offs and to pay the price.
7. Who me? I saw nothing! Honest!
Another side effect of fear is that it absolutely retards the flow of information inside a company. So you have this anomaly: Companies pat themselves on the back as knowledge-management businesses, but because nobody wants to be the bearer of bad news, nobody inside those companies knows what the hell is going on. A famous quote by producer Sam Goldwyn sums up that point well: "I want everybody to tell me the truth -- even though it costs him his job."
Yet another side effect is that fear causes individuals to focus only on the short term and on their own survival. I used to teach a case study about a company that made brakes for airplanes. The case described a chain of events in which workers ultimately falsified the performance of the brakes: They filed papers that falsely attested to the brakes' capabilities. I asked my class a question: Why would you falsify documents when you know that there is absolutely no chance of the problem going undetected? Sooner or later, somebody's going to fly in a plane, the brakes are going to fail, and the problem will come to light. It's inevitable! So why lie?
The answer is that if there's enough fear in the workplace, you don't worry about what's going to happen eventually. You don't even worry about what's going to happen tomorrow. You worry only about today: Can I get through today?
8. Talk ain't cheap. It's expensive -- and destructive.
Companies often confuse talking with doing. They think that talking about doing something is the same thing as doing it! That planning is the same as doing. That giving presentations is the same as doing. That making reports is the same as doing. Or even that making a decision to do something is the same as doing it. All of those errors occur with alarming regularity in companies today.
Mistaking talk for action is worse than just a simple error: Talk can actually drive out action. Studies about the way that meetings actually work demonstrate that negative people are perceived as being smarter than positive people -- that is, being critical is interpreted as a sign of intelligence. You see this attitude in business all the time: The fastest way for me to seem smart is to cut you down. So you come up with an idea, and I come up with a thousand different reasons why that idea won't work. Now everyone sees you as dumb and me as smart -- and we've created an environment where no one wants to come up with ideas.
9. Decisions, by themselves, are empty.
The other trap that companies and people fall into is confusing making a decision with making something happen. First, we become obsessed with making the right decision -- which becomes a major obstacle to trying something to see if it works. Then we forget a simple fact: that a decision by itself changes nothing. A decision is the beginning of the process of doing, not the end of that process.
And so we work at making good decisions. Did we make the right decision? Did we have all of the information that we needed to make the decision? Is it possible that a better decision could have been made if better information had been produced? Well, it's always better to make a good decision than a bad decision -- but just making a decision doesn't change anything! Did you implement the decision? Did you actually do anything?
10. Oh no! Not another program!
One of the biggest enemies of getting something done is the dreaded "P" word: "program." Whenever you hear that a company is about to "roll out a program," it's not good news. It suggests that the company is about to spend all of its time worrying about the content of the program, rather than learning by doing. David Kelley, founder and CEO of Ideo Product Development, has it right: "Enlightened trial and error outperforms the planning of flawless intellects."
No matter how smart you are, you can't preplan everything and then roll out your program. What you want to do is to try some stuff and see what happens. And by the way, "enlightened trial and error" is the perfect antidote to the cynicism that exists in many organizations whose people have seen programs come and go. I recently visited a company whose CEO is famous for coming up with a new program every year. One year it's Six Sigma, the next it's Total Quality Management, the next it's customer satisfaction. Every year, that company's troops go through a bunch of plans and processes. And in the end, they've learned to do nothing at all.
11. Why do we do it that way? Um ...
Another huge obstacle to doing in companies is corporate memory: The memory of "how we've always done things around here" substitutes for "doing things the right way around here." The root, again, is fear. People don't want to make mistakes, and the best way to avoid making a mistake is to continue doing things exactly as they've always been done. Companies get trapped in a kind of circular logic: "We do what we do because it's the best thing to do. And it's the best thing to do because it's what we've always done."
After a while, what was originally adopted as a means to an end becomes an end in itself. There is no function that is more culpable in this regard than human resources. In company after company, the human-resources department puts into place a whole bunch of policies that undoubtedly started with good intentions. But in time, those policies, which originally were just a means to an end, become ends in themselves. And nobody remembers what outcome those policies were actually intended to produce.
What you end up with are sacred cows -- things that you take for granted; processes, practices, and rules that you think will help you get things done. In reality, all they do is get in the way of getting things done.
12. Professor Otis Redding will now address the class.
There's an old saying in business: What gets measured is what gets done. What's happening today is the flip side of that. Measurement has become a tyranny that makes sure that nothing gets done.
I've developed what I like to call the Otis Redding Theory of Measurement, which is named for his song "(Sittin' on) The Dock of the Bay." In that song, Redding sings, "I can't do what 10 people tell me to do, so I guess I'll remain the same." That line sounds as if it could be about companies' misconceptions about measurement.
Companies have managed to convince themselves that, since what gets measured is what gets done, the more they measure, the more stuff will get done. Last summer, I met a woman who works for a large oil company, and she told me that the company has 105 measures for which she is responsible. So I asked her, "How many of those 105 measures do you pay attention to?" Her answer? "None." Because in the end, she's measuring so many things that she doesn't pay attention to any of them -- 105 equals zero.
13. Sure, it's a measurement -- but is it important?
Here's another measurement problem: You can measure the wrong things. General Motors is a perfect example of this; it's measurement central. GM can tell you about everything having to do with a car's outcome: how much of every kind of material went into a car's manufacture, how many defects it has, how many hours of labor went into making it. The company has about 1,000 measures of outcome. But what GM doesn't have (yet) are process measures. And without process measures, you don't know where to intervene to change outcomes. Measurement can, in fact, be crucial to achieving the right kinds of action -- but you must do the right measurements.
14. Pogo would be proud!
Another piece of corporate behavior that prevents companies from implementing good ideas is ugly internal competition. American business has fallen in love with the idea that the best way to get people to do things well is to have them compete with one another. That mind-set derives from a sloppy sports analogy: People run faster if they run against someone else. That may be true for track, but when it comes to learning, people learn best when they're operating in a mode that is less competitive.
Companies that adopt internal competition as their operating style might as well post as their corporate mission statement that famous saying from the comic strip "Pogo": "We have met the enemy, and it is us." I remember talking with the people at Southwest Airlines shortly after its leader, Herb Kelleher, was the subject of a "Fortune" article on what makes a good CEO ("Is Herb Kelleher America's Best CEO?" May 2, 1994). The reaction inside the company was, Now we're in trouble. Because when a company becomes that successful, people inside that company start to pick at one another. And what Southwest employees ended up saying to me was, "Thank God for the United Airlines shuttle!" It took a little of that good old external competition for Southwest to remember that the real adversary is on the outside, not on the inside.
15. What do I do? When do I get started?
So what's the remedy? The remedy is to do something! San Francisco 49ers head coach Steve Mariucci once said, "I never wear a watch, because I always know it's now -- and now is when you should do it."
If you want the future to be better than the present, you have to start working on it immediately. Remember: What you want is better than, not optimal. Your job is to do something today that's better than what you did yesterday. And to do something tomorrow that's better than what you did today.
16. Make knowing and doing the same thing.
The challenge for companies -- and for individuals inside those companies -- is to build a culture of action. The best description of the knowing-doing gap that I've ever heard came from a woman in one of my executive programs. She said, "Benchmarking is very popular today -- but companies benchmark the wrong thing. They benchmark what other companies do, when they should be benchmarking how those companies think."
In the retail world, companies benchmark the Men's Wearhouse. The Men's Wearhouse pays people on commission. And if employees sell more than $500 at one time, the company pays them a bigger commission. Other companies have adopted that system.
But what other companies don't do is look at the underlying thinking that drives that system. Founder and CEO George Zimmer had a great insight that is the key to the success of the Men's Wearhouse. He started with a question: Where is the power in retail? Most people think that the power in retail is in buying the merchandise -- that if you want to rise to the top of retail, you need to be in buying. But Zimmer had a blinding grasp of the obvious: You don't make money when you buy the merchandise -- you make money when you sell the merchandise! If you adopt that idea as the basis for how you run your company, what do you do differently? You put more emphasis on store operations. You put more emphasis on training your salespeople. If you look at everything that Zimmer does at the Men's Wearhouse, you'll see that it all connects back to one fundamental idea: that in retail, selling is the key to success.
Here's another example. Southwest Airlines is premised on another blinding grasp of the obvious: People do not pay to sit in the Dallas-Fort Worth Airport. People pay to get from once place to another. It sounds simple, but it's very hard to get people to have the courage, the wisdom, and the insight to see beyond what everybody else is doing -- and to take notice of the obvious, unexamined, and unacted-upon truths.
One final insight: For successful companies, there is no knowing-doing gap. There is no difference between how they think, who they are, and what they do.
Alan M. Webber (email@example.com) is a Fast Company founding editor. Contact Jeffrey Pfeffer by email (firstname.lastname@example.org).[Image: Flickr user Ars Electronica]