Everything They Know Is Wrong

Reviews of four new business books -- one on distinguishing good management advice from bad, one on taking your company public, and two self-help prescriptions for success and happiness. Plus: What Tom Proulx, CEO of Netpulse Communications, is reading.

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When bad advice happens to good people

• Flawed Advice and the Management Trap, by Chris Argyris (Oxford University Press, 2000)

Every once in a while, a book comes along that turns prevailing management advice on its head. In 1995 it was Eileen C. Shapiro's Fad Surfing in the Boardroom, which suggested that managers should learn how to distinguish between wisdom and all the rotten advice that management-idea mongers carelessly fling around. A year later John Micklethwait and Adrian Wooldridge's The Witch Doctors concluded that very little of the most popular management advice was smart stuff that you could actually use to manage your company better.

Both books boldly challenged management fads and gurus, but neither tackled a more troubling question: If managers know that much of such advice is flawed and doesn't work, why do they continue to adhere to the latest collection of seven principles of this or that that crosses their desks?

Enter Chris Argyris, the James Bryant Conant Professor of Organizational Behavior Emeritus at Harvard Business School. For the past 20 years Argyris has been steadily challenging questionable (or just plain bad) management advice. Now, in Flawed Advice and the Management Trap: How Managers Can Know When They're Getting Good Advice and When They're Not, he explains why smart people take bad advice -- and offers some advice of his own on how to tell the difference.

Argyris argues that one of the biggest traps managers fall into is embracing the newest "Wow!" advice from brand-name gurus on how to build employee commitment. Often, he says, frontline practitioners fail to realize the difference between external commitment -- motivation that is imposed on employees -- and internal commitment, which comes from the employees themselves. When managers espouse internal commitment but really practice external commitment, as they often do when grabbing ahold of the latest guru-fed fads, they lose credibility with the employees who ultimately will be judged by measures they had no say in.

In his writing, Argyris may be a little too polite when it comes to critiquing the advice of prominent management gurus. Stephen Covey is a rare example of one who takes it on the chin. Argyris argues that the vignette Covey uses in The Seven Habits of Highly Effective People about getting his son to do yard work shows how flawed his advice is. Instead of confronting his son when he doesn't do the agreed-upon work, Argyris says, Covey covers up his true feelings. However, the son clearly knows how his father feels without any exchange of words. Covey's stated theory that trust will bring out the best in people may be "morally attractive," Argyris says, but it's not clear how "a combination of trust and mistrust, accompanied by cover-ups, will bring out the best in people."

The important lesson is that attempting new managerial approaches and testing them should be ongoing. Success "can breed conservatism," Argyris observes, "which in a fast-changing, competitive environment can cause failure."

So who ever said management was easy?

Take This Company Public

• Direct Public Offerings, by Drew Field (Sourcebooks, 1997)

In 1991, Drew Field came out with his book Take Your Company Public (New York Institute of Finance), and it made a big splash. Then, in 1997, Field, who introduced the term "direct public offering" (DPO) in that book, updated his work.

The first four chapters of Direct Public Offerings: The New Method for Taking Your Company Public -- which cover the basics of deciding whether a DPO is right for your company -- are essentially unchanged from the first work. The rest of the recent book is for the most part new and is based on Field's observations. It includes case histories of companies that have done DPOs and describes the advent of factors that have emerged since his first book came out, such as the Internet and changes in the regulatory environment that make it easier to do DPOs.

Since offering stock over the Web is still an undeveloped science, I expected Field's coverage of that subject to be minimal. It wasn't. There's enough here to give an idea of what's involved in doing a DPO on-line. And although the case studies are very short, there's enough detail to give a sense of what the companies went through and how successful they were during and after the DPO process. However, a few cases use a question-and-answer format that doesn't deliver much depth of information. There are also a couple of examples that don't deliver much of anything, such as the one on Jim Bernau and his companies, two paragraphs that seem to be included simply because Field cites Bernau as having done more DPOs than anyone else. Bernau's experiences would have been welcome information.

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