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Chapter 2: Common Sense

As Henry Mintzberg, professor of management at McGill University, said, "Management is a curious phenomenon. It is generously paid, enormously influential and significantly devoid of common sense."

Common sense is wisdom that is shared by all. It's something that registers as an obvious truth to a community.

Simple ideas tend to be obvious ideas because they have a ring of truth about them. But people distrust their instincts. They feel there must be a hidden, more complex answer. Wrong. What's obvious to you is obvious to many. That's why an obvious answer usually works so well in the marketplace.

One of the secrets of the buzzword gurus is to start with a simple, obvious idea and make it complex. A Time magazine commentary on a Stephen Covey book captured this phenomenon:

His genius is for complicating the obvious, and as a result his books are graphically chaotic. Charts and diagrams bulge from the page. Sidebars and boxes chop the chapters into bite- size morsels. The prose buzzes with the cant phrases - empower, modeling, bonding, agent of change - without which his books would deflate like a blown tire. He uses more exclamation points than Fidgets.

If you look up the dictionary definition of "common sense," you discover that it is native good judgment that is free from emotional bias or intellectual subtlety. It's also not dependent on special technical knowledge.

In other words, you are seeing things as they really are. You are followingthe dictates of cold logic, eliminating both sentiment and self-interest from your decision. Nothing could be simpler.

In the prior chapter, the new management at Procter & Gamble clearly saw the world of the supermarket as it really was: confusing. And that clarity of vision led management to the simple, commonsense strategy of simplifying things.

Consider this scenario. If you were to ask 10 people at random how well a Cadillac would sell if it looked like a Chevrolet, just about all they would say is, "Not very well."

These people are using nothing but common sense in their judgment. They have no data or research to support their conclusion. They also have no technical knowledge or intellectual subtlety. To them a Cadillac is a big expensive car and a Chevrolet is a smaller inexpensive car. They are seeing things as they really are.

But at General Motors, rather than seeing the world as it is, those in charge would rather see it as they want it to be. Common sense is ignored and the Cimarron is born. Not surprisingly, it didn't sell very well. (And we're being kind.)

Was this a lesson learned? It does not appear to be so. GM is now back with the Catera, another Cadillac that looks like a Chevrolet. Like its predecessor, it probably won't sell very well because it makes no sense. You know it and I know it. GM doesn't want to know it.

Leonardo da Vinci saw the human mind as a laboratory for gathering material from the eyes, ears, and other organs of perception - material that was then channeled through the organ of common sense. In other words, common sense is a sort of supersense that rides herd over our other senses. It's supersense that many in business refuse to trust.

Maybe we should correct that. You don't have to just be in business to ignore simple common sense. Consider the complex world of economists, a group that works hard at outwitting simple common sense.

There is nothing economists enjoy more than telling the uninitiated that plain evidence of the senses is wrong. They tend to ignore the human condition and declare that people are "maximizers of utility."

In econo-talk we become "calculators of self-interest." To economists, if we all have enough information we will make rational decisions.

Anyone who's hung around the marketing world for a while realizes that people are quite irrational at times. Right now, we're overrun by four-wheel-drive vehicles designed to travel off the road. Does anybody ever leave the road? Less than 10 percent. Do people need these vehicles? Not really. Why do they buy them? Because everyone else is buying them. How's that for "rational"?

The world cannot be put into mathematical formulas. It's too irrational. It's the way it is.

Now some words about intellectual subtlety.

A company often goes wrong when it is conned with subtle research and arguments about where the world is headed. (Nobody really knows, but many make believe they know.) These views are carefully crafted and usually mixed in with some false assumptions disguised as facts.

For example, many years ago Xerox was led to believe that in the office of the future everything - phones, computers, and copiers - would be an integrated system. (Bad prediction.) To play in this world, you needed to offer everything. Thus Xerox needed to buy or build computers and other noncopier equipment to offer in this on-rushing automated world.

Xerox was told it could do this because people saw the company as a skilled, high-technology company. (This was a false assumption. People saw it as a copier company.)

Twenty years and several billion dollars later, Xerox realized that the office of the future is still out in the future. And any Xerox machine that can't make a copy is in trouble. It was a painful lesson in technical knowledge and intellectual subtlety overwhelming good judgment.

Finally, some thoughts about a business school education, which seems to submerge common sense.

By the time students finish their first year, they already have an excellent command of the words and phrases that identify them as MBA wanna-bes. They have become comfortably familiar with jargon like "risk/reward ratio", "discounted cash flow", "pushing numbers", "expected value", and so forth.

After a while, all this uncommon language overwhelms critical thought and common sense. You get the appearance of deliberation where none may exist.

Ross Perot, in a visit to the Harvard Business School, observed, "The trouble with you people is that what you call environmental scanning, I call looking out the window."

To think in simple, commonsense terms you must begin to follow these guidelines:

1. Get your ego out of the situation. Good judgment is based on reality. The more you screen things through your ego, the farther you get from reality.

2. You've got to avoid wishful thinking. We all want things to go a certain way. But how things go are often out of our control. Good common sense tends to be in tune with the way things are going.

3. You've got to be better at listening. Common sense by definition is based on what others think. It's thinking that is common to many. People who don't have their ears to the ground lose access to important common sense.

4. You've got to be a little cynical. Things are sometimes the opposite of the way they really are. That's often the case because someone is pursuing their own agenda. Good common sense is based on the experiences of many, not the wishful thinking of some...