There’s a lot of inane (and sometimes insane) rubbish on Twitter. 140 characters is rarely enough to say anything meaningful. Occasionally, though, someone puts something out there which just says it all.
Alex Bath stopped blogging years ago and he doesn’t say that much on Twitter but last June he came out with this gem:
Just because a person can price an Option it doesn’t mean they know how the world works.
I don’t know what made him say it but I presume that Alex, who works for an investment bank, had encountered that arrogance all too common in the City – the assumption that, just because someone has made a shedload of money doing something they are good at, it qualifies them to pontificate on…well…just about anything.
Newspapers and broadcasters collude with and reinforce this arrogance, getting various people who have made a fortune doing who knows what to comment on anything vaguely related to business or the economy. If they have gotten rich, they must know about all this businessy, economy, financey sort of stuff, mustn’t they?
The result is that you often get wealthy talking heads talking crap.
We already know that celebrity businessmen write rubbish about employment law and then continue to bluster aggressively about it even when they’ve been found out but it doesn’t stop newspapers hiring more of them to do more of the same.
Luke Johnson’s Financial Times piece on the Beecroft report was a classic of the genre. He said how much he supported Beecroft’s recommendations and how dreadful British employment law is, then went on to illustrate his point with two anecdotes, neither of which were relevant. Adrian Beecroft specifically said there should be no change to discrimination legislation. Therefore, even if his recommendations had been in place, Sarah Desrosiers would still have lost her case and Luke’s mate would still have been taken to court by those dreadful people who claimed discrimination after he downsized the company. All our business will go to China or Latin America, wailed Mr Johnson, even though, according to the OECD, these places have as much employment regulation as the UK. But why let something as inconvenient as evidence get in the way of a good rant, eh? Anyway, Mr Johnson has made so much money that he must be right about this, mustn’t he?
All this would be merely annoying if it were restricted to the media. Unfortunately, the government, too, is in thrall to the pluto-celebrities. It seems to believe that finding people who have made a lot of money and then asking them to make recommendations on running something they know nothing about is a good way to make policy. The Coalition asked Philip Green in to produce a report on public sector procurement which contained no new findings and said nothing that other people hadn’t been saying for years. And, of course, it commissioned venture capitalist Adrian Beecroft to come up with some ideas for stimulating economic growth.
Ministers and civil servants have dismissed his report as ‘flimsy’. As one said:
If officials sent ministers a piece of work like that, they’d send it back. The report is just what Beecroft thinks. There are interesting ideas. But it is not substantial enough to make government policy.
A series of assertions and very little research, it seems. But Mr Beecroft has made lots of dosh doing businessey things so why should he have to do anything so humbling as prove any of his points?
Chris Dillow comments on this disregard for research and evidence, (in different context, but it’s the same disease):
[T]hey indicate a philistinistic anti-intellectual culture, which elevates ego over rational inquiry: “never mind your evidence and hard work, just look at me and my chums.” This attitude naturally retards the growth of public knowledge about social affairs.
So, because me and my chums have made fortunes in business, our assertions about employment and the wider economy require no further proof.
But does making money in one area really qualify you to pontificate about another? Let’s say the grandees of world tennis decide to reorganise the game and re-write all the rules. They then hire David Beckham to write a report about it and make some recommendations. Well, he’s made pots of cash doing something with a ball so he must know what he’s talking about, right? Absurd suggestion isn’t it? But no more absurd than asking a venture capitalist to advise on stimulating economic growth.
There is evidence to suggest that those who have been successful in one sphere are the last people we should ask about how to be successful in another. Jenni Russell quoted some fascinating research in this piece on leadership at the weekend. Success, it seems, breeds overconfidence. Having repeated their success a couple of times, managers become convinced that they have cracked it and can apply their winning formula to any situation. This makes them less likely to listen, less likely to carry out research and more likely to make confident but unsubstantiated assertions.
Powerful people tend to turn away from advice and ignore the role that environmental factors and mere chance may have played in their success. As Harvard’s Gino and Pisano said earlier this year, success can breed failure:
The first is the inclination to make what psychologists call fundamental attribution errors. When we succeed, we’re likely to conclude that our talents and our current model or strategy are the reasons. We also give short shrift to the part that environmental factors and random events may have played.
The second impediment is overconfidence bias: Success increases our self-assurance. Faith in ourselves is a good thing, of course, but too much of it can make us believe we don’t need to change anything.
The third impediment is the failure-to-ask-why syndrome—the tendency not to investigate the causes of good performance systematically.
Which explains why bosses who go into new organisations and impose their certainties on them often have disastrous results. Applying a tried-and-tested template often fails because the template isn’t really tried and tested.
Ego is the enemy of learning – and making a lot of money gives you a big ego. Heading, as we are, into uncertain times, it might be more useful to employ someone less sure of themselves and, therefore, more likely to try to understand the problem before jumping in with recommendations.
The trouble is, in uncertain times, people clutch at certainty like drowning men cling to anything that floats. The bombastic, confident-sounding business celeb who says he has all the answers is comforting when everyone else seems so clueless. Of course, the business celebs are clueless too, it’s just that their past success blinds them to their cluelessness and enables them to assert their views with seemingly boundless confidence, which, in turn, gives everyone else confidence in them.
But it’s false confidence. To paraphrase Alex, just because a person has made a lot of money it doesn’t mean they know how to handle the worst economic crisis in living memory. No-one does – and business celebrities have no more clue than anyone else.