What the Dog Saw and Other Adventures

by Malcolm Gladwell

  In the early 1990s, the psychologists Robert Hogan, Robert Raskin, and Dan Fazzini wrote a brilliant essay called “The Dark Side of Charisma.” It argued that flawed managers fall into three types. One is the High Likability Floater, who rises effortlessly in an organization because he never takes any difficult decisions or makes any enemies. Another is the Homme de Ressentiment, who seethes below the surface and plots against his enemies. The most interesting of the three is the Narcissist, whose energy and self-confidence and charm lead him inexorably up the corporate ladder. Narcissists are terrible managers. They resist accepting suggestions, thinking it will make them appear weak, and they don’t believe that others have anything useful to tell them. “Narcissists are biased to take more credit for success than is legitimate,” Hogan and his coauthors write, and “biased to avoid acknowledging responsibility for their failures and shortcomings for the same reasons that they claim more success than is their due.” Moreover:

  Narcissists typically make judgments with greater confidence than other people… and, because their judgments are rendered with such conviction, other people tend to believe them and the narcissists become disproportionately more influential in group situations. Finally, because of their self-confidence and strong need for recognition, narcissists tend to “self-nominate”; consequently, when a leadership gap appears in a group or organization, the narcissists rush to fill it.

  Tyco Corporation and WorldCom were the Greedy Corporations: they were purely interested in short-term financial gain. Enron was the Narcissistic Corporation — a company that took more credit for success than was legitimate, that did not acknowledge responsibility for its failures, that shrewdly sold the rest of us on its genius, and that substituted self-nomination for disciplined management. At one point in Leading the Revolution, Hamel tracks down a senior Enron executive, and what he breathlessly recounts — the braggadocio, the self-satisfaction — could be an epitaph for the talent mind-set:

  “You cannot control the atoms within a nuclear fusion reaction,” said Ken Rice when he was head of Enron Capital and Trade Resources (ECT), America’s largest marketer of natural gas and largest buyer and seller of electricity. Adorned in a black T-shirt, blue jeans, and cowboy boots, Rice drew a box on an office whiteboard that pictured his business unit as a nuclear reactor. Little circles in the box represented its “contract originators,” the gunslingers charged with doing deals and creating new businesses. Attached to each circle was an arrow. In Rice’s diagram the arrows were pointing in all different directions. “We allow people to go in whichever direction that they want to go.”

  The distinction between the Greedy Corporation and the Narcissistic Corporation matters, because the way we conceive our attainments helps determine how we behave. Carol Dweck, a psychologist at Columbia University, has found that people generally hold one of two fairly firm beliefs about their intelligence: they consider it either a fixed trait or something that is malleable and can be developed over time. Dweck once did a study at the University of Hong Kong, where all classes are conducted in English. She and her colleagues approached a large group of social-sciences students, told them their English-proficiency scores, and asked them if they wanted to take a course to improve their language skills. One would expect all those who scored poorly to sign up for the remedial course. The University of Hong Kong is a demanding institution, and it is hard to do well in the social sciences without strong English skills. Curiously, however, only the ones who believed in malleable intelligence expressed interest in the class. The students who believed that their intelligence was a fixed trait were so concerned about appearing to be deficient that they preferred to stay home. “Students who hold a fixed view of their intelligence care so much about looking smart that they act dumb,” Dweck writes, “for what could be dumber than giving up a chance to learn something that is essential for your own success?”

  In a similar experiment, Dweck gave a class of preadolescent students a test filled with challenging problems. After they were finished, one group was praised for its effort and another group was praised for its intelligence. Those praised for their intelligence were reluctant to tackle difficult tasks, and their performance on subsequent tests soon began to suffer. Then Dweck asked the children to write a letter to students at another school, describing their experience in the study. She discovered something remarkable: 40 percent of those students who were praised for their intelligence lied about how they had scored on the test, adjusting their grade upward. They weren’t naturally deceptive people, and they weren’t any less intelligent or self-confident than anyone else. They simply did what people do when they are immersed in an environment that celebrates them solely for their innate “talent.” They begin to define themselves by that description, and when times get tough and that self-image is threatened, they have difficulty with the consequences. They will not take the remedial course. They will not stand up to investors and the public and admit that they were wrong. They’d sooner lie.

  4.

  The broader failing of McKinsey and its acolytes at Enron is their assumption that an organization’s intelligence is simply a function of the intelligence of its employees. They believe in stars, because they don’t believe in systems. In a way, that’s understandable, because our lives are so obviously enriched by individual brilliance. Groups don’t write great novels, and a committee didn’t come up with the theory of relativity. But companies work by different rules. They don’t just create; they execute and compete and coordinate the efforts of many different people, and the organizations that are most successful at that task are the ones where the system is the star.

  There is a wonderful example of this in the story of the so-called Eastern Pearl Harbor, of the Second World War. During the first nine months of 1942, the United States Navy suffered a catastrophe. German U-boats, operating just off the Atlantic coast and in the Caribbean, were sinking our merchant ships almost at will. U-boat captains marveled at their good fortune. “Before this sea of light, against this footlight glare of a carefree new world were passing the silhouettes of ships recognizable in every detail and sharp as the outlines in a sales catalogue,” one U-boat commander wrote. “All we had to do was press the button.”

  What made this such a puzzle is that, on the other side of the Atlantic, the British had much less trouble defending their ships against U-boat attacks. The British, furthermore, eagerly passed on to the Americans everything they knew about sonar and depth-charge throwers and the construction of destroyers. And still the Germans managed to paralyze America’s coastal zones.

  You can imagine what the consultants at McKinsey would have concluded: they would have said that the Navy did not have a talent mind-set, that President Roosevelt needed to recruit and promote top performers into key positions in the Atlantic command. In fact, he had already done that. At the beginning of the war, he had pushed out the solid and unspectacular Admiral Harold R. Stark as Chief of Naval Operations and replaced him with the legendary Ernest Joseph King. “He was a supreme realist with the arrogance of genius,” Ladislas Farago writes in The Tenth Fleet, a history of the Navy’s U-boat battles in the Second World War. “He had unbounded faith in himself, in his vast knowledge of naval matters and in the soundness of his ideas. Unlike Stark, who tolerated incompetence all around him, King had no patience with fools.”

  The Navy had plenty of talent at the top, in other words. What it didn’t have was the right kind of organization. As Eliot A. Cohen, a scholar of military strategy at Johns Hopkins, writes in his brilliant book Military Misfortunes in the Atlantic:

  To wage the antisubmarine war well, analysts had to bring together fragments of information, direction-finding fixes, visual sightings, decrypts, and the “flaming datum” of a U-boat attack — for use by a commander to coordinate the efforts of warships, aircraft, and convoy commanders. Such synthesis had to occur in near “real time” — within hours, even minutes in some cases.

  The British excelled at the t
ask because they had a centralized operational system. The controllers moved the British ships around the Atlantic like chess pieces, in order to outsmart U-boat “wolf packs.” By contrast, Admiral King believed strongly in a decentralized management structure: he held that managers should never tell their subordinates “how as well as what to ‘do.’ ” In today’s jargon, we would say he was a believer in “loose-tight” management, of the kind celebrated by the McKinsey consultants Thomas J. Peters and Robert H. Waterman in their 1982 bestseller, In Search of Excellence. But “loose-tight” doesn’t help you find U-boats. Throughout most of 1942, the Navy kept trying to act smart by relying on technical know-how, and stubbornly refused to take operational lessons from the British. The Navy also lacked the organizational structure necessary to apply the technical knowledge it did have to the field. Only when the Navy set up the Tenth Fleet — a single unit to coordinate all antisubmarine warfare in the Atlantic — did the situation change. In the year and a half before the Tenth Fleet was formed, in May of 1943, the Navy sank thirty-six U-boats. In the six months afterward, it sank seventy-five. “The creation of the Tenth Fleet did not bring more talented individuals into the field of ASW” — antisubmarine warfare — “than had previous organizations,” Cohen writes. “What Tenth Fleet did allow, by virtue of its organization and mandate, was for these individuals to become far more effective than previously.” The talent myth assumes that people make organizations smart. More often than not, it’s the other way around.

  5.

  There is ample evidence of this principle among America’s most successful companies. Southwest Airlines hires very few MBAs, pays its managers modestly, and gives raises according to seniority, not “rank and yank.” Yet it is by far the most successful of all United States airlines, because it has created a vastly more efficient organization than its competitors have. At Southwest, the time it takes to get a plane that has just landed ready for takeoff — a key index of productivity — is, on average, twenty minutes, and requires a ground crew of four, and two people at the gate. (At United Airlines, by contrast, turnaround time is closer to thirty-five minutes, and requires a ground crew of twelve, and three agents at the gate.)

  In the case of the giant retailer Wal-Mart, one of the most critical periods in its history came in 1976, when Sam Walton “unretired,” pushing out his handpicked successor, Ron Mayer. Mayer was just over forty. He was ambitious. He was charismatic. He was, in the words of one Walton biographer, “the boy-genius financial officer.” But Walton was convinced that Mayer was, as people at McKinsey would say, “differentiating and affirming” in the corporate suite, in defiance of Wal-Mart’s inclusive culture. Mayer left, and Wal-Mart survived. After all, Wal-Mart is an organization, not an all-star team. Walton brought in David Glass, late of the Army and Southern Missouri State University, as CEO; the company is now ranked No. 1 on the Fortune 500 list.

  Procter & Gamble doesn’t have a star system, either. How could it? Would the top MBA graduates of Harvard and Stanford move to Cincinnati to work on detergent when they could make three times as much reinventing the world in Houston? Procter & Gamble isn’t glamorous. Its CEO is a lifer — a former Navy officer who began his corporate career as an assistant brand manager for Joy dishwashing liquid — and if Procter & Gamble’s best played Enron’s best at Trivial Pursuit, no doubt the team from Houston would win handily. But Procter & Gamble has dominated the consumer-products field for close to a century, because it has a carefully conceived managerial system, and a rigorous marketing methodology that has allowed it to win battles for brands like Crest and Tide decade after decade. In Procter & Gamble’s Navy, Admiral Stark would have stayed. But a cross-divisional management committee would have set the Tenth Fleet in place before the war ever started.

  6.

  Among the most damning facts about Enron, in the end, was something its managers were proudest of. They had what, in McKinsey terminology, is called an open market for hiring. In the open-market system — McKinsey’s assault on the very idea of a fixed organization — anyone could apply for any job that he or she wanted, and no manager was allowed to hold anyone back. Poaching was encouraged. When an Enron executive named Kevin Hannon started the company’s global broadband unit, he launched what he called Project Quick Hire. A hundred top performers from around the company were invited to the Houston Hyatt to hear Hannon give his pitch. Recruiting booths were set up outside the meeting room. “Hannon had his fifty top performers for the broadband unit by the end of the week,” Michaels, Handfield-Jones, and Axelrod write, “and his peers had fifty holes to fill.” Nobody, not even the consultants who were paid to think about the Enron culture, seemed worried that those fifty holes might disrupt the functioning of the affected departments, that stability in a firm’s existing businesses might be a good thing, that the self-fulfillment of Enron’s star employees might possibly be in conflict with the best interests of the firm as a whole.

  These are the sorts of concerns that management consultants ought to raise. But Enron’s management consultant was McKinsey, and McKinsey was as much a prisoner of the talent myth as its clients were. In 1998, Enron hired ten Wharton MBAs; that same year, McKinsey hired forty. In 1999, Enron hired twelve from Wharton; McKinsey hired sixty-one. The consultants at McKinsey were preaching at Enron what they believed about themselves. “When we would hire them, it wouldn’t just be for a week,” one former Enron manager recalls, of the brilliant young men and women from McKinsey who wandered the hallways at the company’s headquarters. “It would be for two to four months. They were always around.” They were there looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.

  July 22, 2002

  The New-Boy Network

  WHAT DO JOB INTERVIEWS REALLY TELL US?

  1.

  Nolan Myers grew up in Houston, the elder of two boys in a middle-class family. He went to Houston’s High School for the Performing and Visual Arts and then Harvard, where he intended to major in history and science. After discovering the joys of writing code, though, he switched to computer science. “Programming is one of those things you get involved in, and you just can’t stop until you finish,” Myers says. “You get involved in it, and all of a sudden you look at your watch and it’s four in the morning! I love the elegance of it.” Myers is short and slightly stocky and has pale-blue eyes. He smiles easily, and when he speaks he moves his hands and torso for emphasis. He plays in a klezmer band called the Charvard Chai Notes. He talks to his parents a lot. He gets Bs and B-pluses.

  In the last stretch of his senior year, Myers spent a lot of time interviewing for jobs with technology companies. He talked to a company named Trilogy, down in Texas, but he didn’t think he would fit in. “One of Trilogy’s subsidiaries put ads out in the paper saying that they were looking for the top tech students, and that they’d give them two hundred thousand dollars and a BMW,” Myers said, shaking his head in disbelief. In another of his interviews, a recruiter asked him to solve a programming problem, and he made a stupid mistake and the recruiter pushed the answer back across the table to him, saying that his “solution” accomplished nothing. As he remembers the moment, Myers blushes. “I was so nervous. I thought, Hmm, that sucks!” The way he says that, though, makes it hard to believe that he really was nervous, or maybe what Nolan Myers calls nervous the rest of us call a tiny flutter in the stomach. Myers doesn’t seem like the sort to get flustered. He’s the kind of person you would call the night before the big test in seventh grade when nothing made sense and you had begun to panic.

  I like Nolan Myers. He will, I am convinced, be very good at whatever career he chooses. I say those two things even though I have spent no more than ninety minutes in his presence. We met only once, on a sunny afternoon just before his graduation at the Au Bon Pain in Harvard Square. He was wearing sneakers and khakis and a polo shirt in a dark-green pattern. He
had a big backpack, which he plopped on the floor beneath the table. I bought him an orange juice. He fished around in his wallet and came up with a dollar to try to repay me, which I refused. We sat by the window. Previously, we had talked for perhaps three minutes on the phone, setting up the interview. Then I e-mailed him, asking him how I would recognize him at Au Bon Pain. He sent me the following message, with what I’m convinced — again, on the basis of almost no evidence — to be typical Myers panache: “22ish, five foot seven, straight brown hair, very good-looking.:).” I have never talked to his father, his mother, or his little brother, or any of his professors. I have never seen him ecstatic or angry or depressed. I know nothing of his personal habits, his tastes, or his quirks. I cannot even tell you why I feel the way I do about him. He’s good-looking and smart and articulate and funny, but not so good-looking and smart and articulate and funny that there is some obvious explanation for the conclusions I’ve drawn about him. I just like him, and I’m impressed by him, and if I were an employer looking for bright young college graduates, I’d hire him in a heartbeat.