What Everyone Knows is Frequently Wrong

Contributor: William Cohen, Ph.D.
Posted:  06/15/2009  12:00:00 AM EDT
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Tags: Drucker | management | William Cohen | Business Strategies

Drucker is rarely quoted on this, but it was one of his most common cautions to us in his classroom: “What everybody knows is frequently wrong.”

I began to think more deeply about what the words really meant. This seemingly simple and self-contradicting statement is amazingly true and immensely valuable, and not only in business. What Drucker wanted to emphasize was that management professionals must always question their assumptions no matter where they originate. This is especially true regarding anything that a majority of people “know” or assume without questioning. This “knowledge” should always be suspect and needs to be examined much closer, because in a surprisingly high percentage of cases, the information “known to be true” will turn out to be false or inaccurate, if not generally, than in a specific instance. This can lead to extremely poor, or even disastrous, management decisions.

Things Once Known to be True are Now Known to be False

Of course there are many old “truisms” that we laugh at today. “The world is flat,” “the Earth is the center of the universe,” etc. The ancient Greeks knew that everything was made up of only four elements: earth, air, fire and water. Of course, in modern times we learned that they were mistaken. When I took chemistry in high school, I learned that a Periodic Table of Elements had been formulated by a fellow named Mendeleev and that it had been established that there were exactly 93 elements, no more, no less. We got an “A” if we could name them all. I’m sure we would have been given an “F” if we intimated that there were more than 93 elements. Today, there are 102 elements—or so everybody "knows.”

Many Things “Known” Today are Wrong

Just about everyone, both Christian and non-Christian, knows that the Immaculate Conception refers to the birth of Jesus, right? Maybe so, but what everybody knows is once again wrong. According to the Catholic Encyclopedia, the Immaculate Conception refers to the fact that “Mary was preserved exempt from all stain of original sin at the first moment of her animation, and sanctifying grace was given to her before sin could have taken effect in her soul.”

Or consider the most famous sentence uttered by Sir Arthur Conan Doyle’s detective, Sherlock Holmes. Out of Doyle’s four published novels and 56 short stories about the adventures of Sherlock Holmes and his sidekick and physician friend, Dr. John H. Watson, everyone knows that this famous sentence consisted of only the four words: “Elementary, my dear Watson.”

According to what everyone knows, Holmes would respond with these words on Dr. Watson’s surprise at a particularly shrewd deduction made by the sleuth. Sorry. What everyone knows is wrong again. Holmes never said these immortal words in a single instance in anything ever written by Doyle. If not Doyle’s literary character, where did these words come from? They came out of the mouth of the English actor, Basil Rathbone. He played the part of Sherlock Holmes in Hollywood movies and uttered the famous sentence. However, these words never appeared from Doyle’s famous character in anything he ever wrote about him.

That 100 Percent Agreement is Frequently Wrong is not a New Concept

Interestingly, Drucker’s lesson goes back over the millennia. In ancient Israel, the highest court was called the Sanhedrin. It corresponded roughly to the United States Supreme Court, although it had a lot more power. The Sanhedrin tried the most important cases, and it had the power to exact capital punishment. In this high court, there were no prosecuting or defense attorneys and no appeals. The Sanhedrin court consisted only of top judges. Some historians say 71 judges, others 23. The actual number is unimportant to some factual points.

The judges could examine the defendant, the accusers and any witnesses either side brought before it. To exonerate a defendant required a majority of one, while to find him guilty required a majority of two. But perhaps the most interesting aspect of this ancient Jewish legal body was that if all judges found the accused guilty of a capital crime, he or she was allowed to go free! This was because the ancient Hebrews were convinced that there is a defense to be argued for every individual accused, regardless of the gravity of the crime and the persuasiveness of the evidence. If not a single learned judge considered that the defendant’s case had at least enough merit to raise doubt, then it was clear evidence to them, that no matter how definite the circumstances, something was wrong in the situation and it was likely that the accused was innocent. Another words, when every judge knew something to be true, it probably wasn’t.

In modern times the impact of mass agreement on an issue has been addressed and confirmed in psychological research. In one experiment, subjects are to rate the attractiveness of individuals depicted in selections of photographs. However, there is only one real subject and the results are rigged. Unknown to this one subject, the other participants are part of the scientist’s team of experimenters. These participants always agree about the most attractive individual depicted in any particular set of photographs, even if their choice is definitely not the most attractive. It was found that the subject could usually be influenced to agree with any photograph that the group selected, regardless of merit. This experiment demonstrates the influence of social proof, and it confirms one reason why Drucker’s assertion that what everyone knows is frequently wrong is correct.

Drucker’s Wisdom Critical in Business

Is Drucker’s oral wisdom valid or important in business? A few years ago, someone laced a popular over-the-counter drug with cyanide. Several who bought the poisoned product died. This led to an almost instantaneous nation-wide panic. One hospital received 700 queries from people suspecting they had been poisoned with the tainted product. People in cities across the country were admitted to hospitals on suspicion of cyanide poisoning. The Food and Drug Administration (FDA) investigated 270 incidents of suspected product tampering. While some of the product had been tampered with as some sort of a sick joke, in most cases this was pure hysteria with no basis at all in fact. This panic in itself demonstrates part of Drucker’s thesis, but there is more that is of some importance to business decision-makers.

At that time, the product was almost 30 years old. Over the years, it had built up a well-deserved trust with consumers. Nevertheless, sales of the product plummeted overnight and Johnson & Johnson, the product’s owner, launched a recall and stopped all sales. The company advised its own customers not to buy or use the product until further notice.

Virtually everyone predicted the demise of the product. One well-known advertising guru was quoted in the New York Times: "I don't think they can ever sell another product under that name . . . There may be an advertising person who thinks he can solve this and if they find him, I want to hire him, because then I want him to turn our water cooler into a wine cooler."

The product once dominated the market. Everyone "knew” that those days were gone for good. An article in the Wall Street Journal commented, that the product was dead and could not be resurrected; any other notion was an executive’s pipedream. A survey of “the man in the street” found almost no one that would buy the product regardless of what the company did to guarantee its safety or promote its sale.

Despite “what everyone knew,” Johnson & Johnson retained the product Tylenol and its now famous brand name, which had become infamous through no fault of the product or its maker. Johnson & Johnson launched one of the most effective public relations campaigns for a product in commercial history. As a result, sales began a steady climb only a few months after the poisonings. Tylenol rose to once again become the number one analgesic and controls about 35 percent of a $2 billion market.

Where would Johnson & Johnson have been today had this established brand, built through 30 years of advertising, performance and reliability, been allowed to disappear? How much would it have cost Johnson & Johnson to attempt to introduce and build an entirely new brand to replace Tylenol? Could this have even been accomplished? We’ll never know. Nor do we know whether Peter Drucker was called in to consult with Johnson & Johnson. What we do know is that Johnson & Johnson did the right thing when this tragedy struck and then took the right actions to reintroduce the Tylenol product successfully. These actions today are studied in the business schools as an almost perfect example of a successful public relations strategy and execution. However the basis of this was that Johnson & Johnson executives, knowingly or not, decided, “what everyone knows is frequently wrong.” They went against what all the experts and even what the consumer “knew” and went on to resurrect Tylenol to be even more successful than it was previously.

Drucker’s lesson? Before you take advice or recommendations, even from a group of experts, don’t forget that what everybody knows is frequently wrong. Don’t accept “common knowledge” without careful examination.

Contributor:   William Cohen, Ph.D.

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