Skip to Content

Jeffrey Pfeffer

 

H560: Knowing versus Doing Course Outline

Stanford University
GRADUATE SCHOOL OF BUSINESS
Professor Jeffrey Pfeffer

H560: KNOWING VERSUS DOING: ISSUES IN IMPLEMENTATION

Each year, some 1,600 business books are published, and between $40 and $50 billion is spent on training. Although the content of much of this business book wisdom and the training programs is undoubtedly sound and even wise, a surprisingly small amount of what organizations and their leaders know they should do actually gets implemented. For instance, in the automobile industry, virtually all executives understand the benefits of "lean" or "flexible" manufacturing practices, but implementation has been slow and backsliding frequent. Similar problems in implementing performance knowledge are visible in many industries and companies. In fact, it is not uncommon to see tremendous differences in performance across similar units in the same organization and evidence shows that there is limited learning and transfer of knowledge even within organizations. This course, taught for the first time this year, is focused on understanding the causes of the "knowing-doing" problem and what to do about it.

The course is divided into three sections. The first section provides evidence for the existence of the problem of implementing knowledge of how to enhance organizational performance and how to learn from others. The cases and material in this first part of the course will help us explore some reasons why the knowing-doing gap may exist. The second section of the course focuses on a set of organizations that have largely overcome the knowing-doing gap. This material permits us to explore how and why these organizations have been able to defy conventional wisdom and implement their insights. The final section of the course concerns how to change organizations to actually implement more effective management approaches and practices, and some of the problems encountered in implementing these changes.

This course deals with an important but at present not fully answered or understood issue. As such, we will approach the class as learning partners—trying to jointly figure out why organizations don’t invariably implement performance knowledge and what to do about it. It is a course that will be fun for those who like to solve puzzles, but frustrating for those who want pat, easy, or formulaic answers.

GRADING

One-third of your grade will be based upon participation in class discussions. I am particularly interested in your helping both me and your classmates learn by sharing experiences, asking questions, and offering insights and observations. Preparation for class, including doing both the required reading and the cases, is very important.

Two-thirds of your grade will be based upon an individual project that asks you to write a paper on some knowing-doing issue. The specific assignment is provided in a separate note at the end of this course outline.

REQUIRED READING

The reading assignments are not particularly onerous and it is very important that you do all of the assigned readings and cases. This will form the conceptual and empirical foundation for the discussions in class.

Jeffrey Pfeffer, The Human Equation: Building Profits by Putting People First, Boston, MA: Harvard Business School Press, 1998.

Case Material and Additional Readings in Syllabus.

LOGISTICS

Assistant: Becky Conti, Room L-320. Telephone: 725-6742.

Office: Littlefield Management Center, Room 351.

Telephone: 723-2915.

E-Mail: Pfeffer_Jeffrey@gsb.stanford.edu

Office Hours: By appointment.

OUTLINE AND SCHEDULE OF SESSIONS

PART I. THE KNOWING/DOING PROBLEM

The first section of the course introduces the puzzle—even when people have incentives to learn and ample opportunity to do so, often knowledge transfer is difficult. The question is: why? What we want to do, both in this first section and throughout the course, is really try to get to the root causes of this phenomenon. That requires us to repeatedly ask, "why." For instance, in the first session we will see that GM did some things in its Van Nuys , California, plant that made transferring learning from NUMMI difficult and the plant less successful than it might otherwise have been. It is fine to identify what GM did wrong. But that is not enough. We want to explore why. Why did the company do things that failed to build trust with the unionized work force? Why did it fail to offer the same level of employment security that was so important at NUMMI? In the second session, why, more than 15 years after an article appeared in the Wall Street Journal documenting problems with incentive plans in schools, was so little learned? In the third session, we will explore why it is so hard to realize the benefits of knowledge acquired in a merger, even when the acquiring firm has made prodigious efforts to integrate the acquisition and to learn from the acquired company. This first part of the course will make us humble in the face of the pervasiveness and persistence of knowing-doing problems, but will also begin the process of learning what the causes are, as we seek some implementable solutions.

SESSION 1. THE PROBLEM: KNOWING WHAT TO DO ISN’T ENOUGH

Reading: Pfeffer, The Human Equation, Ch. 2, "The Business Case for Managing People Right, and Ch. 5, "Ten Reasons Why Smart Organizations Sometimes Do Dumb Things."

Case: Readings on Toyota and Its Production System

Alex Taylor III, "How Toyota Defies Gravity," Fortune, December 8, 1997, pp. 100-108.

Clair Brown and Michael Reich, "When Does Union-Management Cooperation Work? A Look at NUMMI and GM-Van Nuys," California Management Review, 31 (Summer 1989), pp. 26-44.

General Motors went into a joint venture with Toyota in California to learn how to implement elements of the Toyota management approach. Other companies now also regularly visit Toyota to learn how the company operates. But, somehow the learning is not readily achieved. Based on your reading of these two articles, be prepared to discuss the following issues in class:

  1. Why did General Motors have so much trouble implementing the learning from NUMMI in the plant in Van Nuys (by the way, that plant is now closed)?
  2. What about the Toyota management approach seems to make it so difficult to copy?
  3. What about the NUMMI and Toyota approaches to managing people have made them so successful and productive?
  4. What lessons would you draw from these two articles and the other reading about a) the problems in learning better ways of managing, and b) some ways of overcoming these problems?

SESSION 2. ARE WE TRAPPED BY OUR IMPLICIT THEORIES AND ASSUMPTIONS?

Reading: Jeffrey Pfeffer, Competitive Advantage Through People, Boston, MA: Harvard Business School Press, 1994, Ch. 4, "Wrong Heroes, Wrong Theories, Wrong Language."

Jeffrey Pfeffer, Robert B. Cialdini, Benjamin Hanna, and Kathleen Knopoff, "Faith in Supervision and the Self-Enhancement Bias: Two Psychological Reasons Why Managers Don’t Empower Workers," Research Paper, #1432, April, 1997 (to be published in Basic and Applied Social Psychology)..

Case: Incentive or Merit Pay in Schools

Burt Schorr, "School’s Merit-Pay Program Draws Gripes from Losers—And Winners," Wall Street Journal,

Steve Stecklow, "Apple Polishing: Kentucky’s Teachers Get Bonuses, But Some Are Caught Cheating," Wall Street Journal, September 2, 1997, pp. A1, A5.

Randy Kennedy, "Private Group Offers Educator Bonus Plan," New York Times, January 27, 1998, p. A20.

  1. What is the implicit (or explicit) theory of organizational performance that underlies these interventions, all of which involve an attempt to introduce merit pay to improve schools?
  2. What is the implicit (or explicit) theory of human motivation that underlies these merit pay plans?
  3. Why haven’t the incentive plans worked, for the most part? What have the problems been?
  4. Could these problems be avoided or solved? In other words, can you think of how to construct a merit pay plan for schools that might have more chance of success (achieving its intended objectives)?
  5. Why, after all the years (almost 20) between the first article and the most recent, has so little been learned?
  6. What lessons do you take from this about "learning" how to manage organizations more effectively?

SESSION 3. CHALLENGES IN LEARNING FROM OTHERS

Reading: John Paul MacDuffie, "Creating Lean Suppliers: Diffusing Lean Production throughout the Supply Chain," California Management Review, 39 (Summer, 1997), pp. 118-151.

Case: The Fresh Choice Company: Acquiring and Transferring Knowledge Stanford Case #HR-7, 1998.

  1. What learning had occurred between the two companies prior to the acquisition?
  2. Why did Fresh Choice want to acquire Zoopa?
  3. What were the problems encountered in the integration of Zoopa? Why did these problems occur?
  4. What might Fresh Choice have done differently—be realistic in your answer and don’t assume perfect foresight—to help the acquisition go more smoothly?
  5. In your opinion, how much value has Fresh Choice realized from the acquisition, as a proportion of what might have been realized?
  6. What learning should Fresh Choice take from this experience?
  7. Compare the Fresh Choice case with MacDuffie’s article on Honda. How has Honda transferred knowledge? When has it been successful? When less successful?
  8. Overall, what conclusions can you draw about learning across and within organizational boundaries?

During class, some executives from Fresh Choice will be in class to discuss their perspective on the events described in the case.

PART II. LESSONS FROM ORGANIZATIONS THAT IMPLEMENTED PERFORMANCE KNOWLEDGE AND COMMON SENSE

In this section of the course, we are going to examine three organizations that have a) been quite successful, and b) have done so by going their own way on a number of management issues—by that I mean they have defied conventional industry wisdom and practice. What I want us to accomplish in this section is not only to learn about successful organizational models, but also to really ask the hard questions about how and why these organizations have been able to implement knowledge and insight and to keep on an effective course. We will have visitors in all of the classes and I hope our discussion can focus not only on what the firms have done, but also on the barriers and problems overcome and how and why they have maintained their practices and values.

SESSION 4. DARING TO BE DIFFERENT

Case: The SAS Institute: A Different Approach to Incentives and People Management Practices in the Software Industry, Stanford Case #HR-6, 1998.

  1. What is the basic business model of the SAS Institute?
  2. What capabilities or competencies does SAS need to be able to execute its business model?
  3. How do its management practices promote, or fail to promote, the building of those capabilities and competencies?
  4. What about the SAS Institute approach makes it difficult to imitate or duplicate? Why do you think so few other software firms have tried to implement many of its management practices?
  5. To what extent is the SAS Institute approach to its business and management dependent on the continuation of James Goodnight in the CEO role?
  6. What theory of human motivation and behavior underlies the SAS Institute’s approach to managing its people?
  7. What barriers do you see to implementing the knowledge of how the SAS Institute manages its people?

During the class, a senior executive from the SAS Institute will participate to answer questions and provide his perspective on the organization, its approach to management, and why the company’s approach remains fairly unique.

SESSION 5. THE ROLE OF LEADERSHIP AND VALUES (May 19)

Case: The Men’s Wearhouse: Success in a Declining Industry, Stanford Case #HR-5.

  1. What is The Men’s Wearhouse’s basic competitive strategy or approach to its market?
  2. What does The Men’s Wearhouse do particularly well? What are its core competencies or capabilities?
  3. What management practices have built those competencies and capabilities?
  4. Why haven’t other retailers more readily or quickly copied the company’s recipe for success? What are the barriers to imitating what the company has done?
  5. Why haven’t companies in other, related industries copied elements of The Men’s Wearhouse system? Why hasn’t there been much learning?
  6. What are the challenges or problems that you see the company facing going forward? How would you suggest the firm prepare itself for those challenges or problems?

During class, some senior executives from the company will be in class to discuss the management practices, philosophy, and to explain how and why the firm has been able to implement its wisdom about how to be successful in the off-price, tailored men’s clothing market.

SESSION 6. CREATING A HIGH COMMITMENT SYSTEM AND CULTURE (May 22)

Case: Starbucks

Jennifer Reese, "Starbucks: Inside the Coffee Cult," Fortune, December 9, 1996.

Howard Schultz, "Starbucks: Making Values Pay," Fortune, September 29, 1997.

  1. What are the core values of the company? What is the view of people and human behavior implicit in its management approach?
  2. What specific management practices has Starbucks implemented to make its values real?
  3. What barriers or obstacles do you think the company encountered and, for that matter, continues to encounter in implementing is management approach?
  4. Why haven’t more competitors copied more elements of the Starbucks approach?
  5. What has made it possible for Starbucks to actually implement its insight about how to manage people in the retail industry?

During class, a senior executive from the company will be with us to share his insights on the building of the company and the pitfalls and obstacles that had to be overcome.

PART III. CHANGING MANAGEMENT PRACTICES

In this final section of the course, we will use the knowledge gained about the sources of the knowing-doing problem and the ways some organizations have been able to implement effective management practices to examine three cases of organizational attempts to change management approaches. Some of these have been successful, some less successful, and in some cases, the results have been mixed. In all three instances, there are important lessons to be learned about the important topic of actually implementing knowledge about how to enhance organizational performance.

SESSION 7. CHANGING THE PEOPLE MANAGEMENT CLIMATE (May 26)

Reading: The Human Equation, Ch. 8, "Can You Manage with Unions?"

Case: Selected readings on Magma Copper:

William H. Miller, "Metamorphosis in the Desert," Industry Week, March 16, 1992

Marsh H. Campbell, "Magma: A Cultural Revolution—A Short Course."

J. Burgess Winter, "Magma: A High Performance Company."

During class, a senior executive involved with the Magma transformation will be in class to add his insight and perspective to the discussion of how and why the company was able to change, and what happened after the purchase by BHP.

SESSION 8. PROBLEMS IN IMPLEMENTING CHANGE: A TOTAL QUALITY MANAGEMENT FOCUS (May 29)

Case: Xerox Corporation: Leadership through Quality (A), (B), and (C) (HBS #9-490-008; 9-492-045; 9-492-046)

  1. Why did Xerox undertake its total quality management program? What business issues was the change initiative intended to address?
  2. Why did Xerox focus on total quality management as its change focus? What do you think about this focus? What are its strengths? What are its weaknesses?
  3. What were the elements or levers of change?
  4. What do you like about Xerox’s approach? What don’t you like?
  5. How has the program fared? Compared to other change efforts?
  6. What should/could Xerox have done differently? Why do you think the firm took the approach that it did?
  7. What lessons on accomplishing organizational change and implementing performance knowledge do you draw from this case?

During class, we will see a video of David Kearns, CEO of Xerox at the time, discussing the quality program.

SESSION 9. CHANGING MANAGEMENT PRACTICES: SOME GENERAL PRINCIPLES (June 2)

Reading: Pfeffer, The Human Equation, Ch. 4, "Aligning Strategy and Management Practices."

Case: AT&T: The Dallas Works (A) and (B) (HBS#9-492-023 and 9-492-024).

  1. What challenges and problems confronted the Dallas AT&T facility?
  2. What were the elements of the change effort Ken Weatherford put in place?
  3. For each element of the change effort, what were some of the advantages, and what were the disadvantages?
  4. How has Weatherford instilled a sense of urgency in the facility? How has he signaled that change will actually happen?
  5. Consider the timing of Weatherford’s moves. What did he do first? Second? What aspects of the timing seem sensible to you? What do you think were out of sequence?
  6. What do you think about his decision to dismantle the Quick JIT team?
  7. What general lessons on change emerge from the case?

PROJECT ASSIGNMENT

The objectives of this assignment are to: 1) identify some management or organizational practice you learned about in, for instance, H280 (Human Resource Management) that an organization (or set of organizations) knows that it should use, but is not using ("knowing" means that most managers in the firm understand the practice and believe it positively affects organizational performance); 2) explain why the practice is not being used; and 3) develop a set of suggestions about how to overcome the barriers to implementation.

These insights will be developed from a case study you will conduct of an organization, a division of an organization, or a set of organizations. This is intended to be an individual assignment, but if you would prefer to work on it with a small number of other people from the class, you are welcome to do so. Just let me know in advance. The expectation is that you will use interviews, documentary materials (including materials in the media), and, perhaps, other methods to obtain information useful for understanding the gaps between "knowing" and "doing." (Hint: In approaching organizations to do the study, describe it as a study of implementing performance knowledge. Most firms are not too eager to admit to themselves, or to outsiders, that they aren’t doing what they know they should).

If you intend to do a survey of management practices, a colleague and I have developed one that we are more than welcome to make available to you. However, doing a survey is not necessary as part of the assignment.

It is important that you try to uncover the "root causes" of the knowing-doing problem. The deeper you can go, the better for your understanding. For instance, many organizations measure the wrong thing, and because actions follow measurements, do the wrong thing. That is an interesting insight. But, it begs the question—if firms know their measurement system is, at least in part, producing behaviors that are less than optimal, why don’t they change the measurements? That is what I mean by "going deeper."

Needless to say, I will be pleased to talk to you about the projects as they unfold, to the extent you find this helpful.