Take-Aways

 Many companies hire smart people who do dumb things. That phenomenon is
“the stupidity paradox.”
 Stupid actions might work out temporarily, but they cause big trouble in the
long run.
 Organizations often discourage clear, careful thinking by employees. They
regard it as subversive and believe that it leads to conflict and uncertainty.
 Many organizations encourage employee stupidity. They rely on “stupidity
management” to limit employee thinking.
 “Functional” or “selective” stupidity differs from plain old, garden-variety
stupidity.
 Functional stupidity actually offers numerous benefits, including elimination
of doubt, promotion of harmony, and reduction in internal tensions and friction.
 Functional stupidity manifests in five different forms.
 Look out for: “leadership-induced stupidity,” “structure-induced stupidity,”
“imitation-induced stupidity,” “branding-induced stupidity” and “culture-induced
stupidity.”
 You can “destupidify” your organization with acute observation, intelligent
interpretation and smart questioning.
 Use reflection and critical thinking to avoid doing dumb things in your
organization.

Summary
Ford Pintos

You might expect knowledge-intensive organizations and their workers to be smart

and to do smart things. However, most organizations and their employees more often
do stupid things. Many companies don’t support careful thinking or enlightened
actions.

These companies encourage stupidity and discourage reflection and analysis. They
consider such thinking subversive. “Stupidity managers” – the paladins of “stupidity
management” – purposely intervene to limit employees’ thinking. To illustrate how
“functional stupidity” works in corporate life, consider Dennis Gioia, who worked in
Ford Motor Company’s recall department in 1972. His job was to look for patterns
that revealed problems in Ford automobiles that might trigger manufacturer recalls.

“Far from being ‘knowledge-intensive,’ many of our most well-known…

organizations have become engines of stupidity.”
Gioia often visited what Ford employees referred to as “the chamber of horrors,” a
warehouse for “burned-out cars” that Ford retrieved from accident scenes. One
destroyed automobile – a Ford Pinto – made a horrific impression on the young
engineer.

Gioia had to determine if this Pinto represented a one-of-a-kind incident or a

potentially dangerous pattern. He told his colleagues about his concerns about the
Pinto, but they weren’t perturbed and told him not to worry. They dissuaded him
from taking his findings to Ford’s executive committee.

“We are supposed to learn from our failures, but we rarely do. One of the big
reasons…is that when things go wrong, we look for ways of hiding it.”
Gioia did not push his fears concerning the Pinto inside Ford. He didn’t recommend
that Ford recall it. This was in 1973. In 1978, after many more people died in
exploding Pintos, Ford finally recalled the Pinto.

Gioia accepted the social norm at Ford, which was, “Don’t raise problems and don’t
tell people bad news they do not want to hear.” Disturbingly, what Gioia did – or
didn’t do – is standard operating procedure at many firms today. Company cultures
tell people not to think too much.

Functional Stupidity

In this modern age of knowledge-intensive organizations and smart knowledge

workers, why is functional stupidity such a problem? Think of this negative dynamic
as “thinking within the box.” It results from employees becoming Fachidioten or
“professional idiots.” Being functionally stupid at work often turns out to be a good
career move. It protects employees from rocking the boat or from taking actions that
provoke others to see them as troublemakers.

“Post-industrial society is basically an information society. Exchange of

information in various kinds of data processing, record keeping and market
research is the foundation for most economic exchange.”
Functional stupidity – defined as the “inability and/or unwillingness to use cognitive
and reflective capacities in anything other than narrow and circumspect ways” –
means never calling attention to poor company policy. Because it proves so useful,
functional stupidity prevails at the top of many organizations and at all subsidiary
levels.

“The financial crisis that began in 2008 is a testament to the stupidity lurking at the
heart of knowledge-based societies.”
Functional stupidity differs from plain old, garden-variety stupidity, but even
regular, standard-issue corporate stupidity can lead to catastrophic consequences.

Functional stupidity – also known as “selective stupidity” – can have beneficial

results, at least in the short term. This is why many organizations become hotbeds of
functional stupidity. It promotes harmony and reduces frictions among workers.

Forms of Functional Stupidity

 Functional stupidity manifests in five different forms:

1. “Leadership-induced stupidity”– Leaders are supposed to be exemplary

standard-bearers whom their employees admire. Most are not. Many
employees wish their leaders, with all their lofty language, would get out of the
way and leave them alone to do their work. One example of functional
stupidity is the belief that all leaders have a significant influence on how
organizations operate.

2. “Structure-induced stupidity” – Companies require rules and

procedures, but many go overboard with regulations. As a result, workers end
up ticking boxes that have little to do with real productivity. Businesses make
following the rules more important than achieving results.

3. “Imitation-induced stupidity” – At many organizations, what the

company does matters less than how the company looks to outsiders.
Conforming to expectations becomes the essential consideration.

4. “Branding-induced stupidity” – Many people care more about what

brand a product bears than about its features. Branding can give meaning to
what many employees would otherwise consider meaningless chores.
However, the vapidity of branding also can breed cynicism.

5. “Culture-induced stupidity” – A common characteristic of functional

stupidity is that employees unquestioningly maintain mistaken beliefs, even if
evidence points to the contrary. Employees rely on these incorrect
assumptions and their “culture does the thinking for them.”

“Telltale Aspects”

Functional stupidity eliminates the doubts that intelligent investigation would

provoke and, instead, presents a clear path forward for those who are ready to
constrain their thinking. This can enable employees to achieve positive, short-term
outcomes, but you can detect the telltale traits of functional stupidity:

 “Absence of reflexivity” – Employees don’t question their basic

assumptions.
 “Not seeking cause or a good reason” – People don’t ask why. They just
follow the rules, whatever they may be.
 “Lack of substantive reasoning” – Workers don’t consider the
consequences of their actions. They focus on how to do something, not on whether
they should do it.
 No cognition – Employees don’t evaluate the organization’s business model
carefully. With a closed mind-set, they pursue the firm’s objectives as if they’re set in
stone.
 “Motivational defects” – People purposely limit their ambition. This is a
signal of a lack of curiosity.
 “Lack of emotional reasoning” – Employees fixate on one emotion. For
example, they become so excited about a new product that they don’t explore or even
consider its attendant defects.
 Attachment to a particular ethos – This severely restricts people’s
thinking. To illustrate, if a company places a high premium on loyalty, employees
might do everything possible – regardless of the long-term consequences – to be
staunch team players.

The Traits of Stupidity Management

Similar to the stupidity of unthinking followers, stupidity at the management level

has four innate characteristics:

1. “Authority” – The stupidity manager habitually uses “punishments and

rewards” to motivate employees.

2. “Seduction” – A lack of substance disappears behind snazzy PowerPoint

presentations, ostentatious buzzwords or the jargon of a high-priced
consultant.

3. “Naturalization” – Stupidity managers pass off everything they do as the

only way people could do it, as if no viable alternatives are possible.

4. “Opportunism” – The stupidity manager organizes incentives so that

employees won’t examine management’s actions or ask tough questions.

Curing Stupidity

Getting organizations to do smart things, and not to pursue stupidity, will always be
an uphill battle. “Culture, branding initiatives, referring to industry best practice,
organizational structures and systems and leadership” all conspire against operating
in a more intelligent way. Challenging these bolted-in-place verities is often a
tedious, unrewarding exercise. Many times, efforts to penetrate stupidity will result
in “conflict, confusion, endless debate and ultimately, indecision.”

“Smart people set about applying their impressive but narrowly focused skills. The
glamor of financial engineering created a sense of hope and excitement…investors
began to believe in the power of quants to work magic.”
Stupidity management keeps everything in happy balance, at least in the short term.
It results in “branding baloney, leadership nonsense…and fashionable pseudo-
solutions.”

“Destupidify” Your Organization

You can take the right steps to destupidify your company. Start by eschewing
“relentless positivity” – the mindless homage to eternal optimism that leads to
dangerous delusion. Instead, adopt an attitude of “negative capability.” To launch
this change, be open to experience. Become willing to “tolerate anxiety and fear, to
 stay in a place of uncertainty and to allow for the emergence of new thoughts or
perceptions.”

“They stopped asking tough questions and started to just believe. The upshot was a
financial system that no one fully understood and no one was willing to question.”
Negative capability means thinking carefully and critically. It has three main aspects:

1. “Observe” – To look beyond the obvious, smart observers ask, “What is

going on here?”

2. “Interpret” – Once you understand the issues, figure out how other people
relate to them. As anthropologists say, “What do the natives think is
happening here?”

3. “Question” – Pose further revealing queries, such as: “What are the
assumptions we are making here?” “What are the reasons…we are doing this?”
“What are the wider outcomes or broader meaning?” Search for “deep
meanings,” and do not accept what appears on the surface.

“Critical Insights”

Operating intelligently calls for developing critical insights about the primary issues
your organization confronts. You must exercise “critical thinking and serious
reflection” to build these insights. Use these triggers to provoke further thought:

 “Reflective routines” – Ask the following questions: “Why?” “Where is the

evidence?” “What does this mean?”
 “Devil’s advocates” – These staffers challenge others’ assumptions and
present counter-arguments.
 “Post-mortems” – Analyze why things turned out as they did. This is
particularly valuable when the outcome is not what you wanted.
 “Pre-mortems” – Don’t make a move until you consider each step carefully
in advance. Ask your colleagues to envision what they might do differently in the
future. If a project fails, ask the participants, “What do you think went wrong?”
Armed with new insights, you may be able to act in advance to avoid problems on the
next project.
 “Newcomers” and “outsiders” – Heed new people who can offer fresh
perspectives.
 “Engage your critics” – Listen to what they have to tell you.
 “Competitions and games” – Work with your colleagues to detect and
avoid clichéd thinking.
 “Anti-slogans” – Organizations love empty-headed, feel-good language.
Create “anti-management-speak.”
 “Anti-stupidity task force” – Organizations love to focus on new “projects,
structures, systems, procedures and activities” by setting up special teams and task
forces. Many times, canceling such initiatives is better than investing in them. Put a
team together whose job is to look at new initiatives and decide which ones are
worthless. Then, abandon the ones that don’t make sense.

Transformation

Transforming your firm from stupid to smart won’t be easy. Organizations can be
complex and ambiguous. What may seem stupid could actually be smart and what
may seem smart can turn out to be stupid. Working against functional stupidity will
create a better, more productive, more efficient work environment. Your anti-
functional stupidity program should involve:

1. Doing your own personal critical thinking and “anti-stupidity management.”

2. Eliminating your stupidity issues. Focus on “cultural and collective norms.”

Make functional stupidity a public issue within your firm; discuss it with
colleagues to raise their awareness.

3. Making necessary structural changes.

InfoQ: What made you decide to write this book?

Andre Spicer: We had spent over a decade studying knowledge

workers in knowledge intensive firms. But when you asked them
what they seriously thought about their jobs, they would often admit
“it's actually pretty stupid”. For a while we thought they were just
trying to be humble. But eventually we started to take them
seriously. So instead of going looking for knowledge and smartness
in firms, we started looking for stupidity. This lead us to a goldmine.
Mats Alvesson: We have observed that it is common to emphasize
knowledge, rationality, talent, and learning. But in reality many
organizations cultivate compliance, obedience, naivety, conformism
and positivity. Low levels of critical thinking and reflection seemed
common in many workplaces. We realised this makes organizations
functioning smoothly and people avoid anxieties associated with
broader responsibility outside following the flow. Initially we
published these observations in a scientific paper.
We thought it would only be read by other specialists. But the
message seemed to have a much wider resonance. This lead us to
publish a book which described what we had found to a wider
audience.
InfoQ: For whom is this book intended?
Alvesson: Any person who is eager to be self-reflective about why
stupid things happen in their workplace. We think the book is
particular for people who want to have a framework for
understanding some of the perversions of contemporary
organizations and working life.
Spicer: We think jilted knowledge workers will find this book
interesting. These are people who spent years studying then more
decades honing their expertise only to find thinking and knowledge
are disregarded in most big organisations. These smart people are
then asked to do stupid things in these organisation. They are
frustrated. Our message is that they are not alone. Their experience
is widely shared, and there is something which you can do about it.
InfoQ: What do you mean by "functional stupidity"?
Spicer: Intelligent people with excellent qualification not thinking in
a broader way. As a result, things go well in the short term - they
often get promoted and the organisation as a whole functions well.
But in the long term it creates disaster.
You know if you have functional stupidity on your hands when:
1. People don't ask for or give justifications of a course of action.
They say things like “screw it, let's do it”.

2. People don't reflect on the assumptions they are making.

3. People don't think about the long term implications of their

actions.
Alvesson: Narrow, technical thinking within a given box or
framework (vision, job description, success recipe) without broader
reflection or questioning of purpose or context. You competently do
what you are told (or how others do things) without thinking if this
is meaningful or leads to good outcomes. For instance, in large
banks employees often focus on ticking the regulatory boxes and do
not think about the wider question of whether the financial products
they are creating are any good.
InfoQ: What are the main causes that lead to functional stupidity?
Spicer: In the book we identify five common drivers of functional
stupidity. The first is a misplaced obsession with leadership. Many
organisations encourage people to think of themselves as
inspirational leaders. But this often alienates their followers and
means they ignore the nuts and bolts of getting a task done. The
second is an attachment to branding. We witnessed military
organisations which were more keen on running rebranding
exercises than running military exercises. The third driver of
functional stupidity is mindless imitation. Often large organisations
copy others for no better reason than they want to up with the
latest fashion. This leads firms to implement new initiatives which
are inappropriate for them. The fourth is pointless policies and
procedures which are thoughtlessly followed. Many professionals
spend more time ticking off boxes than actually doing their job.
Finally, some organisations encourage a culture of up-beat positive
cultures which encourages employees only to look at the bright side
and overlook any problems.
InfoQ: What are the possible negative outcomes from stupidity at
work?
Alvesson: An enormous waste of time and energy in organizations
spent on window-dressing activities and meaningless meeting
rituals or tick-box activities. Many organizations make little or no
contribution to society. As a result employees feeling cynical and
disappointed.
For instance, teachers spend increasing proportions of their time
complying with various auditing exercises. As a result, they spend
more of their time doing administrative duties than actually
teaching their pupils. This has a knock on effect of making teachers
feel like they are not doing their job properly - they become
alienated and many are now leaving the profession. This also has a
wider social impact - leading to under educated kids.
Spicer: It is interesting to note that countries like Finland which
tend to give their teachers lots of professional autonomy and don’t
overburden them with administrative demands tend to have the best
educational outcomes for kids. 
InfoQ: What positive outcomes can it bring?
Alvesson: People are focused, they feel comfortable, they are not
overburdened with doubt and reflection. It can also create a
positive work cultures without critique or difficult questions being
asked. But it’s a double edged sword. Each of these short term
benefits can become long term problems.
Spicer: For instance, in one consultancy firm we studied, we
noticed that many of the young employees were unusually upbeat
about everything. These were smart people who had spent years
being trained how to think. But as soon as they entered the firm,
many stopped using these thinking skills. As a result, they could get
on with the task and do things which seemed irrational but made
the client happy in the short term. As a result, these people were
promoted and there was also less conflict in the organisation. But it
often gave rise to longer term problems.
InfoQ: You investigated leadership in your book. What have you
learned?
Alvesson: Much of the talk and many of the hopes we have about
leadership is just fantasy. Often, in knowledge intensive firms,
leaders just get in the way. If organisations actually wanted to be
successful, what is needed is less leadership. After-all, few
managers have much leadership. 95% of their time is spent doing
boring administration. When they try to do leadership, they are often
far from what management bestsellers preach and promise. For
instance, in one tech firm we studied, we saw managers who were
brought in to manage a group of engineers. The engineers were
pretty self directed. The manager had no idea about what they were
actually doing. So he had to resort to generic leadership tactics -
trying to inspire people, holding meetings, organising away days.
The engineers quickly got sick of all this because they saw it as
getting in the way of their work.
InfoQ: Sometimes companies do things not because they produce
the best results, but because everyone else is doing it. What's your
suggestion to avoid this trap or get out?
Alvesson: Point this out. Ask for a good reason for a project,
arrangement or structure. The fact that others are doing this is not
a good reason for us doing it. One could put up signs saying ‘Beware
of flock behaviour!’ or ‘Make sure there is a reason for doing
something!’
Spicer: If you look at the best organisations, they often avoid
copying what others in their industry are doing. Instead they slowly
invent their own processes through a gradual process of learning.
They borrow or take things off the shelf when it makes sense. Take
the example of Handelsbanken in Sweden - this was one of the few
european banks that continued to grow following the financial
crisis. The reason for this was it had developed its own unique
culture and model of localised banking which was quite counter
intuitive to what the rest of the industry was doing. Another
example is Spotify, which has developed its own model of software
development through a slow process of iteration and learning. There
is a big danger when companies just wholesale copy this model
without considering what makes it effective. This often involved
taking something out of context.
InfoQ: How does culture induce stupidity? What can be done to limit
the damage?
Alvesson: Cultures are important to create shared meanings so that
people understand each other and can cooperate. But often people
take a lot for granted and just think, talk and act like everybody
else, finding this self-evident and unproblematic. But “cultural
scrutiny” or appointment of Devil’s advocates (with a job role to not
agree, but argue from another stance than the conventional one)
can offer some antidotes.
Spicer: A great example of what can go wrong with culture can be
found in Nokia. When the IPhone launched in 2007, Nokia was the
dominant mobile phone maker. It had already developed a smart
phone, but they knew they faced a challenge. They were working on
their own mobile phone platform - Symbian - but all the developers
knew there were serious problems. But senior managers only
wanted to hear good news. So as a result, middle managers only
pushed positive news upwards. This meant Nokia kept developing
Symbian even when it wasn’t working. Apple and Samsung overtook
Nokia to claim the top spots in the industry. Nokia eventually sold
off its mobile division to Microsoft. If they had been better at
harnessing critique from lower down the organisation, they might
have been able to cut their losses short and develop a identify a
decent operating system which would have allowed them to
maintain their place in the market.
InfoQ: What can be done to counter stupidity management or dispel
stupidity?
Alvesson: Devil's advocates are helpful. You can create pre-
mortems - which encourage people to imagine everything that could
lead to a disaster in a project before you begin it. You can also play
bullshit bingo or have sessions where people are encouraged to
raise issues, possibly anonymously. One can also have people
interview newcomers about their experiences of
surprising/odd/problematic features. Or have task forces on anti-
stupidity management. The idea would be to identify collective
stupidities and root them out.
Actuaries are generally imagined to be clever, yet I doubt there are any amongst us who have
not done something stupid at work. Sending a confidential email to the wrong person; pouring
coffee over your keyboard; forgetting to drag your Excel formulae all the way to the bottom of the
table and so on. In their new book, however, Mats Alvesson and Andre Spicer suggest that
stupidity at work is more than just an occasional aberration.

The Stupidity Paradox describes how the most educated workers are often guilty of a kind of
“functional stupidity,” defined as “an inability or unwillingness to use reflective/cognitive
capacities in the workplace” or “thinking inside the box”. Alvesson and Spicer argue that the ways
in which businesses typically tackle this – leadership development programmes, cultural change
initiatives and the like – are in fact just new ways of encouraging people not to think. So
companies that pride themselves on intelligent management may be at the greatest risk of
behaving stupidly.
The authors are both professors at Cass Business School and specialists in organisational
behaviour. The genesis of this book was a conversation in which they compared instances of
stupidity they had seen in many supposedly “knowledge-intensive” organisations such as banks,
consultancies and universities. Much of the book is devoted to categorising and describing this
behaviour.
One potentially controversial example is what the authors call “leadership-induced stupidity.”
They say they have observed a “quasi-religious belief in leadership” in many organisations, with
bright employees avoiding independent thought in favour of blindly following authority. They are
suspicious of the leadership coaching industry, which they describe as a “crew of self-styled
experts [who] bombard confused, desperate and bored middle managers with… recipes for
success.” In support of this they quote a 2014 study by McKinsey that finds no correlation
between business success and money spent on leadership development training. 
The book continues to mix anecdote, opinion and research, exploring other types of unthinking
management behaviour applicable across industries. Examples include over-reliance on
processes and procedures – “structure-induced stupidity” – or an insistence on shared beliefs in
the face of evidence – “culture-induced stupidity”. Attempts to encourage new ways of thinking,
argue the authors, rarely lead to actual change: they just allow managers to feel as though they
are doing something by commissioning expensive consultancy reports. 
The main focus is on general management concerns, but the introduction considers functional
stupidity in analytical work. 
The writers describe how, in the years leading up to the 2008 market crash, banks hired
increasing numbers of brilliant maths and science graduates to develop models that could guide
trading and investment decisions. At first this strategy yielded exceptional returns. However, as
confidence in the models grew – catastrophe: “the connection between the quants’ clean abstract
models and the messy realities of markets began to fray.” The authors quote as an example of
the failure to allow for tranches of sub-prime debt when risk-assessing mortgage-backed
securities. 
Insufficient critical reflection meant that clever models built by clever people led to “stupid” and
dangerous decisions. The Stupidity Paradox is written for a general audience, so if your work
involves modelling you may find the treatment of financial engineering simplistic. Nonetheless, it
shines a light on the important question of how to use models intelligently, a problem that
actuaries have for some time been seeking to tackle.
In the final chapter of the book, Alvesson and Spicer offer some solutions to the problems they
have observed. Firstly, they sensibly acknowledge that there can be benefits to “functional
stupidity,” noting that when people choose group-think over individual reflection they feel a sense
of shared culture and direction which facilitates decision-making. In contrast, an environment with
unlimited open discussion, challenge and criticism runs the risk of creating “conflicts and
disorder”. The writers therefore suggest that companies introduce space for critical reflection and
challenge in a structured way. One proposal is the introduction of a “devil’s advocate” to
challenge and to question, a role which could be rotated amongst team members. Another
proposal is “pre-mortems”: dedicated sessions at the start of a project where the team identifies
likely opportunities for stupidity based on previous experience.
Overall, I enjoyed The Stupidity Paradox. An element of this was undoubtedly schadenfreude – a
certain guilty pleasure in reading about mistakes made by clever people. More importantly, the
book encouraged me to think about what it means to be intelligent at work.