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Here’s a class every business school needs . . .

Richard Fuld, former CEO of Lehmann Brothers
Cheer up, Mr. Fuld! Stupidity is “a corollary of knowing and an element of normalcy” as well as a great way to lose $70 billion dollars!

Occidental College now offers a class on stupidity.

In the wake of the greatest financial meltdown in history wrought by the best and the brightest minds of business, finance, and economics, the Dean of the Harvard Business School has called for rigorous courses in critical thinking (see my post on “pessioptimism” for a take on critical thinking in business). However, when I studied CDO’s way back in 2006, I knew instantly that they were as stupid as stupid does. Do you think a couple classes in critical thinking would have helped all the folks with PhDs in finance and economics from top-of-the-line schools like Stanford and Harvard to realize that they were piling money on a ship heading for an iceberg?

Critical thinking is fine, but maybe business schools should start teaching stupidity.

In case you think Occidental College might have the STUPIDITY class tailor-made for business schools, think again:

180. STUPIDITY.

Stupidity is neither ignorance nor organicity, but rather, a corollary of knowing and an element of normalcy, the double of intelligence rather than its opposite. It is an artifact of our nature as finite beings and one of the most powerful determinants of human destiny. Stupidity is always the name of the Other, and it is the sign of the feminine. This course in Critical Psychology follows the work of Friedrich Nietzsche, Gilles Deleuze, and most recently, Avital Ronell, in a philosophical examination of those operations and technologies that we conduct in order to render ourselves uncomprehending. Stupidity, which has been evicted from the philosophical premises and dumbed down by psychometric psychology, has returned in the postmodern discourse against Nation, Self, and Truth and makes itself felt in political life ranging from the presidency to Beavis and Butthead. This course examines stupidity.

CORE REQUIREMENT MET: UNITED STATES

I love the fact that this course meets the core requirement for “United States.” One more free ad for David Horowitz there.

In case you suspect that this course description makes sense (academic jargon, in case you haven’t already found this out, is one of the premier “operations and technologies we use to render ourselves uncomprehending” and, as a bonus, uncomprehended), I’ll put it into English:

180. STUPIDITY.

People are stupid on purpose. This course is about all the ways people try really, really, really hard to be really, really, really stupid.

CORE REQUIREMENT MET: UNITED STATES

Because this is a serious blog dealing with serious subjects (really), I won’t hesitate to add that stupidity is your number one enemy in business. If there is such a thing as a science or art of business, it is the science or art of making decisions. When people ask me (and I’m always asked this in radio interviews) what the secret of business success is, I simply answer, “People who succeed in business make the right decisions. People who fail make the wrong decisions. If you make all the right decisions in business, you’ll succeed. It’s that simple.”

And that difficult.

Many years ago, I was the producer and lead creative director producing a series of children’s workbooks called Summer Vacation. I had a staff of several writers, artists, typesetters, and proofreaders; I assigned each book (there were six — one for each grade 1-6) to one writer. I assembled a staff of teachers to “evaluate” and correct all the work that we did. I stood as the final arbiter of everything. All copy, all design, all typesetting — I was the final approval.

The writer doing the assignments for the third grade book focused the science sections on geology. As I sat down with all the science assignments he had written, I came to one explaining the difference between sedimentary, igneous, and metaphmorphic rocks. And I came across this jewel of a sentence:

Diamonds and rubies are also metamorphic rocks.

My jaw dropped. This was the kind of stupid mistake that could put our agency on the line for a hundred thousand dollars or more if it made it all the way to printing. Diamonds and rubies are not rocks, they’re minerals. And if there’s any one basic fact about geology, the atomic fact of geology, it’s the difference between a rock and a mineral. This is like the difference between atoms and molecules being the foundation of chemistry. It’s more fundamental and more important than the difference between sedimentary, igneous, and metamorphic rocks.

Put in the simplest possible terms, “diamonds and rubies are metamorphic rocks” is about as dumb a statement as you can make in geology. (And rubies aren’t even metamorphic, they’re igneous.)

The difference between rocks and minerals isn’t rocket science. It’s third-grade science.

And this writer had a PhD from USC.

So when I went over the copy with the writer, I asked him to change this mistake and explained the difference between rocks and minerals.

And then . . . get this . . . he argued with me. Dripping with disgust and anger — I break things very nicely to people, so that couldn’t have been the problem — he stated firmly that there was no difference between rocks and minerals and that “diamonds and rubies are rocks” is perfectly correct. So I suggested he simply look it up and verify this (why argue with stupidity? you’ll never win). He raised his voice and dug in his heels. Diamonds and rubies were rocks and that was the end of it.

This from a guy with a PhD from USC.

Finally, he spat out, “You’re just being petty.” Of course, I had visions of a print run of 200,000 hitting the streets and some third-grader spotting the mistake. And our client making us pay for the entire print run. And then asking us for a few hundred thousand dollars more to compensate for the marketing disaster. And hiring a new firm to correct all our work.

When I received the rewrite a day later, the sentence in question read:

Diamonds and rubies are also metamorphic rocks.

He hadn’t even made an effort to look up the difference between rocks and minerals. So I changed it.

This from a guy with a PhD from USC.

Now, I know that there are idiot PhD’s like Stephen Greenblatt who don’t like looking things up even if it’s one Google search term away (he has, for instance, porcupines running all over the English countryside in his abominably stupid Shakespeare biography), but he’s a famous professor and they’re allowed to be stupid. But aren’t recent PhD grads just a little more rigorous than academic royalty at looking up what they don’t know?

While it seems trivial, this one mistake could have sunk the entire business.

And, as a consultant, I can tell stories like this until the end of time. Not just bad or stupid decisions, but bad or stupid decisions that are passionately, angrily, determinedly held on to even when their stupidity has come home, eaten everything everything out of the fridge, watched a few DVDs, and crapped on the floor.

There’s the accountant and controller (MBA UCLA) who insisted that prospective financials were not important to a grant application. And threw a major hissy fit in front of all the executives and consultants hired to bring this start-up up and running.

The president of Kerr Glass (MBA Harvard) who I and others watched flush a perfectly great company in the toilet with one superhumanly stupid decision after another — and the gall to fire anyone who disagreed with him.

The filmmaker (MFA) who refused to recut his movie even though everyone told him it needed better pacing (it was an incredible bore, but didn’t need to be); and he rewarded all those helpful suggestions with beat-the-walls temper tantrums. Of course, his movie went on to earn a staggering couple thousand bucks at the box office.

The owner of toothpaste company (doctoral degree) who insisted on using a close-up picture of a camel’s face with straw in its mouth in his ads “because it got people’s attention.” Never mind that it didn’t make sense or meet anyone’s needs or desires as far as toothpaste is concerned. It got attention. A picture of a blowjob would get attention, too, my friend. Doesn’t mean it’s a good way to sell toothpaste.

The marketing EVP (MBA USC) for a food service equipment company who wanted “rivets” on the company’s Web site because, well, she liked rivets. And fought tooth and nail with any and all contenders who thought that rivets were not such a hot idea. Rivets? This is what you care about? The company was gone before the furniture got warm.

The Hollywood producer and scion of a famous acting family who took all his startup money and invested it in fancy furniture and high-priced executives rather than on things that actually created revenues. They hired Patrick Stewart to do the voice-over on his Flash presentation (and I got to voice-direct Mr. Stewart — that was pretty cool, even though we never used it). Gone within a year.

The database engineering company that offered one and only one product . . . which the president (PhD) of the company had stolen from his previous job. When I gingerly confronted him on the long-term viability of this, he replied that they would never find out. They did. Gone. Gone. Gone.

The print company marketing executive that went through the roof insisting that “you never put a comma before the “and” in a series.” And spent half an hour of meeting time fulminating over the incorrectness of the final serial comma. (Not only was he being trivial, he was wrong — don’t these people have Internet connections?) Not gone, but helpless in the face of declining business.

There’s the English department Chair’s Advisory committee (all PhDs, all from the best schools in the solar system) that insisted to a person that budget figures didn’t have to add up to the stated total when I pointed out that the budget numbers above the summation line did not even come close to the sum below the summation line. Turns out — mirabile dictu — that it did matter.

This is all stupidity on the order of “diamonds and rubies are rocks.”

And, as someone who’s worked with businesses from Fortune 500 companies to startups for the last 10 years, I’ve encountered these kind of stupid-beyond-stupid-does stories in far greater numbers than the “smart” stories.

Is it any wonder that the financial system went kaphooie when the best and the brightest threw (other people’s) money at collateralized debt obligations? When mortgage companies approved any person who breathed for exotic mortgages that practically guaranteed defaults?

Who, who, I ask, could have thought CDO’s and unpayable mortgages to bad borrowers were good ideas?

The same type of incredibly smart people who think that diamonds and rubies are rocks, or that the numbers in a budget don’t have to add up to the stated sum, or that a close-up picture of an ugly camel’s face chewing on straw is a great way to sell toothpaste.

Who?

You, me, and everyone else we know.

Stupid people, in other words.

How many times in your career or business life have you confronted a decision-maker who not only insists on what is factually incorrect, but mounts a blitzkrieg to motor down any and all disagreement? When looking it up would be ten times easier?

How many times have you done it?

The problem with business decision-making (well, the problem with most decisions we make in life) is that we almost never have the luxury of making a certain decision. Each and every time we’re called on to make or contribute to a decision, from financing to advertising, we do so in the face of nagging and sometimes enormous uncertainty.

That’s why it’s so hard to make the right decisions in business. There’s too much you don’t know.

MBA programs and folks with finance PhDs like to pretend they’ve removed much of that uncertainty. That’s why we had a financial meltdown — the economists and finance whizzes at the heart of it believed they had taken all the uncertainty out of financial speculation. I’m not joking. They believed that they had pretty much eliminated substantial risk with their econometrics and algorithms.

It’s not the uncertainty that’s stupid. It’s the certainty.

Or, to be completely correct, the certitude. Certainty, if we’re going to split hairs, is knowing the truth. It is a quality of the knowledge you have, not you. Real certainty has nothing to do with you — it’s all about the knowledge itself. If the knowledge is certain, then it’s certain period. Certitude, on the other hand, is believing you know the truth. It’s all about you and nothing about the knowledge you claim to have. It is a claim to certainty, not certainty itself.

You can have certitude about anything. People are certain that the world is flat and was created in seven days. The knowledge is wrong, but their belief in its certainty is not. There is, in fact, nothing whatsoever that you can’t believe to be certain (like diamonds are rocks). You can believe anything and everything counter-factual, fantastic, and nonsensical. As long as your mind can’t be budged with any argument or fact, you can claim to be “certain.” But it doesn’t make your non-facts, fantasies, or nonsense certain.

Do you see? Certainty is a property of knowledge and facts. Certitude is a property of you. And it’s a fault, not a virtue.

When you hear, for instance, a religious type or a conservative talk about their “moral certainty,” they’re really talking about “certitude.” They don’t know moral truth (that would be “certainty”), they believe they know the truth (that’s “certitude”).

And in all the years and depth and breadth of my business experience, certitude is the ground zero, the alpha and the omega, of stupidity. It is almost always the enemy of good business decision-making rather than its friend.

Certitude is why my writer with the USC PhD refused to spend two seconds looking up the difference between rocks and minerals. Why the filmmaker went ballistic when everyone and their cousin pointed out that his movie was putting audiences to sleep. Why people are shouting at health care town halls. They know a little (or nothing), don’t know a lot, but take the little or nothing they know for the whole.

If you’re walking around in a deep and dark fog and you believe that it’s a brilliant clear day (despite all the facts to the contrary), you’ll walk into obstacles just as stupidly as the blindest among us.

There’s only one cure for certitude: intelligence.

The first rule of intelligence is this: be humble in the face of what you don’t know.

That’s the only solution to certitude. Acknowledge what you don’t know (Confucian philosophy calls this hsin, or truthfulness), determine what you need to know and what you can know (given time and money constraints), but still remain humble in the face of what you don’t know.

Many years ago, we had friends over for dinner when we lived in Pullman, Washington. As the afternoon wore on, we were standing in our picture window and started talking about magpies (amazing animals, those magpies). I laughed and talked about how they’d chase our cats. They’d land on the ground and hop after them, pecking at their rear ends. And the cats would run away. Our friend looked at us and stated forcefully that “magpies don’t chase cats! They don’t land on the ground and chase cats on foot!” “Yes, they do. We’ve seen them.” And he revved himself up — “that’s impossible” — while his wife tried to calm him down. Just at that moment — there is a God — one of our cats came trotting down the road with . . . a magpie at her heels, pecking her butt, chasing her down the road. He suddenly went silent. “I’ll be damned,” he whispered while the magpie pursued our hapless gray Persian, struggling to pretend that it wasn’t actually running away, “I was wrong.”

How many times have you heard either conservative or liberal gas-bags on TV or radio say those words? “I’ll be damned. I was wrong.” Ann Coulter would melt into a big green puddle with a black hat on top if those words ever passed her lips.

How many people in your business career would have the intelligence to admit that they’re wrong when all the facts on the ground shout that they’re wrong?

Nevertheless, those words — “I’ll be damned. I was wrong.” — is the only way out of stupidity. There is no other path to intelligence or good decisions.

That’s why rule two of intelligence is that the right decisions come from a good decision-making process, not from being right. The process is right, not you, me, or anyone else in the room.

Why? Because our response to other people’s certitude is to bash it with our own certitude (witness all the nonsense on both sides of the health care reform debate — no-one really knows or understands what they’re saying but they’re sure mean it when they say it). Things like “truth” and “the right decision” don’t come from one stupid person loudly asserting their certainty against other stupid people equally loudly asserting their counter-certainties. It comes from a lengthy and collaborative process of turning what you collectively don’t know into what you collectively do know.

And that’s what I’d teach in my Stupidity 180 class.

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