A new logo that costs millions of euros – only to be shelved when it is shouted down by the public. A corporate seminar on leadership that participants regard as a joke, but sit through in silence. And a catchy-sounding reorganization sparked by the latest managerial fad. The private and public sectors are littered with examples of organizational stupidity. According to Mats Alvesson and Andrew Spicer, however, organizations might actually have a vested interest in cultivating this phenomenon, within certain limits. Why? Because organizational stupidity is a double-edged sword: it can be genuinely useful in the short-term, but can also cause serious damage over the long run. In the world of banking, for instance, stupidity had a hand in the 2008 financial crisis.
The roots of stupidity: the knowledge economy
As far back as 1962, the management theorist Peter Drucker highlighted a major shift in the labor market: the emergence of a new breed of employee — “knowledge workers”, highly-trained employees whose capital is intellectual, as opposed to the physical capital of manual workers. But, contrary to received wisdom, the increase in skilled labor was not matched by a comparable rise in the supply of high-level jobs. In reality, even today very few occupations require more qualifications than was the case fifty years ago. The myth of the “smart” company was largely devised to mask a less glossy reality: the need to keep the growing number of (over) qualified graduates busy in unrewarding posts, giving them the impression they have been up-skilled by inventing an array of fancy titles. Many of the so-called “new” posts are «bullshit jobs» that are idiotic and meaningless, as heavily criticized by the American anthropologist David Graeber. All this leads to the paradox of organizational stupidity: giving masses of highly-educated individuals useless or even damaging tasks with which they then go along.
No one is immune from organizational stupidity
Experts and top talent are often more vulnerable to organizational stupidity. Bright individuals are not spared illogical tasks (incessant reporting, unwanted management responsibilities, unproductive meetings, etc.). In addition, just like everyone else, they get caught up in widespread cognitive biases (even if they might think that they are more resistant).
Based on The Stupidity Paradox: The Power and Pitfalls of Functional Stupidity at Work by Mats Alvesson and André Spicer (Profile Books, June 2016) and an interview with Pontus Bodelsson, CEO of HD-Sydsvenskan and director of several Swedish companies.
