CHAPTER | NINE
What Everyone Knows Is Usually Wrong
He's rarely quoted on this, but it was one of Peter Drucker's most common cautions to us in his classroom and it was an expression he often used outside of class. “What everyone knows is usually wrong,” he claimed. This sounds so wrong in itself that I was certain when I first wrote about this Druckerism that he must have actually said frequently wrong, not usually wrong. However, recently some old classroom notes have come to light and there's no mistake. What Drucker said was, “What everyone knows is usually wrong.” Now, it is true that Drucker many times uttered statements to make a particular point. This made him, as one friend stated, “eminently quotable.” But could Drucker have absolutely meant what he said in this case? I eventually concluded that, crazy as it sounds, he did mean it, and moreover that he was right.
I need to explain. I'm not talking about scientific facts, like the law of gravity or E = mc2, and neither was Drucker. He was talking about opinion expressed as fact. After much thought, I concluded that this seemingly simple and self-contradicting statement is amazingly true; and not only that, once accepted and applied, it is immensely valuable—and not only in business.
What Drucker wanted to emphasize was that we must always question our assumptions, no matter from where they originate. This is especially so 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 inaccurate or completely false. This can lead to extremely poor, even disastrous management decisions. It also leads to an incredible number of stupid laws pandering to prejudices and propaganda that are repeated, through ignorance or malice, in direct contradiction to facts, which many times are readily available and easily uncovered.
Things Once “Known to Be True” Are Now Known to Be False
Of course, there are many old “truisms” once thought by everyone to be true that we laugh at today. “The world is flat” or “The earth is the center of the universe” is typical. The ancient Greeks “knew” that everything was made up of only four elements: earth, air, fire, and water. Of course, in modern times we have 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 ninety-three 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, though, there are 118 elements—or so “everybody knows.”
Many Things “Known” Today Are Just Plain Wrong
Just about everyone, both Christian and non-Christian alike, knows that the Immaculate Conception refers to the birth of Jesus, right? Maybe so, but what everybody knows is wrong again. 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.”1
Or consider the most famous sentence uttered by Sir Arthur Conan Doyle's famous detective, Sherlock Holmes. Out of Conan Doyle's four published novels and fifty-six 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 four novels and fifty-six short stories written by Conan Doyle. If not from Conan 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 a popular series of Hollywood movies in the 1930s and 1940s, which were based on Conan Doyle's famous detective. It was Rathbone who uttered the famous response that came to represent Holmes's character. I hasten to add that these words seemed to fit Conan Doyle's hero so well that maybe Holmes should have said them in print. But alas, he did not.
The Collective Wisdom of the Sanhedrin
Interestingly, Drucker's lesson goes beyond the millennia. In ancient Israel, the highest court was called the Sanhedrin. It corresponded roughly to the U.S. 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 there were seventy-one judges, others say twenty-three. 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 possible that the accused was innocent. In other 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 were to rate the attractiveness of individuals depicted in selections of photographs. However, there was only one real subject and the results were rigged. Unknown to this one subject, the other participants were part of the scientist's team of experimenters. These participants always agreed about the most attractive individual depicted in any particular set of photographs, even if their choice was 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 while it confirms one reason why Drucker's assertion that what everyone knows is usually wrong is correct.
Drucker's Wisdom Is Critical in Business
Is Drucker's wisdom on common “knowledge” valid or important in business? In 1982, someone laced a popular over-the-counter drug with cyanide. Several who bought the poisoned product died. This led to an almost instantaneous nationwide 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 Peter Drucker's thesis, but there is more that is of some importance to business decision makers.
At that time, the product had been established for almost thirty years. 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 maker, 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.”2
The product once dominated the market. “Everyone knew” that those days were gone for good. An article in the Wall Street Journal commented sadly, as if in an obituary, that the product was dead and could not be resurrected; any other notion was an executive's pipe dream. A survey of “the man in the street” found almost no one who 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 be today had this established brand, built through thirty 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 despite “what everybody knew.” These actions today are studied in the business schools as an almost perfect example of a successful public relations strategy and execution, as well as being the right thing to do ethically. However, the basis of this conclusion was that Johnson & Johnson executives, knowingly or not, decided, “What everyone knows is usually wrong.” They ignored what all the experts—and even the consumers—“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 those who should know, don't forget that what everybody knows is usually wrong. Refuse to accept “common knowledge” or “what everybody knows” without careful examination.