7 Biggest Business Myths

Think that the customer is always right? Or that most people are influenced by facts? Think again. Here are some major fallacies that could be holding you back:



Because of our fondness for mental shortcuts and generalizations, many of us are susceptible to myths and misconceptions. What’s more, many inaccurate statements are easy to accept at face value or may even strike some as common sense. We go head to head with some widely held beliefs:

Myth #1: Facts can easily sway people.

Apparently, facts are not as influential as many of us think. According to a Fast Company feature entitled Five Myths About Changing Behavior, “our thinking is guided by narratives, not facts. When a fact doesn’t fit our conceptual ‘frames’–the metaphors we use to make sense of the world–we reject it.” Thus to convince people to change, you would be more effective using emotional appeals instead of factual statements.

Myth #2: Becoming a low-cost leader is just one of many ways to succeed in business.

Business school wisdom teaches us that you can take several paths to business success: low-cost leadership, developing sought-after product features, concentrating on a niche or excelling in customer service. But Keith McFarland (a two-time tech CEO) in this BusinessWeek feature argues that in the long run, it’s all about cost. “While these alternatives may provide some short-term success for a company, evidence suggests that we will all eventually play the cost game, an effort that will largely determine our survival,” he writes. “Today’s customers require us to have responsive customer service, unprecedented levels of customization for specific needs, reliable and easy-to-use products, and low costs.” In short, even if you’re Porsche, you still have to engage in the “long, hard battle to reduce costs.”

Myth #3: The customer is always right.

This bit of conventional wisdom is bandied about freely, but we must really qualify this statement, according to this blog. Some customers, for example, cost more to keep than you make from them. And even worse, some are really “‘not’ customers”–according to a book entitled Results-Based Leadership. “While ‘not’ customers may appear to be ready to buy products, they are ultimately not lifetime customers–which a company develops only by providing a clear, consistent (reliable) image year after year,” according to an excerpt from the book. “Leaders need to recognize that some customers are more right than others…” Take Harley-Davidson, for example, which abandoned its profitable dirt bike business because it was sending a mixed message to its “real” customers, those that embrace the Harley lifestyle.

Myth #4: By collecting customer data, you will be able to connect with your customers.

Gathering customer data is simply not sufficient, says the aforementioned book, since typical data-based market research “focuses on what has been and is, but not on what might be.” While this is good stuff to know, business leaders should try to work on “influencing how [customers] think about the firm and its products and services.” In particular, the book recommends such techniques as customer interaction, recruiting, reward systems, and development systems to involve them.

Myth #5: Profit is the end-all be-all in business.

The previously mentioned blog takes this one down as well, pointing out that cash flow is actually more important. According to the site, “profit can just be a trick of accounting whereas cash flow controls whether you can stay in business.” What’s more, “many companies go out of business due to cash flow challenges, even though they were profitable on paper.” And while we’re at it here’s a somewhat-related myth that needs debunking, too: “failure is bad.” The blog points out that it’s actually “an integral stepping stone toward success.” As long as you don’t let it be the end result, you’re just learning. This point is also emphasized in a Chinese metaphor that says that failure is the “mother of success.”

Myth #6 Involving more people in a project will expedite matters.

Only up to a point, clarifies our source blog. Adding more team members will make communication trickier and more time-consuming. Also, those who are currently on the team will have to devote time to getting new people up-to-date.

Myth #7: Without close supervision, most workers will “try to get away with whatever they can.”

Not so, says the recently released book, The Enthusiastic Employee, which analyzed data from surveys of millions of employees in hundreds of organizations. It found that the drive to excel applies to a whopping 95% of a typical workforce. According to this book excerpt, the vast majority of people want to do their job well and say that a major source of frustration is not being able to perform their duties to the best of their abilities due to obstacles such as malfunctioning equipment, bureaucracy and inadequate training. The book found that most workers seek three things: 1) accomplishment, 2) equity and 3) camaraderie. Doesn’t sound like a bunch of would-be slackers to me.

Check out IMT’s other myth-busting efforts…

6 Misconceptions about Creativity

12 Press Shop Myths Debunked

Dispelling the Myths about U.S. Factory Workers

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Comments:
  • June 21, 2005

    Was this written by a person who just loves to talk? It was hard reading.


  • Bob
    June 21, 2005

    Wonderful information. Stuff you always suspected as true, but had to follow “the line” anyway. Well written.


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