The Not-So-Fab Five
These companies have recently suffered the consequences of failing to practice evidence-based management
SIEBEL SYSTEMS. The joke used to be that Siebel was the capital of the United States of Amnesia. Executives made a string of sloppy mergers and acquisitions but never seemed to change their approach. "They kept buying stuff and screwing it up," says Pfeffer. The chickens came home to roost this year, when Oracle acquired the company.
SUN MICROSYSTEMS. In what Pfeffer calls a "textbook case of casual benchmarking," Sun has tried to import Jack Welch's management practices from General Electric, to widespread grumbling among employees. "They've created all this tension within the organization," says Sutton. Four years straight without a profit, and Sun is still trying to dig itself out of the dot-bomb collapse.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION. "They don't learn from their mistakes," Pfeffer says of NASA managers. The report of the Columbia Accident Investigation Board, published after the space shuttle Columbia disintegrated on re-entry--17 years after the Challenger exploded on takeoff--made this abundantly clear. The best engineering minds in the world, says Pfeffer, in a system that puts hierarchy and procedure before technical expertise, can still fail catastrophically.
HEWLETT-PACKARD. The Carly Fiorina era, which ended last year, was a model of missed opportunities to manage using empirical data. "She was the ultimate get-on-the-plane CEO," says Sutton. One example: Fiorina ignored internal studies that said HP culture wouldn't support pay-for-performance plans and pushed the changes through. Her popularity sagged, HP took a nose dive, and Fiorina resigned.
FORD MOTOR CO. The company committed the cardinal sin in the 1990s of focusing on what was big and new--in particular, on a vague Internet strategy--not on what works. "The two things Ford is no longer known for are quality and design," Pfeffer says. Some estimates put the cost of righting these wrongs at over $1 billion.
This story appears in the March 27, 2006 print edition of U.S. News & World Report.