The Juda Principle: The Most Depressing Theory in Business

Tuesday, February 23, 2016

Many people have come up with interesting theories about businesses. A small number of them had the good sense to name their theories after themselves. Those who did became instant thought leaders and a measure of celebrity status.

As I discussed in my semi-satirical masterpiece The Scumbag's Guide to Content Marketing, becoming associated with a term can be a powerful means of increasing one's public profile.

Here are a few well known laws and principles named after people. As you can see, none is particularly groundbreaking, but each is commonly mentioned in business circles.

At this point in time, it feels as though all of the "easy" laws have been discovered. However, I know that people continue to research new laws, and the longer I wait to discover my own, the more difficult it will become. For this reason I spent hours racking my brain to discover a law that is both important and easy to summarize.

It is with great pride that I introduce my legacy The Juda Principle. It states that people prefer to maximize the appearance of acquired skills and expended effort over the creation of actual value.

Allow me to provide a hypothetical example.

Suppose a person is a trained surgeon. The value that he provides is a measure of the lives he saves (and improves) by his actions.

To become a general surgeon in the United States, a person must complete a bachelor's degree (4 years), a medical degree (4 years) and a surgical residency (5-7 years). That's an awful lot of schooling and advanced training. Few would be willing to invest that kind of time and effort for a future devoted to menial administrative activities.

After all, I keep hearing that there is a shortage of doctors [read my take on such arguments in There is No Shortage of Software Engineers].

The argument appears to make sense. Why would a doctor waste his rare and precious skills on filling out paperwork? Surely he has more important things to do.

According to a research paper from 2011, the use of administrative checklists led to a 50% reduction in surgical mortality and a 33% reduction in surgical complications. Checklists can make a huge difference in patient outcomes.

No matter how skilled and hardworking the surgeon, it's unimaginable that he'd be able to save so many lives and prevent so many complications via surgical procedures. Nevertheless, few surgeons would pursue research into the use of checklists. Checklists are administrative tasks and surgeons should focus on more important matters befitting their years of training.

Whether a conscious decision or not, a surgeon will always prefer to challenge his skills and demonstrate his mastery of his field.

Indeed, it is often politically safer to research complex solutions that have the potential to help relatively few patients than it is to pursue potentially low hanging fruit that could help millions of patients. If unsuccessful, at least the former has the potential to act as a positive signal of intelligence. The latter would likely act as a negative signal of the surgeon's unwillingness or inability to master complex concepts. After all, no one ever received the Nobel Prize for implementing a checklist program. On the contrary, the prize is only intended for exceptional research on complex topics.

The Juda Principle presents a terrifying view of human nature that has wide-ranging implications. If only you could find someone who understood the Juda principle and could assist your firm in limiting its effects (hint, hint).

Would you like to learn how better pricing can improve your business? Contact me for a consultation, or read my book on software pricing.