Management lessons from Sherlock Holmes

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Sherlock Holmes though a fictional character has been inspiration to many. He was created by Arthur Conan Doyle and based on a medical professor called Dr Bell. Dr Bell it seems used to ask his students to observe their patients carefully and use these observations to suggest the treatment regime.

Having read Sherlock Holmes all my life I do believe that he has some valuable lessons that most CEOs can learn. I would like to call the three important lessons as Observation, Deduction and Knowledge.

Observation- Sherlock Holmes was a very keen student of human psychology. He was also a very keen observer and even minute details never used to escape him. For example by the grey dust on a man’s hat he would know that this man was mostly sedentary. His sense of observation sometimes used to solve the case even before all facts have been presented to him.

Holmes also spent many hours in the field. For example in ‘The hound of Baskervilles’ he spends many days in the moors living in a small hut so that he could fist hand observe the coming and going of the so called ‘hound from hell’. As a master of disguises Holmes mostly travelled alone on these pursuits and often incognito.

For most CEOs observation is a matter of survival. But unfortunately most never spend time in the field to understand the market. Once they have the high office, CEOs have the habit of surrounding themselves with experts, consultants and analysts. This is not only detrimental but also robs the leaders from having a firsthand experience in the market place. A good example is when healthcare leaders providing services to hospitals have never been to a hospital to see how their services are impacting the patients. In other cases he had a gang of street children be his eyes and ears.



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Observing the market and the competition is of key importance. This is easier in a B2C scenario but possible in B2B scenarios as well. Also it is important that the CEO also had sources of information outside the company.
A good example of a business leader who spends so much time on the field is Richard Branson, who seems to be very observant both in his company as well as the competition.
Deduction- Deduction is the key to decisions. Thought many logicians feel Inductive reasoning is also a powerful, in this particular case deduction follows from Observations which form the hypothesis or premises.
Holmes was a matter of deduction. His observations were a key ingredient into the hypothesis that resulted in the deductions. For example in the sign of four, his knowledge that the footsteps of the person were closely paced but heavy in the mud led him to the conclusion that a dwarf and not a child was used to enter the house through the chimney. This also helped him indentify that the robbery was carefully planned and not a random act by one of the street gangs.

Steve Jobs is probably the best example of a person using deductive knowledge. Though he called it intuition, it was just a pattern recall that helped him deduce the needs of the consumer. This helped him launch various path breaking products with minimal market research.

CEOs need to constantly use the information they have collected through their observations to create products and services that serves the need of their customers.
Unfortunately even here the lack of observation, leads to very poor deduction. That’s one of the reasons that most companies end up producing me too products and services rather than creating something innovative.

Knowledge- Despite being a detective Holmes had very good knowledge on the use of forensics, chemicals, music and human psychology. He also was an expert bee keeper. Holmes according to the chronicles had many academic papers to his credit.
Knowledge helped him to observe the right things and also helped him deduce the correct logic after removing the confusing signs.

This is one area that needs to be worked upon for most leaders. In my experience very few leaders and CEOs actually make the effort to understand the business they are in. Also very few could talk to experts without preparation from their sub ordinates or analysts within their firm.
In the world of ghost writers and script writers, coached by marketing and PR people, most CEOs never take the effort to build their own knowledge.
One exception to this case was the rock star CEO of Wipro Vivek Paul, who many have told me required no preparation because he was very knowledgeable in the IT services business and out sourcing.
So there is a lot that business can learn from Holmes, but the question is will they?