Golden hammer

From CEOpedia | Management online

Golden hammer is a principle also known as the law of the instrument or Maslow's hammer. It refers to the dependence on a specific tool to perform various function. In the investments golden hammer means to depend on the particular analysis tool or viewpoint to make the decisions. When a company relies on one analytics to make strategic decisions, it is also considered to be a golden hammer (R. W. Brislin 1980).

American psychologist, Abraham Maslow described golden hammer as follows :

"I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail." (A. Maslow 1966).


"Birmingham screwdriver" is an English expression for a hammer and it refers to the habit of using one tool for different purposes. This term predates both Kaplan and Maslow (J. Green 1998).

In the periodical from 1968 called "Once a Week", we can find the statement:

"Give a boy a hammer and chisel; show him how to use them; at once he begins to hack the doorposts, to take off the corners of shutter and window frames, until you teach him a better use for them, and how to keep his activity within bounds."

American philosopher, Abraham Kaplan was the first to record the statement of the golden hammer concept: "I call it the law of the instrument, and it may be formulated as follows: Give a small boy a hammer, and he will find that everything he encounters needs pounding." (A. Kaplan 1964, p. 28).

The golden hammer became popularized by Abraham Maslow who in the Psychology of Science wrote: "I remember seeing an elaborate and complicated automatic washing machine for automobiles that did a beautiful job of washing them. But it could do only that, and everything else that got into its clutches was treated as if it were an automobile to be washed. I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail." (A. H. Maslow 1966, p.15).

Historian Robert Kagan suggested that there is an analogy to the law: "When you don't have a hammer, you don't want anything to look like a nail." Kagan used those words to explain the difference in views on the use of military force that United States and Europe have held since the end of World War II (R. Kagan 2004).

Golden hammer in computer programming

In the information technology, the concept of golden hammer was applied as anti-pattern - a programming practice to be avoided. The notion was that a familiar technology or concept is applied obsessively to many software problems. José M. Gilgado, software developer observed that in his field, developers often use well knows tools to do a completely new project with new constraints. By staying in the comfort zone, the risk is avoided. Using the same tools may mean we do not have enough arguments to make the decision as there is nothing to compare to and this limits the knowledge. To solve this problem, we should keep looking for best possible choices, even if we are not familiar with them. It relates also to a computer language with which one is unfamiliar. Gilardo observed that the product RubyMotion allows developers to "wrap" unknown computer languages into one familiar language and therefore we avoid learning them. However, this approach was criticized by Gilardo because it reinforces the habit of avoiding new tools (J. Gilardo 2014).

Examples of Golden hammer

  • A company that relies on a single financial metric or ratio to make decisions is using the golden hammer. This can be seen when a company focuses on short-term cash flows, stock prices, or profits to make decisions and ignores other important factors.
  • A company that relies on a single sales channel or customer segment to generate the majority of their revenue is using the golden hammer principle. This can lead to a lack of diversification, which can make the company vulnerable to changes in the market.
  • A company that relies on a single technology to run its operations is using the golden hammer. This can be seen when a company uses outdated technology, which can lead to inefficiencies and missed opportunities.
  • A company that relies on a single supplier for its raw materials is using the golden hammer. This can lead to a lack of competition and higher prices, which can hurt the company's bottom line.

Advantages of Golden hammer

The golden hammer principle can be beneficial in many ways, as it enables an organization to focus on a specific analytical tool or viewpoint and make decisions based on it. Here are some of the advantages of using the golden hammer principle:

  • It allows an organization to make consistent decisions based on a specific tool or viewpoint. This helps ensure that all decisions are made in the same way, providing a sense of continuity and security.
  • It helps to simplify the decision-making process, as the organization does not need to consider multiple tools or viewpoints. This makes the process more efficient, as it requires less time and energy.
  • It can be used to ensure that all decisions are made in the same way, ensuring that the organization's goals are achieved. This helps to ensure that decisions are made in the most effective way, and that the organization's resources are used in the most efficient way.

Limitations of Golden hammer

The main limitation of the golden hammer principle is that it can lead to over-reliance on one particular tool or viewpoint when making decisions, rather than considering and comparing a range of options. This can result in a limited field of vision, a lack of creativity, and suboptimal decisions. Other limitations of the golden hammer include:

  • Narrow Focus: The golden hammer principle can lead to a narrow focus, meaning that decisions are made without considering alternative solutions. This can lead to missed opportunities or unanticipated risks.
  • Unwillingness to Adapt: When a company relies too heavily on a single tool, they may be unwilling to try new approaches or adapt to changing conditions. This can lead to missed opportunities and poor decision making.
  • Unproductive Habits: When relying on a single tool, a company may develop unproductive habits and routines. This can limit a company’s ability to respond to changing market conditions or customer needs.
  • Loss of Innovation: Over-reliance on a single tool can lead to a loss of creativity and innovation. This can result in a lack of new ideas and products, and can lead to a decline in competitiveness.

Other approaches related to Golden hammer

Other approaches related to the golden hammer principle include:

  • The law of parsimony, also known as Occam's Razor, which states that the simplest solution to a problem is usually the best.
  • The law of intensity, which states that the most intense approach to a problem should be taken.
  • The law of diminishing returns, which states that the benefit of a given action decreases as the number of times it is taken increases.
  • The law of unintended consequences, which states that any action can have unforeseen and unintended results.

In summary, the golden hammer principle is related to other approaches such as the law of parsimony, intensity, diminishing returns, and unintended consequences. All of these approaches emphasize the need to take a simple and focused approach to problem-solving in order to generate the best results.

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Author: Katarzyna Mamak