This gets tossed around as a truism. I'm curious, does anyone have any evidence for it? Call me a skeptic, but these kinds of "everyone knows" truths are often wrong.
Google and other such companies have a vested interest in getting hiring right. They also have the wherewithal to conduct studies, collect data, and let the evidence guide their hiring practices. Google in particular has shown a willingness to completely overhaul their practices by eliminating ineffective practices (remember their reputation for "thought puzzle" type questions?).
So I'm curious if you have anything to back up the idea that they're doing it all wrong.